From Tonic to Mild Buzz, Dong-E Ejiao Eyes Low-Alcohol Market

Beyond its main business of donkey-hide gelatin, establishing a low-alcohol liquor track has become a clear strategic direction for Dong-E E Jiao.

According to media reports, the company will officially launch its first low-alcohol product, Ejiao Liquor, during the 2026 Chengdu Spring Sugar Fair. This is not only a new attempt to explore the integration of traditional Chinese medicine and Baijiu but also an important move to implement its dual development strategy of “medicines + health consumer products.”

In the context of shrinking traditional Baijiu market size, the low-alcohol liquor track is rapidly emerging, with market size approaching 100 billion yuan, opening up a new development space for the alcohol consumption sector. Traditional liquor companies and outside capital are entering the market, making low-alcohol liquor the mainstream trend in the Baijiu industry.

Dong-E E Jiao’s move to cross over into Ejiao liquor has raised concerns among investors. The company will face two core challenges: channel reconstruction and multi-category competition. How to solve these issues has become a focus of market attention.

Raising a glass to enter

As early as around 2021, investors asked Dong-E E Jiao on interactive platforms whether it planned to launch Ejiao liquor. At that time, the company clearly stated it would not venture into brewing or selling alcohol.

Back then, Dong-E E Jiao (000423.SZ) had just turned profitable in 2020, and its overall operations had not fully recovered. Internally, it was pushing forward with product and organizational “slimming” adjustments, with no plans for cross-industry ventures.

As time passed, the company finally prioritized diversification, and expanding into the alcohol sector beyond its core Ejiao business has become an important strategic move.

According to media reports, during the 2026 Chengdu Spring Sugar Fair, Dong-E E Jiao will officially launch Ejiao Liquor, characterized by low alcohol content, light nourishing effects, and easy drinkability, targeting female consumers and other demographics, marking its entry into the low-alcohol liquor track.

In fact, Dong-E E Jiao’s entry into low-alcohol liquor is not without prior groundwork. It has already made multiple steps in the nourishing liquor field. In September 2024, the company established Dong-E E Jiao Rou Cong Rong Health Technology (Alashan) Co., Ltd., with core businesses including food sales and health food sales.

In November 2025, it also acquired an 80% stake in Inner Mongolia Alashan Cong Rong Group Co., Ltd., which holds multiple core patents related to Rou Cong Rong and has a drug operation license.

After the acquisition, Dong-E E Jiao leveraged its subsidiary’s industrial and technological advantages to launch Seven-Flavor Cong Rong Liquor, a nourishing medicinal wine product, which was listed on major e-commerce platforms and in pharmacies across several provinces this March. Notably, this product is an OTC drug, fundamentally different from popular health wines like Jinjiu.

However, Dong-E E Jiao is not content with just entering the medicinal wine track. The Ejiao Liquor launched at the Spring Sugar Fair does not directly target Jinjiu but is positioned as a light nourishing liquor with 8-12% alcohol content, differentiating itself from fruit wines, sparkling wines, rice wines, and other low-alcohol categories, avoiding direct competition with health wines.

Thus, Dong-E E Jiao has established a dual-track layout: OTC nourishing medicinal wines targeting medical channels, and Ejiao Liquor aimed at attracting young consumers, attempting to create a second growth curve for the company.

Why invest in low-alcohol liquor?

Previously, Dong-E E Jiao sold nourishing medicinal wines mainly through OTC channels, which had a limited and homogeneous consumer base. Entering the low-alcohol liquor field allows it to reach a broader audience and is also a significant attempt by this historic brand to explore the integration of traditional Chinese medicine and Baijiu.

Industry-wise, after the contraction of the Baijiu market, low-alcoholization and mild intoxication have become mainstream trends in alcohol consumption. Consumers’ demand for mild intoxication and self-enjoyment continues to rise, further boosting the growth of the low-alcohol liquor market.

According to the China Alcohol Industry Association, the market size of low-alcohol liquor is expected to reach 74 billion yuan by 2025, with a compound annual growth rate of 25%, potentially surpassing 100 billion yuan within 2 to 3 years.

The core consumer group for this hundred-billion-yuan market is Generation Z, especially those aged 18 to 35, who seek mild intoxication experiences and health-conscious consumption.

