"Time-honored Chinese Medicine Brands" Are Also Competing for the Low-ABV Liquor "Cake"! Beverage and snack giants are frequently expanding into this area—Is cross-border "drinking" driven by anxiety or the next big trend?

The Daily Economic News Reporter: Wen Menghua    Editor: Xiao Ruidong

After snack and tea beverage giants cross into the “alcohol” industry, “Old Chinese Medicine” brand Dong’e E Jiao is also betting on “Health + Alcoholic Beverages,” entering the low-alcohol segment.

Recently, there were reports that Dong’e E Jiao announced its entry into the low-alcohol market. The new product, Ejiao Liquor, will be unveiled at the Chengdu Spring Sugar and Alcohol Fair opening on March 26.

The Daily Economic News·Will Drink Reporter contacted Dong’e E Jiao by phone as an investor. A company staff member stated, “Not sure at the moment, will respond after understanding.” As of the time of writing, no further reply has been received.

In recent years, the alcohol business has become a popular cross-industry move for retail snack giants and tea brands. Mixue Bingcheng, Chabaidao, Haoxiangni, and Three Squirrels are all expanding into this market to seize a larger share. Recently, Mixue Bingcheng also launched a fresh beer business, establishing Sichuan Fresh Beer Fulujia Brewing Co., Ltd.

As Generation Z becomes the core growth group in the alcohol market, trends like “punk health preservation,” “mild intoxication and small drinks,” and “flavor innovation” are shaping consumer preferences. More companies are rushing into the alcohol industry—so is “Health + Drinking” really a good business?

Second Curve Absence

Is the “Old Chinese Medicine” Brand Betting on “Mild Intoxication + Light Nourishment” New Scene?

As an old Chinese medicine brand, Dong’e E Jiao announced its entry into the low-alcohol segment, leveraging its existing health brand advantages to launch the new Ejiao Liquor, attempting to capitalize on the “health + alcohol” low-alcohol market.

The Daily Economic News·Will Drink reporter noted that behind this, Dong’e E Jiao may be targeting the “healthier, lower-alcohol” growth brought by the alcohol market.

Currently, the low-alcohol market is growing rapidly, becoming a new growth point for major liquor companies. The markets for fruit wine and pre-mixed drinks are expanding significantly; meanwhile, “medicinal and food homology” has become a new trend, with traditional Chinese medicine taverns and health-oriented alcoholic beverages gaining popularity among young people.

As a company listed on the A-share market for 30 years, Dong’e E Jiao’s financial report for the first three quarters of 2025 shows revenue of approximately 4.766 billion yuan and net profit attributable to shareholders of about 1.274 billion yuan. Over the past three years, both revenue and net profit have increased year-over-year, but the company heavily relies on its main Ejiao business, with a lack of a second growth curve.

Image Source: Dong’e E Jiao 2024 Annual Report Screenshot

Lin Yue, Chief Consultant at Lingyan Management Consulting, told the Daily Economic News·Will Drink that as a traditional Chinese medicine brand, Dong’e E Jiao recognizes its long-term strategic bottlenecks. Its move into the low-alcohol segment is a “brand rejuvenation” effort, a self-breakthrough, with low-alcohol being a touchpoint to engage the new generation of consumers.

“Dong’e E Jiao’s entry into low-alcohol is not targeting traditional drinking occasions but rather the emerging scene of ‘mild intoxication + light nourishment,’” said Cai Xuefei, a senior alcohol industry analyst, to the Daily Economic News·Will Drink. He explained that this move aligns with the rapid growth of the low-alcohol market, especially as young women become the main consumers, and attempts to differentiate itself in a highly homogeneous low-alcohol market using the “medicinal and food homology” concept.

However, Cai Xuefei also admitted that the traditional nourishing symbol “Ejiao” is quite different from the relaxed drinking culture of “mild intoxication” and “self-pleasure.” This cross-industry move by Dong’e E Jiao appears more like a strategic market exploration with relatively light investment, aiming to carve out a functional and health-oriented niche in the trillion-yuan incremental market.

In fact, the crossover into alcohol isn’t limited to Dong’e E Jiao. Previously, China National Pharmaceutical Group also entered the craft beer segment, launching Wuxing Taitai Beer under its China National Pharmaceutical Herb Brewing, emphasizing “healthy drinking” as its core selling point, trying to secure a position in the craft beer market.

Lin Yue believes that the concept of “Health + Alcohol” is effective in the short term because “trying new things” is a key feature of the younger generation consumers. But in the long run, whether consumers will repurchase, whether the products are truly effective, and whether the taste can appeal to young people all depend on genuine “product strength.” Relying solely on concepts and gimmicks won’t sustain success.

Gathering to Compete in the Alcohol Business

Is Cross-Industry “Drinking” Anxiety or Opportunity?

As Generation Z becomes the core growth group in the alcohol market, trends like “punk health preservation,” “mild intoxication and small drinks,” and “flavor innovation” have made the alcohol industry a hot cross-industry move for retail snack giants and tea brands.

In recent years, Mixue Bingcheng, Chabaidao, Haoxiangni, and Three Squirrels have all expanded into this space to seize a larger market share. In 2025, “Snow King” selling beer has also sparked market discussion, with significant investment in acquiring a 53% stake in Fulujia (Zhengzhou) Enterprise Management Co., Ltd. (hereinafter Fulujia Fresh Beer).

Recently, Mixue Bingcheng’s fresh beer business made another move, establishing a brewing company in Sichuan. Tianyancha shows that on March 9, Sichuan Fulujia Fresh Beer Brewing Co., Ltd. was established with a registered capital of 50 million yuan, wholly owned by Fulujia Fresh Beer.

Image Source: Tianyancha Screenshot

As tea, snack, and health companies flock into the alcohol business, is cross-industry “drinking” really a good business? Many industry insiders and analysts believe that these seemingly “cross-industry” moves are actually collective anxiety and rational choices by brands seeking growth in a saturated market.

Cai Xuefei said that currently, the demand for “self-pleasure mild intoxication” and “light health preservation” among young people has driven the low-alcohol blue ocean market, which is growing at over 25% annually and nearing a trillion yuan in scale. Meanwhile, whether it’s snacks, milk tea, or health products, all face slowing growth and internal competition, needing a high-margin, high-topic second growth curve to support valuation and expansion.

“With the rapid development of the alcohol industry, a large influx of capital and companies will intensify homogeneous competition. The winners will be those who can establish core barriers and create products with deep recognition, or those who are good at understanding users and deeply integrating products with scenarios like tourism, socializing, and entertainment,” Lin Yue pointed out.

Cai Xuefei also analyzed for the Daily Economic News·Will Drink that in the next 1-3 years, the cross-industry “drinking” track will show three major trends: First, from “category explosion” to “brand deep cultivation,” as the market experiences rapid growth in low-alcohol scale, competition will intensify, and only brands that can ensure flavor stability and build emotional connections will survive; second, “health” and “functional” labels will shift from differentiation to standard features, with more niche products around “light health” and “emotional value” emerging; third, channels and scenarios will deeply integrate, with community groups, instant retail, and “day tea and night wine” formats becoming key entry points to reach young consumers.