Here are emerging trends in China’s consumer sector

The government is actively boosting domestic consumption.

China's consumer sector is undergoing rapid transformation, fuelled by government policies, changing consumption habits, green preferences, and new technologies, according to a report by Herbert Smith Freehills.

"As the Chinese economy experiences a slowdown for the first time in decades, the market focus has shifted to new growth areas and strategies that can sustain in the current economic climate," the report said.

Despite an economic slowdown, the market continues to attract investment, with emerging growth areas and strategies offering potential for growth.

The Chinese government is actively boosting domestic consumption. Key policies include the July 2023 “Notice on Measures for Restoring and Expanding Consumption” and the July 2024 “Opinions on Promoting High-Quality Development of Service Consumption.” Local governments are also offering consumption vouchers to stimulate spending in sectors like dining and travel.

The report also revealed that consumers are increasingly favouring green products such as organic goods and energy-efficient appliances. The government’s “Action Plan for Promoting Large-scale Equipment Renewal” aims to encourage eco-friendly product replacements, supported by subsidies for greener products.

Additionally, online consumption is growing rapidly, driven by live-streaming sales and the use of social media platforms. Consumers are increasingly using short videos and live-streaming rooms to discover products, reshaping the retail landscape.

Chinese consumers are also showing a stronger preference for local products, particularly those reflecting traditional Chinese culture. This shift reflects national pride and a desire to support homegrown brands.

Moreover, consumers are becoming more practical, focusing on product quality, price-performance ratios, and necessity. There is also a growing trend toward personalised, emotionally satisfying purchases.

The report also noted that Chinese consumers, especially younger ones, are embracing smart devices and connected products.

Generative AI (GenAI) is also gaining traction in China, particularly amongst younger users. Chinese tech giants have launched domestic AI models, which are widely used for tasks ranging from personal shopping to social interaction. In the corporate world, GenAI is streamlining operations, improving decision-making, and optimising marketing strategies.

Brand collaborations across sectors are becoming more common, with partnerships such as luxury products combined with tea or video games with coffee. These collaborations generate consumer excitement and meet diverse needs, boosting brand appeal and engagement.