China’s best-known baijiu maker, Kweichow Moutai, recently attracted a high-profile vote of confidence when veteran investor Duan Yongping reportedly added Rmb100m to his holding. That kind of move reverberates through domestic markets: Moutai is both a cultural icon and a bellwether for China’s luxury and celebratory consumption. Yet some market commentators — including the author of a critical note that sparked this discussion — argue that the buy is less a signal to follow than a reminder of the narrowing margin for error for long-duration, high-valuation consumer bets.
At the heart of the scepticism are hard numbers. National statistics show that China’s baijiu industry has entered a seventh consecutive year of contraction, with 2025 output down about 12.1% to roughly 3.55 million kilolitres from its earlier peaks. Industry-wide volumes are a fraction of a 2016 high, and while leading brands such as Moutai have maintained or slightly increased output (between roughly 50,000 and 57,000 tonnes from 2020–24), their profit growth is decelerating sharply: Moutai’s net profit rose 19.2% in 2023, 15.4% in 2024 and just 6.3% in the first nine months of 2025.
Those trends matter because they point to a shift from a rising-tide market that lifted many boats to a zero-sum contest for a shrinking pool of premium consumption. Surveys and market reports show younger Chinese cohorts — the post-90s and post-95s — allocate a much smaller share of their alcohol spend to traditional baijiu than older cohorts, favouring beer, fruit wines and experiential consumption. At the same time, wealthy households are rebalancing spending toward travel, health and services rather than gifting, collectibles or conspicuous consumption.
Demography compounds the demand-side problem. China has recorded several consecutive years of population decline and a lower birth rate, a structural headwind that reduces long-term domestic demand growth and, some argue, curtails the creation of new wealth that fuels high-end gift and luxury markets. Critics point to Japan’s ‘lost decades’ as a cautionary analogue where many everyday goods outperformed high-end discretionary goods amid stagnation.
Valuation and investor behaviour add a final complicating layer. Moutai trades at stretched multiples and its share price has been volatile: commentators note that buying for dividend yield is a poor hedge if capital loss precedes years of dividend receipts. Scarcity-driven tactics — limited releases and online lottery systems to buy rare bottles — can sustain short-term pricing power and social cachet, but they are promotional levers rather than durable demand drivers.
All of this frames the central dilemma for international investors watching Moutai closely. A respected investor making a sizeable bet is not the same thing as a broad-based signal that the underlying market dynamics have turned favourable. Long-term success in such a stock now depends on a much longer time horizon and on the company’s ability to offset demographic and generational shifts with new products, channels or markets.