The nation's soft drinks market shrank because of the sluggish demand in the first half of the year, industry analyst said.

Sales in the beverage industry continued to slow down, rising only 2 percent year-on-year in the first half of 2016, according to Nielsen data.

"The economic downturn led to the growth rate decline of the entire retail industry, including soft drinks," said Yan Qiang, a consumer goods analyst at Hejun Consulting Co.