China’s consumer spending is showing clear signs of revival in the first half of 2025. After several years of pandemic disruptions and economic uncertainties, shoppers are gradually regaining confidence and opening their wallets again. From big-city malls to rural e-commerce deliveries, the rebound spans across demographics and regions – albeit unevenly. In this report, we examine China consumer trends 2025, analyzing how consumer spend has rebounded in Q1–Q2 2025, which sectors are leading the recovery, and how both domestic and international brands are adapting in the post-COVID marketplace.
Post-COVID Rebound and Economic Tailwinds
China’s economy overall is benefitting from a post-COVID consumption uptick. In the first quarter of 2025, GDP grew 5.4% year-on-year – a faster pace than the 5.0% full-year growth in 2024. Crucially, consumer spending has been a major driver of this uptick. Retail sales of consumer goods rose 4.6% year-on-year in Q1 2025 to ¥12.47 trillion. This marked an acceleration from late 2024 and was nearly on par with the growth rate in early 2024. By March 2025, retail sales growth had accelerated to 5.9% year-on-year, up from 4.0% in the combined January–February period, indicating momentum as the quarter ended. Government policy support – including stimulus measures and incentives – has played a role in this rebound. Beijing has explicitly made boosting consumption a top priority for 2025, even allocating RMB 300 billion (≈$41 billion) in special treasury bonds to fund programs like consumer goods trade-in subsidies.
The early Q2 2025 data signals continued strengthening. In April, retail sales climbed 5.1% year-on-year, and in May the pace unexpectedly picked up to 6.4% – the fastest growth since late 2023. Rising consumer spend in Q2 suggests that China is on track to meet its growth targets, even as other areas of the economy (like industrial output) face headwinds . Notably, inflation has remained very low (with a slight 0.1% CPI drop in Q1), meaning these nominal retail growth rates largely reflect real increases in volume. Consumer confidence, however, remains a mixed picture. Official surveys show confidence levels still below pre-pandemic highs – the index stood around 88 (on a 0–200 scale) in early 2025, well under the neutral 100 and significantly lower than the ~120 level common before COVID. This lingering caution is evident in high household savings: Chinese bank deposits swelled during the pandemic and remain elevated as some consumers hold back on big purchases. The overall theme is “cautious recovery” – spending is rising, but consumers haven’t completely shed the caution of the past two years.
Urban and Rural Consumers: Middle Class Demand and Regional Shifts
One notable trend in 2025 is the broad-based nature of the consumer rebound across both affluent cities and less-developed areas. Urban China still accounts for the lion’s share of consumption, but growth in spending has been slightly faster in rural areas so far this year. In Q1 2025, retail sales in urban areas rose 4.5% year-on-year, while rural retail sales grew 4.9%. Likewise, the per-capita consumption expenditure of rural residents grew 5.6% (nominal) in Q1, outpacing the 4.7% rise for urban residents. This suggests that smaller towns and the countryside are seeing a post-COVID catch-up in consumption. Government initiatives to boost rural incomes and improve e-commerce logistics outside of big cities are helping bridge the urban-rural gap. Smartphone penetration and online shopping campaigns have brought quality goods to consumers in lower-tier cities and villages, unleashing new demand from China’s hundreds of millions-strong middle class beyond the major metros.
The Chinese middle class, in fact, remains the engine of consumption growth. This cohort has swelled in size over the past decade and is increasingly concentrated in China’s interior provinces and smaller cities. Middle-class households are driving demand for upgraded products and services – from better home appliances to healthy food, travel, and entertainment. The rebound in spending has reflected some of this pent-up demand. For example, sales of sports and recreational goods jumped 25.4% in Q1, hinting that consumers are renewing their focus on lifestyle and leisure after years of restrictions. Services consumption is also on the mend: catering (restaurant) revenues rose 4.7% in Q1 as people dine out more freely, and domestic tourism has picked up markedly in 2025. The continued expansion of the middle class – and their rising expectations – will be pivotal in sustaining China’s consumption growth. These consumers are increasingly savvy and quality-conscious, seeking value but also willing to spend on premium brands, health-related products, and experiences that improve their quality of life.
