China’s—and arguably the world’s—largest alcohol retail chain, 1919 Group, has announced plans to close approximately 1,500 stores, citing a misalignment in business philosophy with some of its franchise partners. At the same time, the company is pivoting its business model, upgrading its single-purpose alcohol shops into experience-driven venues combining food and beverage offerings.
At the recent conference, hosted by 1919, the company’s founder and chairman Yang Lingjiang bluntly declared, “The era of profiting from the price gap on famous liquor brands is over,” and said the company would “cut ties decisively” with franchisees who do not align with its vision.
Yang revealed that the company expects to shutter around 1,500 stores by the end of the year, attributing the decision to major differences in business philosophy, operating mindset, and values among some franchisees.
He noted that certain partners had even circumvented contractual terms by sourcing products through unauthorized channels in pursuit of higher margins. Under the company’s revamped business model, a closed-loop procurement system will be enforced, strictly prohibiting cross-channel sourcing. Violations, he said, would result in immediate termination of cooperation.
Previously, 1919 publicly accused some of its agents of engaging in fraudulent transactions and arbitrage, with losses exceeding RMB 100 million (approx. USD 13.7 million). The company stated that it has reported the matter to local police.
Founded in 2006 and headquartered in Chengdu, Sichuan, 1919 Group is a vertically integrated alcohol retailer with a nationwide footprint of over 5,000 stores, including both company-owned and franchised locations. Its product portfolio spans baijiu, wine, beer, and tobacco, making it the world’s largest alcohol-focused new retail chain by number of outlets.
1919 was once listed on China’s National Equities Exchange and Quotations (NEEQ), also known as the “New Third Board,” but delisted in 2023. In 2022, the company reported revenues of RMB 4.714 billion, a year-on-year increase of 2.28%. Public data indicates that its gross merchandise volume (GMV) surpassed RMB 10 billion in 2023.
A pioneer in blending e-commerce and alcohol retail, 1919 was among the first in the industry to embrace digital channels. The company operates flagship stores on major platforms such as Tmall and established a “19-minute delivery” network over a decade ago, leveraging its brick-and-mortar footprint. In 2018, it received a RMB 2 billion strategic investment from Alibaba, valuing the company at RMB 7 billion at the time.
The latest round of store closures is part of a broader strategic pivot toward experience-based retail. A key focus is transforming traditional alcohol stores into “drinks and dining lifestyle hubs.”
The latest round of store closures is part of a broader strategic pivot toward experience-based retail. A key focus is transforming traditional alcohol stores into “drinks and dining lifestyle hubs.” In 2024, 1919 launched one such concept store in Chengdu’s Global Center. Located in the mall’s basement, the store invites customers through a retail display area that leads into a bar and restaurant section. The space integrates offerings like “buy wine, get a meal,” “bar pricing at supermarket rates,” and free coffee, blending convenience retail with hospitality.
According to Yang, the “drinks and dining” concept has been in development for five to six years. By early 2025, the company plans to launch more than 50 pilot stores in Chengdu and Shanghai. For franchised outlets, 1919 said it would revive a “joint management” model, implementing stricter oversight to improve franchisee quality and enhance customer experience.
Yang acknowledged that China’s liquor retail landscape has fundamentally shifted. “Most of the people I started out with 15 or 20 years ago are no longer in the business. We must transform,” he said. “You think it’s hard to sell? But easy-to-sell products don’t make money. The ones that do are always harder to move.”He continued, “If you earn 20 yuan per bottle, you only need to sell 10 bottles. But if you earn just 5 yuan per bottle, you have to sell 100. It’s now a game of volume and slim margins.”
