Summary of Key Points
As one of the largest liquor wholesale distribution centers in the country, Bairong Market has faced a dilemma this year where both sales volume and profits have declined: overall sales have dropped by 20%-30% (with some merchants experiencing a decline of nearly 50%), and the gross profit per box of widely circulated liquor has plummeted to 5-10 yuan (with some even selling at 2-3 yuan). The gross profit margin for high-end brands is less than 1%. A large number of merchants have left the market, and even vacant stores with no transfer fees are difficult to sell. Those remaining merchants either switch to acting as intermediaries for cross-regional deliveries or are forced to adapt by engaging in short-video live streaming, private domain marketing, selling other types of liquor, or directly connecting with consumers through their own supply chains. The traditional wholesale model of waiting for orders at their stalls and relying on low prices to increase sales volume is no longer effective. The competitive landscape at Bairong has shifted from competing on the lowest prices to focusing on acquiring customers, selecting the right products, and ensuring reliable delivery.
How Difficult Has It Been This Year for Bairong? — Sales Volume and Profits at an All-Time Low, with No Buyers for Vacant Stores
The desolation of Bairong Market this year is evident to all: there are few customers in the mall after 3 p.m., merchants sit around drinking tea and playing cards, warehouses are no longer bustling with packing and shipping activities, and logistics vehicles are now empty rather than waiting outside the market.
- Reduced Sales: Overall sales have decreased by 20%-30%, with some merchants experiencing a nearly 50% drop. Since there are no customers at the retail stores and no replenishments, it’s difficult for wholesalers to sell their goods.
- Lower Profits: The gross profit per box of widely circulated liquor is only 5-10 yuan (meaning the profit from selling one box is less than that from selling a single bottle of beverage), and the gross profit margin for high-end brands is less than 1%. Merchants in urgent need of cash are selling their goods at 2-3 yuan, potentially earning only 800,000 yuan from a 1-million-yuan inventory.
- Merchants Leaving the Market: Some stores with no transfer fees are still unsold; some merchants have changed careers, while others have retired due to age.
Why Has Business Suddenly Collapsed? — Lack of Sales at Retail Levels, Disappearance of Price Margins, and Competition from Other Regions
Bairong’s traditional profit model, which relied on purchasing goods at low prices and selling them in bulk for a profit margin, has completely failed this year:
1. Retail Stores Being Unresponsive: Offline retail stores have almost no ability to acquire new customers, so they do not replenish their inventory, leaving wholesalers with unsold goods.
2. Disappearance of Price Margins: The profit margins in the wholesale sector have been compressed to the minimum; previously, selling more could still generate a profit, but now even that is not possible.
3. Competition from Other Regions: Previously, Bairong was a benchmark for low prices, but now some regions offer liquor for cheaper prices (for example, what sells for 340 yuan in Bairong may be available for 330 yuan elsewhere), weakening its price advantage.
Merchants’ First Steps in Self-Saving: Online Marketing and Private Domain Customer Retention as a Lifeline
Unable to continue relying on traditional methods, more and more merchants are turning to online strategies:
- Short-Video/Live Streaming: A group of young managers at Bairong have started creating videos showcasing product prices and tasting knowledge, or using live streaming to attract new customers. For instance, Jin Songhao has a 500,000-following audience on social media and 300,000 private domain customers, with 80% of his orders coming from this channel.
- Proven Private Domain Marketing: They maintain customer relationships through WeChat communities and mini-programs, using professionalism and word-of-mouth to retain customers. Currently, there are two to three hundred merchants in Bairong engaging in short-video marketing, with dozens doing so successfully; some even organize training sessions for 200 merchants.
Second Steps in Self-Saving: Changing Product Types and Moving Towards Direct Supply Chains
In addition to online efforts, merchants are also adjusting their business strategies:
- Switching to More Popular Products: Liquor types like light-flavored and clear-bottle varieties are selling better, so many merchants have shifted from selling soy sauce-flavored liquor to these more marketable options.
- Direct Connection with Consumers: Some merchants are breaking away from their role as intermediaries by becoming supply chain brands. For example, Wang Yuan uses short videos and local platforms to receive orders directly from consumers, having the products delivered by partnering retail stores, thus bypassing the traditional wholesale process. “Since both liquor companies and platforms are competing for direct sales, ignoring this channel means certain failure.”
Bairong’s Future: Moving From Competing on Low Prices to Competing on Comprehensive Abilities
Bairong remains an important hub for liquor distribution, but the rules of the game have changed. In the past, being able to obtain cheap goods was enough to make a profit; now, it’s about who can acquire customers effectively (through online marketing), select the right products (light-flavored/clear-bottle varieties), and provide reliable delivery services. The traditional model of wholesalers waiting for orders is becoming obsolete, and the new landscape emphasizes online customer acquisition, private domain management, and supply chain capabilities.
Bairong’s transformation reflects the broader adjustment in the liquor wholesale industry: when low prices are no longer the sole competitive factor, merchants must shift from simply selling goods to focusing on managing customer relationships if they want to survive.