Sector Snapshots: Luxury, Electronics, and FMCG Rebounds
The overall consumption rebound in early 2025 is playing out differently across sectors. High-end luxury goods have seen a more hesitant recovery, whereas mass consumer goods and certain durables are rebounding strongly. Luxury deserves special attention, given its importance to both global brands and Chinese affluent consumers. China’s domestic luxury market in 2024 went through a sharp downturn – contracting by an estimated 18–20% in 2024 compared to the prior year. Factors like low consumer confidence, a property market slump, and the return of overseas travel curtailed domestic luxury spend. Many wealthy Chinese resumed shopping abroad once travel restrictions lifted; in fact, overseas luxury purchases by Chinese accounted for roughly 40% of their total luxury spending in 2024 as tourism restarted. This surge in shopping trips to Tokyo, Seoul, Paris and beyond, combined with cautious sentiment at home, meant that luxury brands’ China stores saw significantly lower footfall. Coming into 2025, industry experts predicted a flat year for China’s luxury market – with a continued dip in the first half of 2025 and a hopeful stabilization in the latter half. Indeed, reports in Q1 2025 showed luxury sales rebounding, but at a slower pace than hoped. Shoppers are returning to boutiques, yet many remain price-sensitive. Luxury houses have responded by tempering price increases and focusing on in-store experiences and exclusivity to lure back consumers. Certain categories like high-end jewelry and watches are still lagging (as consumers hold off on big-ticket bling amid economic uncertainties), whereas luxury fashion and cosmetics have seen better momentum thanks to new collections and heavy marketing. The luxury rebound is real but cautious – a barometer of how China’s wealthy feel about the economy. Global luxury brands operating in China are thus treading carefully, balancing store expansions with an emphasis on localization and customer engagement to rebuild loyalty.
In contrast, consumer electronics and home appliances are enjoying a noticeable surge in early 2025. A government-backed “trade-in” program for consumer goods has supercharged sales of new tech gadgets. Many Chinese consumers delayed upgrading smartphones and appliances during the pandemic; now, with subsidies available for trading in old models, they are splurging on upgrades. In Q1, sales of communication equipment (like smartphones) jumped 26.9% year-on-year, and home appliance sales rose around 19%. This is a striking rebound for electronics retailers and brands. Companies launching 5G phones, smart home devices, and the latest TVs are finding receptive buyers, especially as the Chinese New Year in late Q1 spurred a wave of electronics gifting and replacement purchases . The appetite for technology is tied to consumers’ rising optimism and the digital lifestyle that took hold during COVID – habits like online entertainment, smart home upgrades, and remote work tools are driving demand for the latest devices. The automotive sector, particularly new energy vehicles (NEVs), also saw robust growth in Q1 (NEV production was up over 45%), reflecting consumers’ interest in big-ticket tech-infused products when incentives are in place. These big durables are a bright spot, indicating that when value is evident – be it through a subsidy or innovation – Chinese consumers will spend.
The fast-moving consumer goods (FMCG) segment – everyday items like food, beverages, personal care products – is recovering more gradually, but there are positive signs. After a challenging 2022–2023, FMCG spending returned to growth in Q1 2025, up about 2.7% year-on-year . Essentials and health-oriented products are leading the charge. For instance, categories such as nutritional drinks, hygiene products, and wellness supplements have been growing steadily as people prioritize health. In 2024, Bain & Company noted a “two-speed” phenomenon: health and hygiene categories boomed while some discretionary categories stagnated. That pattern is continuing into 2025 – products perceived as improving well-being (vitamins, functional beverages, organic foods) are in high demand. Meanwhile, some indulgences like premium skincare and cosmetics are also picking up as consumer confidence improves slightly. The mass market is still price-sensitive; value-for-money is a key theme. We see this in the rise of membership-based retail stores and discount chains. Warehouse club stores and discount supermarkets expanded their customer base in lower-tier cities last year, and their popularity remains strong in 2025 as consumers hunt for deals even while spending more overall. Household consumption patterns have shifted in subtle ways post-pandemic: a bit more frugal in daily spending, but willing to spend on quality in categories that matter (health, family, education, etc.). In summary, everyday consumption is on a modest upswing, providing a stable foundation to China’s consumer rebound.
