As China prepares its 15th Five-Year Plan (2026–2030), global attention is once again turning to the world’s second-largest economy — and to a consumer market that continues to confound conventional analysis. While some international observers have long speculated about a so-called “consumption downgrade” in China, new data and market trends tell a different story: rather than retreating, China’s consumers are evolving, shifting from material abundance to smart, experience-driven consumption.

Beyond the “Consumption Downgrade” Narrative

For years, reports of Chinese consumers “tightening their belts” amid economic headwinds have made headlines. The story was simple — as the economy slowed, consumers traded luxury brands for cheaper alternatives. Yet, this reductionist view ignores the nuance and resilience of China’s consumption ecosystem.

In reality, what is unfolding is not a contraction but a reorientation of values. Chinese consumers are no longer defined by how much they spend, but how intelligently and purposefully they spend. The rise of “rational luxury” and “smart consumption” reflects a profound shift in mindset — one driven by information, quality consciousness, and emotional value.

Smart, Not Thrifty: The New Face of Chinese Consumption

2025 has seen the explosive rise of what analysts call “new consumption equities.” Trendy toy brand Pop Mart, heritage jeweler Laopu Gold, and budget tea chain Mixue Bingcheng have become household names — each catering to a distinct yet converging consumer logic: buy with both sense and sensibility.

Pop Mart sparked a global craze with its collectible “Labubu” figurines, transforming toys into lifestyle assets.
Laopu Gold, with products priced between 10,000 and 60,000 yuan (USD 1,400–8,400), has become a symbol of modern Chinese heritage luxury — its revenues surged 167.5% in 2024 and another 251% in early 2025.
Mixue Bingcheng, known for its $1 teas, now boasts over 46,000 stores worldwide, becoming the world’s largest made-to-order beverage chain.

These success stories reveal a maturing market rather than a frugal one. Chinese consumers are no longer seduced by flashy branding alone. They are strategic buyers, balancing cost-efficiency with emotional satisfaction. As a popular saying among young Chinese goes: “Buy expensive, but don’t overpay.”

Armed with social media reviews and digital price trackers, consumers meticulously compare value, quality, and sustainability. Even when they splurge — on gold jewelry, eco-products, or premium experiences — they seek cultural authenticity and long-term worth.

A recent McKinsey & Company report captures this evolution:

“Chinese consumers are rationalizing their spending, prioritizing quality-of-life upgrades and emotional connection over status-driven consumption.”

Green, Smart, and China-Chic: Quality Over Quantity

During the National Day and Mid-Autumn Festival holiday in October 2025, spending on green, smart, and “China-chic” products surged — signaling the nation’s confidence in its domestic brands. Official data showed:

Organic food sales up 27.9% year-on-year
Smart home appliances up 14.3%
China-style fashion up 14.1%

Overall, China’s retail sales grew 4.6% in the first eight months of 2025, reinforcing the stability of domestic demand despite global uncertainty.
Analysts at Huatai Securities argue that China’s consumption sector is now characterized by “high-quality, diversified expansion,” driven by technological innovation and supportive fiscal policy.

The essence of this transformation, they note, is a philosophical one — a shift from scale to substance, from mass production to personalization, emotion, and sustainability.

From Goods to Experiences: A New Consumption Mindset

China’s consumer evolution is not only about what people buy — it’s about how they choose to live. Increasingly, the focus has moved away from acquiring physical goods toward collecting meaningful experiences.

Concert tickets for megastars like Jay Chou and Eason Chan sell out within seconds, as fans are willing to pay premium prices for emotional, once-in-a-lifetime memories. Domestic tourism is booming — during the October holiday, 888 million trips were recorded, a year-on-year increase of 123 million, with total tourism revenue exceeding 809 billion yuan.

Data from the travel platform Fliggy showed that bookings for local experiences — theater shows, folk culture tours, and outdoor adventures — jumped 78% year-on-year.

According to Huatai Securities:

“Service consumption is no longer a supplement to goods consumption. It is emerging as the primary engine of China’s consumption growth.”

Indeed, between 2020 and 2024, household service spending grew by 9.6% annually, outpacing goods consumption. The trend accelerated in 2025, with service retail sales up 5.1% in just the first eight months.

Driving this growth are sports, entertainment, and cultural activities. Amateur tournaments like the Su Super Leaguein Jiangsu Province have revived local tourism and hospitality. Meanwhile, professional events such as the WTT China Grand Smash and Shanghai Masters sold out in hours — each surpassing 80 million yuan in ticket sales, setting new national records.

A Fertile Ground for Global Brands

This new wave of consumer energy has not gone unnoticed by international firms. McKinsey’s report highlights China’s “outdoor economy” as a key growth opportunity for global brands, emphasizing that “foreign enterprises that align with China’s evolving consumption values can thrive in this environment.”

In response, Chinese authorities have unveiled a new policy package to sustain service consumption. It includes measures to:

Develop service consumption platforms,
Expand high-quality supply in culture, tourism, and sports,
Stimulate new consumer demand, and
Strengthen financial and fiscal support mechanisms.

Vice Minister of Commerce Sheng Qiuping noted that the government will broaden market access in key sectors such as telecommunications, healthcare, and education — signaling that service consumption will become the main driver of economic growth in the coming decade.

Conclusion: Evolution, Not Decline

Contrary to the narrative of slowdown, China’s consumption story is one of strategic transformation. The country is not retreating from prosperity; it is redefining it.

Chinese consumers are smarter, more selective, and more emotionally aware than ever before. They buy less for status and more for satisfaction, less for luxury and more for meaning. Their evolving preferences are rewriting the rules of global retail and reshaping how foreign investors approach the world’s most dynamic consumer market.

In short, China’s economy is not weakening — it is maturing. The nation’s pivot from materialism to experience, from imitation to innovation, and from quantity to quality, marks a new era of sustainable, intelligent growth that may well define global consumption trends for the next decade.

https://english.news.cn/20251018/3cd0dc3912ef495595cf777cbfde484e/c.html