Over the past five years, China's liquor industry, particularly the baijiu sector, has confronted significant structural challenges during its post-boom adjustment phase. The core issues can be summarized as follows:

A pronounced over-dependence on premiumization and price hikes created a disconnect between product pricing and actual market demand. Many producers aggressively pushed products into ultra-premium price segments, resulting in inventory gluts and severe price inversions that eroded distributor confidence when consumer spending softened.

Concurrently, the industry displayed sluggish responsiveness to macro-environmental shifts. Anticipated declines in official and high-end business entertainment, partly due to policy changes, were underestimated. This miscalculation, combined with capacity expansions planned during earlier boom years, led to growing overcapacity pressures as demand contracted.

Efforts to attract younger consumers and expand globally remained largely superficial. While packaging and flavor variants were introduced, they often failed to address fundamental cultural and experiential barriers for younger demographics or international mainstream markets. Similarly, innovation lagged behind fast-evolving consumer trends, with traditional brands losing ground to imported spirits, craft beers, and ready-to-drink alternatives.

Furthermore, early attempts at digital transformation were often misguided, focusing on direct-to-consumer sales that alienated established distribution networks rather than leveraging data to enhance channel efficiency and consumer engagement.

Currently, the industry is undergoing a necessary correction. Strategic pivots towards stabilizing prices, reducing inventory, strengthening mid-market offerings, and pursuing more authentic consumer engagement signal a move towards a more balanced and sustainable development model for the future.