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VATS: Channel Expansion or Channel Contraction？
Vats is the only listed liquor distribution company on China’s A-shares market. During the COVID-19 pandemic, Vats undertook a channel expansion strategy, expanding its channels and recruiting top talent. However, as China began relaxing restrictions in 2023, the economy did not rebound as quickly as expected. This post-pandemic era brought market contraction and economic downturn, compelling businesses to streamline operations. Now, Vats faces a decision: In the current new economic environment, should it continue its channel expansion strategy and hire more employees, or should it switch to a channel contraction strategy and redeploy its workforce?