PRESS RELEASE
24 January 2025

AlixPartners Annual Chinese Consumer Survey Reveals Shifting Spending Priorities For 2025

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AlixPartners

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AlixPartners is a results-driven global consulting firm that specializes in helping businesses successfully address their most complex and critical challenges.
Consumers most likely to spend more on health products, groceries, clothing, and travel/holidays...
China
  • Consumers most likely to spend more on health products, groceries, clothing, and travel/holidays
  • Price sensitivity and product functionality are primary drivers behind brand-switching behavior
  • Continued importance of traditional e-commerce channels calls for tailored strategies and integrated approach

Shanghai (January 22, 2025) - Chinese consumers are adapting to a "new normal" and shifting their spending priorities in 2025, compelling businesses to adopt a precise and adaptable strategy, according to a recent Chinese consumer survey by AlixPartners, the global consulting firm.

The report, based on a survey of over 3,000 respondents across China, reveals strong appetite for quality, wellness and meaningful experiences despite an overall cautious sentiment. Gen Z consumers are redefining aspirations, while affluent seniors and middle-income urbanites are driving demand for essential and discretionary goods. This presents vast growth opportunities for businesses that can adapt their strategy, execution, and engagement with precision amid the evolving consumer landscape.

"China's economy has entered a transformative phase of slower but more sustainable growth. While consumers are generally more cautious with their spending, our survey reveals that perceptions of economic prospects vary significantly by geography, income, and age group – differences that have profound implications for their spending," said Lisa Hu, Partner and Managing Director, Greater China Lead for the Consumer & Retail Practice at AlixPartners. "To thrive in this new era, businesses must go beyond a broad-based approach and demonstrate agility, innovation, and a sophisticated understanding of target customer behavior across categories."

Other key findings of the survey include:

Consumers Prioritize Wellness, Experiences, and Value

Evolving customer profiles are redefining consumer priorities and demonstrating increased spending confidence despite showing signs of a cautious sentiment overall. 41% of consumers intend to spend more on health-related products such as supplements and Chinese medicine, while more than 30% plan to increase their spending on groceries, clothing, and travel as consumers continue to prioritize wellness and practicality.

Travel and holiday spending leads the way in consumer confidence growth from 2024 to 2025, fueled by a shift toward meaningful, experience-driven consumption. Notably, more than 40% of young consumers plan to spend more on travel in 2025. Such focus on self-care and quality of life is also reflected in the moderate confidence growth for spending related to entertainment, dining out, sporting goods, toys, books, and cosmetics.

On the other hand, the luxury sector is seeing renewed confidence among high-income consumers in high-tier cities, with short-term spending growth remaining cautious as shoppers prioritize quality, value, and sustainable options over impulsive high-ticket purchases.

Price and Functionality Drive Brand Loyalty

Brand loyalty has emerged as a critical pillar for business success as shifting purchasing behaviors, increasing price sensitivity, and evolving trust dynamics disrupt long-standing loyalty patterns. Price sensitivity and product functionality are the two biggest drivers behind brand-switching behaviors, followed by recommendations from friends and family, whereas the origin of a product has become less important as a brand-switching driver.

Categories with longer lifespans (e.g. home refurbishment, luxury goods) or higher repurchase rates (e.g., pet-related items, toys) tend to enjoy stronger brand loyalty. However, for saturated categories such as food and beverages and apparel, loyalty tends to be more fleeting – 18% of consumers are likely to switch clothing brands.

"Understanding consumer behavior and preferences is crucial for brands aiming to build and maintain loyalty," said Lisa Hu. "To achieve this, brands must create a unique value proposition through superior quality, exclusive features, and exceptional service, while also building strong emotional connections with customers. Given the significant variation in consumer preferences across different channels, adopting a tailored approach is indispensable for success."

Tailored Strategies & Integrated Approach Key to Retail Success

Despite the emergence of new channels such as social e-commerce and livestreaming in the past few years, traditional e-commerce platforms have maintained their importance for their extensive product range, price and promotions, advanced infrastructure, and consumer trust have made.

According to AlixPartners' survey, online channels remain the dominant purchasing avenue for most categories, especially for interest-related goods (e.g. travel, entertainment, clothing, beauty and cosmetics, toys and books) for which over 60% of purchases are conducted online.

"China continues to set the global benchmark for e-commerce innovation thanks to its expansive ecosystem with an abundance of choices," added Lisa Hu. "However, getting that choice right is pivotal to success. Retailers need to frequently and consistently monitor consumer behavior to navigate this complex landscape effectively."

An integrated approach remains key to customer engagement as shoppers utilize a variety of online and offline channels to research and make purchases. For example, for beauty and cosmetics products, 21% and 14% of consumers most frequently gather information via Tmall/Taobao and Xiaohongshu respectively, while 13% turn to offline stores.

The new normal in China's retail and consumer scene demands ruthless precision. From deploying cutting-edge digital tools to building deeper emotional connection with consumers, the key lies in investing in line with the values of today's Chinese consumer. By aligning strategy, investment and execution with China's uniquely distinct market dynamics, and by continually innovating, businesses can position themselves to reap significant rewards in this vibrant marketplace.

About AlixPartners' Chinese Consumer Survey

The seventh annual report and survey on Chinese consumer by AlixPartners surveyed over 3,000 respondents across China and provides an in-depth analysis of Chinese consumer spending priorities and trends predicted to shape 2025 and beyond, offering businesses actionable insights to adapt and thrive in an evolving marketplace.

For more survey findings, please click here.

Contributor

AlixPartners is a results-driven global consulting firm that specializes in helping businesses successfully address their most complex and critical challenges.

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