China Alcohol Retailer Says 60% of Sales Now Come Online

How much growth can a traditional bricks-and-mortar alcohol retailer unlock after going digital? For one major player in China’s northeast, the answer is striking: 60% of sales now come from online channels.

That figure was disclosed by a senior executive of Xiaojiuwo at a recent industry forum, offering a rare look into how an established offline retailer has reshaped its business in the age of e-commerce and instant delivery.

According to Li Hua, co-founder of Xiaojiuwo and head of its Shandong operations, the company’s in-house information system is now capable of supporting multiple store formats, including flagship outlets, street-front shops and front warehouses. Overall, more than 60% of Xiaojiuwo’s orders originate online and are fulfilled by delivery riders.

Within online channels, the company focuses primarily on Douyin and major instant retail platforms. Annual sales on Douyin alone have reached about RMB 200 million (US$28 million), while cumulative orders on instant retail platforms have surpassed 3 million, Li said.

Founded in 2014, Xiaojiuwo is one of the leading alcohol retail chains in northeast China and among the region’s earlier adopters of integrated online-offline operations. The company originated in Heilongjiang province and has since expanded nationwide. It now operates more than 500 chain stores, mainly across northeast and north China, and has a membership base exceeding 7 million users.

Under its current expansion plan, Xiaojiuwo aims to grow its store network to 1,500 outlets over the next five years, anchored by a promise of “29-minute home delivery.” Previously disclosed data show that the company’s gross merchandise value (GMV) rose 120% year on year in 2023.

In terms of product mix, Xiaojiuwo carries baijiu, beer and wine. The company says its procurement system covers around 100 overseas wineries, 200 domestic wineries and 30 European breweries, with a total portfolio of more than 4,000 SKUs sourced from over 20 countries. A review of its WeChat mini-program by Vino Joy News shows products from international wine groups and brands including Domaines Barons de Rothschild (Lafite), Treasury Wine Estates, Yellow Tail, Concha y Toro and Montes.

As previously reported by Vino Joy News, intensifying price wars across e-commerce and instant retail platforms have severely compressed margins for some merchants. To mitigate this risk, Xiaojiuwo has continued to emphasise the long-term development of private customers and group-buying channels, despite its strong performance on Douyin and instant retail platforms.

Li said roughly 30% of the company’s sales currently come from in-store retail, about 30% from private-domain customer orders, and the remaining 40% from group purchasing. “This sales structure helps create a more stable and sustainable growth path, while better matching different consumption scenarios,” she said.

In customer acquisition, Xiaojiuwo follows up with customers from public online platforms and gradually converts them into private-domain clients, creating a feedback loop between online channels and physical stores. At the same time, the company continues to build relationships with alumni associations, entrepreneur groups and other social organisations to develop a stable base of group-purchase customers.

From a profitability perspective, about 50% of Xiaojiuwo’s profits come from its own proprietary products. Li said the company focuses on developing “parallel alternatives” to best-selling branded spirits — products that offer comparable quality at better value — and uses targeted marketing to highlight their cost-performance advantages and lift overall margins.

Looking ahead, Li expects smaller players without scale advantages to find it increasingly difficult to survive. “The market will not ultimately leave room for ‘small but beautiful’ businesses,” she said. “It will only leave those that are big and strong.” In her view, for alcohol producers, only brands with clear consumer recognition can sustain sales momentum and maintain long-term pricing power.