In just two years, platforms like Meituan and Ele.me have turned 20-minute alcohol delivery from novelty to mainstream. Today, as much as 70% of China’s liquor retail chains have joined the race. But behind the rapid adoption lies a heated debate: is on-demand retail a saviour for struggling shops, or a price war that threatens to hollow out the industry?
The debate came into sharp focus on August 8 at a forum on the future of on-demand retail, held during the China Alcoholic Drinks Expo in Jinan, Shandong.
60–70% of Liquor Chains Already On Board
Fan Xiaoyan, chairwoman of Wuzhi Alcohol Chain Consulting, told the forum that 60–70% of the nearly 200 liquor retail chain brands nationwide have already stepped into on-demand retail.
One prominent case is Yishun Liquor (YS), a Gansu-based chain. General manager Zhang Shiwang said on-demand retail has lifted the company’s overall sales by 50.9%. To support the growth, Yishun created a dedicated department and placed e-commerce managers in every store to oversee digital operations. Backed by Yishun Group—a major distributor of leading baijiu brands including Moutai and Wuliangye—the chain now runs 46 stores across the northwestern province.
Fan argued that on-demand retail is more than a passing fad. “The shift is driven by changes in consumer habits, behaviours, and structures,” she said. “It is unavoidable.”
The model, popularised over the past two years by platforms like Meituan and Ele.me, promises delivery within 20 minutes of an order being placed. The order ranges from daily grocery, takeout food, to pharmacy items, and any alcoholic beverages including beer, baijiu and wine.
According to Meituan’s White Paper on On-Demand Alcohol Retail, penetration for instant retail in the alcoholic beverage market was just 1% in 2023, but the market was already worth nearly RMB 20 billion (US$2.8 billion). By 2027, penetration is forecast to reach 6%, with the market size expected to surpass RMB 100 billion (US$14 billion). For many chains, tapping into this channel appears to be a natural extension of their existing operations.
Friend or Foe?
Not everyone is convinced.
“On-demand retail only works if delivery capacity is strong. Otherwise, it might raise visibility but won’t guarantee profits,” said Shan Dandan, chairwoman of Shanghai-based Jiuyue Youpin. Her company, which runs more than 400 outlets nationwide and sells brands such as Moutai, Wuliangye, Penfolds, and DBR Lafite, tested the channel briefly. But she admitted the gross margins were too thin to cover store expenses—sometimes not even staff wages.
Others see the risks as more structural. “The platforms rely on one weapon: low prices,” said Fan Chengjiu, general manager of Heilongjiang-based Xiaojiuwo Wine & Spirits, which claims to operate over 500 directly managed stores. He warned that subsidies and discounting intensify price distortions, creating “destructive” consequences for the traditional liquor trade.
Hidden Barriers, Thin Profits
Industry insiders agree that the model comes with steep, often invisible barriers. Some argue that the very idea of brick-and-mortar liquor shops thriving on on-demand platforms is a “false proposition.”
“Physical liquor stores in China profit from price opacity. On-demand platforms drive traffic through price wars. These are fundamentally different logics,” said Zhou Yuan, China general manager for Georgian wine brand Ranina, which sells through platforms such as Meituan, Ele.me, and Freshippo. “The platforms are highly concentrated. It’s easy to open a shop, but it’s extremely difficult to make real money.”
Niu Hao, chairman of Shanxi-based San Juan Star Fire Wines International Trade, was even blunter. “On-demand is a pseudo-opportunity for street liquor shops,” he said. “The fastest-growing merchants on Meituan keep costs rock-bottom—RMB 1,000 warehouses, second-hand equipment, no renovations. Neighbourhood shops with high rents simply can’t compete.”
Niu’s company, once a wholesale player, pivoted to on-demand retail in recent years. He has noticed that its core customer base skews younger, with post-1995 consumers dominating and women making up more than half in some cities. By contrast, traditional liquor shops mainly cater to men in their 30s and 40s. “The operating logic is completely different,” he said. “To master this game, you first have to abandon the old one.”
What Sells Online
When it comes to products, standardised items—big brands with transparent pricing—fare best. On platforms like Meituan’s Waima Liquor and Alibaba’s Freshippo, the top sellers are still Penfolds, DBR Lafite, Cloudy Bay, Knock Knock, and private-label products sourced directly by the platforms.
Niu believes the strongest performers fall into three price bands—RMB 29.9, 49.9, and 99—covering global mainstream brands and platform-owned labels. “What matters most is brand endorsement,” he said.
Where Does the Real Damage Lie?
Industry voices remain divided on whether on-demand retail is truly eroding traditional shops.
Zhou argued that poor sales in traditional stores cannot be pinned on the platforms. “In the past, liquor retail in China profited from information asymmetry,” he said. “But as the market becomes more transparent and consumers more mature, those margins are shrinking regardless of on-demand.”
Niu, however, sees the trend as an all-out price war. While relationship-driven sales will survive—“people still prefer to see the bottles in person before buying fine wines or wedding banquets”—he warned that broader consumption scenarios are disappearing. “The weak economy and collapse in business banquets have gutted traditional group-purchase channels,” he said.
For now, one thing is clear: on-demand retail has become an unstoppable force. For traditional liquor shops, it represents both opportunity and threat. Striking the right balance between traffic, pricing, and customer structure may decide whether they can secure a place in China’s new retail era.
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