Digital Retail and Cross-Border E-Commerce Trends
No discussion of Chinese consumer trends in 2025 is complete without examining the digital retail landscape. China’s retail revolution has been largely digital-driven, and this continues unabated. Online sales now account for roughly a quarter of all retail sales, reflecting the country’s world-leading e-commerce ecosystem. In Q1 2025, online retail sales of physical goods grew 5.7% year-on-year, slightly outpacing overall retail growth. Chinese consumers have deeply integrated digital shopping into their lives – from browsing on mobile super-apps to watching live-stream sales events. A striking trend is the rise of social commerce: platforms like Douyin (China’s TikTok) and Kuaishou have rapidly grown into major shopping channels. In 2024, Douyin’s e-commerce arm surged to become the second-largest online retail platform in China (behind only Alibaba’s Taobao/Tmall), seizing market share with its popular live-stream shopping content. This trend has carried into 2025, with brands and influencers leveraging live video to pitch products ranging from cosmetics to appliances in real-time. Live commerce is on track for nearly $843 billion in sales by 2025, making up an estimated fifth of China’s retail market – an almost unheard-of scale globally. This digital retail dominance means that any consumer brand in China must have a savvy online strategy, whether that’s flagship stores on Tmall, mini-program shops on WeChat, or partnerships with live-stream hosts to reach younger audiences.
Another important facet of digital consumption is cross-border e-commerce in China, which connects Chinese consumers with imported brands and products. Even as international travel has reopened (allowing some to shop abroad), many consumers continue to buy foreign products through online channels from home. Platforms like Tmall Global, JD Worldwide, Kaola, and an array of niche cross-border apps enable convenient access to overseas goods – from luxury handbags to vitamins – often with competitive pricing and authenticity guarantees. The Chinese government has expanded cross-border e-commerce pilot zones and streamlined customs policies, making it easier for consumers to import small batches of goods duty-minimized. The result is a thriving cross-border market: in 2024, China’s cross-border e-commerce trade (imports and exports combined) hit a record ¥2.71 trillion. While much of that is export, imports are a significant component. In the first three quarters of 2024 alone, cross-border e-commerce imports and exports rose 11.5% year-on-year, far outpacing general trade growth. Chinese shoppers’ appetite for imported brands in China – whether it’s European wines, Japanese skincare, or American organic snacks – remains strong. Imported consumer goods sales have rebounded alongside domestic goods in 2025, buoyed by consumers’ desire for high quality and niche products not always available from local brands. This is especially pronounced in categories like mother-and-baby products, health supplements, and beauty, where overseas brands often enjoy a reputation advantage. Importantly, cross-border digital retail is also an entry point for smaller Western brands to test the China market without a full bricks-and-mortar presence. We see many overseas companies using bonded warehouses and e-commerce to reach Chinese consumers directly, reflecting how digitalization lowers barriers to entry in this vast market. The confluence of digital retail and global reach means Chinese consumers today have more choice than ever – and they expect speedy delivery, localized service (even when buying foreign goods), and engaging online shopping experiences as the norm.
International Brands and Localization: Adapting to Chinese Consumers
With Chinese consumer spending on the rebound, international brands are recalibrating their strategies to capture this growth while meeting evolving local expectations. The pandemic years taught foreign brands some hard lessons about resilience and relevance in China. Now, in 2025’s recovery phase, success requires a keen understanding of what Chinese consumers value and how they shop. A key strategy has been localization – not merely translating labels, but truly tailoring offerings to Chinese tastes and cultural trends. For example, Western food and beverage companies have launched China-specific flavors and healthier product lines to align with local wellness trends. Global fashion brands are working with Chinese designers or pop culture icons to create collections that resonate with China’s Gen-Z shoppers. Even in the luxury sector, where brand heritage is a selling point, companies are localizing marketing by embracing Chinese New Year campaigns, zodiac-themed limited editions, and VIP customer events that cater to domestic clientele who can no longer be counted on to shop in Paris or Hong Kong alone.
