Luzhou Laojiao Co.,Ltd. (Stock Code: 000568) recently released its Q3 2025 financial report. The company reported revenue of 23.127 billion yuan for the first three quarters, with net profit attributable to shareholders reaching 10.762 billion yuan. In Q3 alone, revenue stood at 6.674 billion yuan, with net profit at 3.099 billion yuan.

By the end of Q3, contract liabilities totaled 3.84 billion yuan, up 310 million yuan quarter-over-quarter, while gross margin remained high at 87.2%. Against the backdrop of industry-wide pressure, Luzhou Laojiao's stable performance reflects its successful channel transformation and digitalization strategy implementation in recent years.

Financial data shows not only steady revenue and profits but also growing channel confidence, as evidenced by rising contract liabilities. Amid industry adjustments, the company proactively optimized channel structures and refined market operations through initiatives like the "100-City Plan," "Terminal Infrastructure Upgrade," and "Digital Intelligence Engine," shifting focus from scale expansion to quality improvement.

01 Market Strategy: From Broad Coverage to Precision Targeting National policies promoting county-level economic development align with shifting consumption patterns. Reports indicate that third- and fourth-tier cities now drive retail sales growth, outpacing first- and second-tier cities. Official data shows 7.8% YoY growth in retail sales for lower-tier cities, surpassing the 5.9% in top-tier markets.

The "100-City Plan" is central to Luzhou Laojiao's strategy to overcome regional growth barriers. Targeting underpenetrated markets, the plan establishes a multi-layered network from core cities to county-level markets, focusing on long-term consumer cultivation rather than short-term sales.

Meanwhile, the "East China Strategy 2.0" underscores the company's push into premium markets. By optimizing regional product mixes and deepening partnerships, Luzhou Laojiao aims to combine high-end products with localized penetration for breakthroughs in this key region.

The "Terminal Infrastructure Upgrade" initiative shifts focus from channel coverage to consumer accessibility. Building dense retail networks—including supermarkets, specialty stores, and community group-buying platforms—ensures products reach consumers in daily scenarios.

While these strategic investments take time to fully reflect in financials, they enhance market balance and channel resilience. The 23.127 billion yuan revenue and 310 million yuan rise in contract liabilities demonstrate ongoing structural improvements.

Analysts note that Luzhou Laojiao's deep channel network acts as a stabilizer amid premium market fluctuations: "Steady revenue stems from optimized market structures. The company prioritizes systemic capability-building over short-term spikes."

02 Digital Transformation: Consumer-Centric, Omnichannel Approach As China's liquor industry undergoes structural changes, digital capabilities have become critical. Luzhou Laojiao's channel revamp centers on smart marketing to boost efficiency and direct consumer engagement, as hinted in its Q3 report.

Dual strategies—self-built e-commerce platforms and third-party collaborations—form the backbone of its omnichannel approach. The proprietary platform integrates branding, sales, and membership management, serving as a hub for private traffic and user data to increase repurchase rates. Partnerships with JD Daojia and Meituan Flash further enhance regional penetration through real-time retail integrations.

Smart marketing reshapes operations via tools like the "Five-Code System" (box, package, bottle, outer cap, and inner cap codes), enabling full supply-chain traceability since 2023. This system combats counterfeiting while providing valuable sales data. Additionally, dealer portals and marketing platforms offer end-to-end digital support, from order management to sales analytics.

Financial metrics reflect Luzhou Laojiao's shift from scale to quality. Administrative costs fell 11.05% YoY amid revenue pressure, showcasing efficiency gains. R&D spending hit 127 million yuan, with capital expenditures surging 67.55%, primarily funding smart brewing upgrades.

The company also expands "special channels" through cross-industry partnerships, accessing diverse consumption scenarios and building brand awareness among niche audiences.

By blending offline and online strategies, Luzhou Laojiao is crafting an omnichannel network to sustain growth in a saturated market.

03 Smart Channel Management: Building Responsive Networks With industry competition pivoting from advertising and pricing wars to channel refinement and user operations, future success hinges on channel depth and resilience. Competitors like Yanghe, Wuliangye, and Shanxi Fenjiu adopt varied approaches—from hyper-localized distribution to digital management systems.

Luzhou Laojiao differentiates by constructing an "intelligent terminal network." Real-time monitoring across tens of thousands of outlets tracks sales, inventory, and pricing. Smart replenishment systems optimize stock, while anomaly detection safeguards market order.

Digital tools not only improve rep efficiency but also foster direct consumer connections via the Five-Code System, transitioning channel focus from logistics to relationship management.

Analysts highlight how smart systems reduce operational costs, proving digital prowess as a key value driver. By embedding technology into workflows, companies gain efficiency and user-based competitive edges.

Luzhou Laojiao’s emerging omnichannel framework emphasizes consumption-driven metrics (e.g., scan-to-open bottle data) over channel stocking, addressing chronic issues like inventory dumping and price wars.

As AI and big data mature, intelligent networks will increasingly dictate market prospects. Luzhou Laojiao’s sustained tech investments position it for future advantages.

2025 marks the finale of Luzhou Laojiao’s 14th Five-Year Plan and the groundwork for the 15th. Guided by "steady growth through refinement and innovation," the company aims to solidify channels, refine products, and advance digital capabilities.

Analysts project further improvements in channel health, market penetration, and user operations as key projects deepen. This systemic capacity-building—eschewing short-term gains for long-term strength—exemplifies industry leadership and strategic discipline.