Analysis of the Development and Prospects of the Baijiu Industry

Abstract

Baijiu is one of the important representatives of Chinese liquor culture. It plays an irreplaceable role in banquets and is often used as a gift in Chinese society. Baijiu production and the number of baijiu companies in the past ten years show that the market is saturated and shrinking. On the other hand, comparing the revenue and profits between listed baijiu companies and the entire industry, it can be found that the baijiu industry has obvious monopoly characteristics and structural prosperity. These two phenomena can be divided into political and economic reasons. Politically, the Chinese government promulgated restrictions on government spending and family planning policies, which directly reduced the consumption group of baijiu, leading to the shrinkage of the baijiu industry. Economically, China's rapid development has increased people's disposable income, and people began to care more about their health and pursue high-end baijiu, leading to a monopoly. To broaden the market, the baijiu industry can consider e-commerce channels and international expansion.