ZJLD (06979.HK) is experiencing a stark contradiction. On one hand, Chairman Wu Xiangdong's video channel has amassed over 600 million views, while the accompanying "Ten-Thousand Merchant Alliance" has signed more than 3,800 partners, generating 580 million yuan in payments. On the other hand, the company issued a dismal profit warning: ZJLD's 2025 revenue fell nearly 50% year-over-year, with net profit collapsing over 60%.
This profit warning casts doubt on Wu Xiangdong's experiment combining personal branding with a vast merchant network. The stark contrast between high traffic and poor performance raises questions about the strategy's effectiveness.
Despite appearing successful superficially—Wu's videos gained 600 million views, with 12 clips exceeding 10 million views each—the results are disappointing. The traffic was intended to support "Da Zhen," a strategic product launched in June 2025 priced at 600 yuan but claiming quality rivaling 3,600-yuan offerings. Wu aimed to make it "the next Feitian Moutai," allocating most of the second-half budget to its promotion.
Simultaneously, ZJLD introduced the "Ten-Thousand Merchant Alliance," using equity incentives to bind partners and create a manufacturer-distributor community. By early February 2026, Wu announced that Da Zhen had signed 3,816 partners across 31 provinces and 280 cities, with 580 million yuan in payments over 200 days.
However, ZJLD's 2025 revenue plummeted to 3.55–3.7 billion yuan, nearly halving from 7.07 billion yuan in 2024. Adjusted net profit fell to 520–580 million yuan, down 65.5–69%. Second-half revenue was 1.05–1.20 billion yuan, with adjusted net profit turning to a loss of 30–90 million yuan. In contrast, second-half 2024 revenue was 2.9 billion yuan without Da Zhen. Clearly, the new product failed to rescue declining sales.
Prior to Da Zhen's launch, ZJLD's core brands—Zhenjiu, Lidu, Xiangjiao, and Kaikouxiao—all saw declining sales. Zhenjiu, contributing 59.7% of revenue, fell 44.8% in first-half 2025, with average selling price dropping from 389,800 yuan/ton to 323,400 yuan/ton. Lidu's revenue declined 9.4%, but its average price plunged 29% to 348,000 yuan/ton. Xiangjiao and Kaikouxiao dropped 38.7% and 63.9%, respectively.
Weaker market demand and active inventory reduction—such as halting orders for Zhen Fifteen and Lidu products—contributed to the slump. Da Zhen, priced at 888 yuan retail (600 yuan market price), aimed to fill the gap between Zhen Fifteen (400 yuan) and Zhen Thirty (800 yuan). While its payment data seemed solid, it couldn't offset the broader decline.
ZJLD attributed the 2025 slump to reduced demand—especially business banquets, social gifting—and continued inventory cuts. Into 2026, channel adjustments persist, with Lidu suspending supplies for several product lines. Essentially, ZJLD has focused for over a year on clearing inventory to restructure its product portfolio.
Criticism of Wu's personal brand and the alliance model has grown. Questions arise about traffic authenticity, conversion to real demand, and Da Zhen's sell-through rates. The 600–800 yuan price segment faces intense pressure, as per a China Alcoholic Drinks Association report, with premium brands like Moutai and budget options gaining ground, while mid-tier products struggle. Competitors like Moutai 1935 and Junpin Xijiu have also dropped to around 600 yuan, squeezing Da Zhen further.
The alliance model shows磨合 challenges: Wu disclosed 123 penalties and 150 partnership terminations in 200 days. Rules prohibiting online sales, price dumping, and wholesale transfers to peers are often violated, as Da Zhen is readily available on e-commerce platforms.
Despite this, some analysts view the alliance as a proactive shift from channel-push to consumer-pull strategies, though the equity-heavy model carries risks in a downturn. Success hinges on 2026 industry recovery, price control, and distributor stability. Wu continues producing videos and hosting livestreams, with the latest on March 12. Whether his "personal brand + alliance" approach can alleviate ZJLD's pressures may only become clear in the next financial report.
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