Why Does Chinese Liquor Market Stage a Comeback?

Chinese white liquor, which is also known as Baijiu has become a must-have product to celebrate Chinese New Year. Price of high-end brands has even hiked ahead of this holiday season. Kweichow Maotai, the most famous Baijiu brand in China has an 18 percent price rise on average, with its flagship product Flying Fairy's recommended retail price increasing from 1,299 RMB ($206) to 1,499 RMB ($237). In stores, these prices have even reached 2,000 RMB ($316).

The increasing demand, which has developed despite higher prices and fewer promotions, is mainly because of the consumption upgrade in China. While the Baijiu consumption from government gradually reduced from 2012 due to the anti-corruption policy, the purchases by household consumers keep growing since then.

(Source:  DataYes   RoboR   Research Platform ,Dongxing Securities, Tangjiukuaixun)

(Source: DataYes RoboR Research Platform,Dongxing Securities, Tangjiukuaixun)

It is believed that the continuous consumption upgrade will fuel the Baijiu market, which is driven by high-end Baijiu products over 1,000 RMB ($158.3). In the meanwhile, the whole luxury Baijiu market is projected to reach 1 trillion RMB ($158.3 billion) this year.