China’s Gen Z drives shift to emotional, sustainable spending

This is driving growth for brands like Pop Mart and Lululemon.

Generation Z is reshaping China’s consumer market, prioritising personal well-being, emotional fulfillment, and sustainability over traditional material consumption.

Unlike previous generations, Gen Z emphasizes personal wellness and experiences over material accumulation.

From premium skincare products to spa memberships and limited-edition collectibles, this demographic treats spending as an investment in happiness and mental health. Local and international brands are rapidly adapting to meet these evolving demands.

Despite being just 15% of China’s population, their economic impact is significant.

A report from People’s Daily found that 64% of Chinese consumers, led by Gen Z, prioritise emotional fulfillment when making purchasing decisions. This has fueled demand for items such as character plushies, themed souvenirs, and blind-box toys, which provide joy without promoting excessive consumption.

Health and sustainability are central to Gen Z’s spending habits. Lululemon, for example, reported 21% same-store sales growth in China, according to Business Insider, reflecting the generation’s dual interest in fitness and social connection.

At the same time, environmental consciousness is reshaping purchasing decisions: Daxue Consulting reports that 40% of Chinese consumers prioritise eco-friendly products, whilst 90% of Gen Z actively seek recyclable options.

Transparency and authenticity also drive Gen Z’s consumer choices. Platforms such as Douyin and Taobao play a key role in guiding purchases, emphasizing reliable information and high-quality, personalized products over mass-produced goods. This has prompted companies to adopt more accountable and transparent business practices.

The result is the emergence of a so-called “emotional economy,” where consumer preferences influence production and investment strategies to align with ethical and societal goals.

Fund managers are increasingly shifting focus toward youth-driven, socially responsible products and services, creating a market that balances personal well-being with broader social and environmental considerations.