Currently, the competition landscape in the low-alcohol segment is taking shape. Leading brands like Jinjiu dominate the health wine sector, while products like Coconut Island and Zhuyeqing are further segmenting the market. In the ≤20% alcohol content category, the product variety is richer, including fruit wines, pre-mixed cocktails, sparkling wines, low-alcohol rice wines, and yellow wines.

Dong-E E Jiao’s Ejiao Liquor, leveraging the combination of Ejiao and Baijiu, targets consumers and scenarios seeking mild intoxication and light nourishment, aiming to build differentiated competitive barriers in this homogeneous low-alcohol market.

This also forms an important part of Dong-E E Jiao’s long-term strategic vision. During an investor relations event in 2025, the company stated it would strengthen resource integration by leveraging the industrial advantages of Inner Mongolia Alashan Rou Cong Rong Group, especially through products like Zhuangben and Yuanyuan Qi series, to systematically develop a second growth curve.

As a well-known symbol of nourishing products, Ejiao’s brand recognition provides a foundation for Ejiao Liquor. From this perspective, the launch of Ejiao Liquor is more of a strategic market exploration by Dong-E E Jiao. More importantly, under the “medicines + health consumer products” dual strategy, Dong-E E Jiao urgently needs to develop this second growth curve through health consumer products to alleviate growth pressure caused by slowing main business.

In 2025, Dong-E E Jiao’s financial results showed revenue of 6.7 billion yuan and net profit attributable to shareholders of 1.739 billion yuan, with year-on-year increases of 8.83% and 11.66%, respectively, but the growth rate slowed significantly compared to the previous year. The core Ejiao and related products achieved revenue of 6.198 billion yuan, a record high in recent years, but their growth rate was only 11.80%, down 15.24 percentage points from the previous year.

Market competition

The huge potential of the low-alcohol liquor market has attracted many players, including traditional liquor companies, cross-industry enterprises, and snack food companies, intensifying competition.

Traditional liquor companies, with their strong Baijiu brewing techniques, have launched several low-alcohol products early on. For example, Kweichow Moutai’s blueberry sparkling wine sold over 10,000 bottles on its first day, demonstrating the strength of leading brands in low-alcohol and youth-oriented product layouts; Wuliangye launched 29-degree Yijian Qingxin, Luzhou Laojiao introduced 38-degree Guojiao 1573, and the brand Plum Jiu under Bijiutian also became a billion-yuan hit.

In addition, Bai Run Co., Ltd. has deepened its presence in the cocktail segment, Yuanqi Forest has expanded into sparkling wines, Kuaijie Mountain’s sparkling yellow wine is popular both online and offline, and even leisure snack brand Three Squirrels has crossed over into fruit wines and beers. Amidst the stagnation of high-end Baijiu growth, these companies are entering the low-alcohol track, aiming to boost revenue by capturing young consumers.

The current low-alcohol track features diverse scenarios, products, expanding categories, and personalized consumer demands. While market enthusiasm remains high, this is not necessarily favorable for Dong-E E Jiao’s Ejiao Liquor, which has just entered.

On one hand, Dong-E E Jiao’s traditional sales channels are mainly offline pharmacies and hospitals, which do not align well with the low-alcohol liquor business. This means the company must rebuild its channel network, covering convenience stores, restaurants, online platforms, and other channels more accessible to young consumers, while also facing challenges in dealer expansion and promotional team building.

On the other hand, although Ejiao Liquor’s product design and positioning attempt to differentiate from brands like Jinjiu and Plum Jiu, it still faces direct competition from established leading brands. Jinjiu, Plum Jiu, and RIO have long dominated the market, with Jinjiu leveraging strong offline channels and brand power to become a leader in health wines. Public data shows that in 2025, Jinpai’s revenue is expected to reach 13.7 billion yuan, with core brand Jinjiu’s revenue growing 20% year-on-year, securing its position as a top player in the health wine sector.

For the newly launched Ejiao Liquor, it faces not only strong market competitors but also the need to compete across multiple dimensions such as marketing and flavor. Additionally, the younger demographic’s awareness and acceptance of “Ejiao + liquor” products still require time to cultivate. For Dong-E E Jiao, breaking through in the low-alcohol liquor track with Ejiao Liquor will not be an easy task.