Chinese consumers prioritise entertainment and relaxation in retail choices: report

The nation’s retail sector witnessed a robust recovery in tourism, film attendance, and the performing arts in 2023.

Chinese consumers are now focusing on escapism, entertainment, and relaxation in their personal lives amidst the increasingly complex economic conditions, Savills' 2024 China Retail Trend report revealed.

According to the report, the nation’s retail sector experienced a rebound in 2023, with tourism, film attendance, and the performing arts showing promising signs of recovery.

Box office figures reached 86% of pre-pandemic levels, indicating a strong willingness amongst consumers to engage in entertainment activities.

Moreover, there is a clear trend towards dedicating more retail space to leisure activities, with major cities like Shanghai and Wuhan allocating around 16% of shopping mall space for entertainment zones. 

The retail landscape also saw the emergence of new brands and concepts within traditional retail categories, particularly in sectors such as sports and child-related spaces. Family entertainment zones, theatres, art instruction, and specialised sports have become driving forces in leasing demand.

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Retail sales experienced significant rebounds across various consumer categories in 2023, with sectors like F&B and apparel demonstrating robust growth exceeding 15%. 

Niche product categories such as fishing and skiing products, perfumes, and instant cameras saw import values more than double compared to 2019.

The report said that despite economic slowdown fears, Chinese consumers are intensifying product research, leading to fewer but more deliberate purchases focused on value for money and product substance over packaging. 

“Consumers are actively seeking value for money, combining considerations of quality, taste, and utility,” it stated. The essence of a brand and the substance of its products have become more crucial to consumers than the packaging and marketing of the product.”

Additionally, there's a rise in founder-led brands, leveraging social media and unique experiences to build consumer loyalty.

A surge of entrepreneurship in the retail sector, fueled by domestic startups, is also filling market gaps and highlighting the potential of local brands. 

Whilst prime malls retain allure, retailers are diversifying into non-traditional locations for stimulation. This includes projects in non-core areas catering to convenience, as well as a growing interest in city center backstreets and side roads amongst retailers.

Moreover, sustainability is gaining traction, with luxury brands leading efforts to reduce energy consumption and obtain LEED certification for retail spaces.