Digital localization is equally crucial. International brands have learned that China’s digital ecosystem is unique – Google, Facebook, and Twitter give way to Baidu, WeChat, and Weibo, and e-commerce is dominated by domestic giants with their own rules. Thus, many Western brands are investing in local social media and e-commerce teams to manage their presence on platforms like Little Red Book (Xiaohongshu) or Douyin. They are engaging local Key Opinion Leaders (KOLs) and influencers to build authenticity with Chinese audiences. The use of AI-driven tools for customer service (for instance, chatbots on e-commerce sites responding in fluent Chinese) and big-data analysis of consumer trends has also become standard for global companies operating in China. Moreover, consumer expectations in China are often higher when it comes to convenience and innovation – think ultra-fast delivery, seamless mobile payments, or immersive retail tech. Brands like Starbucks and Nike have pioneered concept stores in China that blend online and offline experiences (such as mobile pre-ordering or AR try-ons) to meet these expectations. International brands realize that simply importing a global model won’t suffice; they must innovate within China’s market, which in some cases is ahead of the West in retail trends.
Crucially, the post-COVID consumer mindset in China includes a stronger emphasis on value and trust. Incidents with sub-par or counterfeit goods have made Chinese consumers very discerning about quality, especially for imported products. As a result, foreign brands are doubling down on quality assurance and brand storytelling, highlighting certifications, origins, and genuine guarantees to win trust. We also see more collaboration with local partners – whether distributors, tech platforms, or even local governments – to navigate regulatory changes and regional consumer differences. For instance, imported food and healthcare brands often work with local distribution firms to ensure compliance with China’s strict food safety and e-commerce laws, while also leveraging their local market knowledge to fine-tune marketing. The theme is clear: to thrive in China’s rebounding consumer market, international brands are becoming more Chinese in their approach, even as they bring global products to Chinese shoppers.
Conclusion: Outlook for 2025 and Navigating the New Landscape
The resurgence of Chinese consumer spending in the first half of 2025 paints an optimistic picture for the remainder of the year. Barring any major shocks, consumer sentiment is expected to continue gradually improving, supported by pro-consumption policies and the natural release of pent-up demand. Analysts anticipate that China’s consumer confidence will strengthen if employment and income growth stay on track – though it may take time to climb back to pre-2020 highs. The government’s focus on household consumption (from encouraging service spending to cutting certain purchase taxes) underscores that domestic demand is now seen as the key engine of China’s growth. For businesses, this means the opportunities in China’s consumer market are as enticing as ever, but they come with new complexities. Consumer trends in 2025 are being shaped by lessons from the pandemic: an even more digital-first shopping culture, a preference for quality and health, regional market diversification, and a cautious mindset toward big expenditures. Companies that understand these nuances will be well positioned to ride the rebound.
For Western brands and new entrants, the stakes in China are high. The market’s sheer scale – from the booming Chinese middle class to its digitally connected youth – can drive global growth for those who succeed. Yet, capturing Chinese consumers in 2025 requires strategy, agility, and often, the right local partnerships. This is where firms like Gate Kaizen come into play. Gate is a China-based consulting and distribution partner that has been helping Western brands navigate China’s retail ecosystem and localize effectively. In the current climate, a partner with on-the-ground expertise is invaluable – Gate Kaizen guides brands in distribution channels, ensures brand localization (from language to cultural branding), sets up robust e-commerce operations, and manages the intricacies of cross-border market entry. Western companies leveraging such expertise can more smoothly adapt to Chinese consumer preferences and regulatory requirements, reducing the trial-and-error that often comes with entering this market.
As Chinese consumer spend rebounds in 2025, international brands that invest in understanding and serving the nuances of China’s consumer trends will find fertile ground for growth. The rest of 2025 is likely to see continued growth in sectors like services, travel, and high-tech consumption, alongside a cautious but recovering luxury segment. In short, China’s consumers are back – spending selectively but ambitiously. With the right insights and partners, businesses can tap into this renewed consumption momentum. The rebound of Q1–Q2 2025 might just be the beginning of a new chapter in China’s consumer story, one characterized by resilience, innovation, and a deeper alignment.
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