China's Consumer Is Not Who You Think

Western coverage of Chinese consumption has settled into a doom-laden narrative: households are saving more, spending less, and losing confidence in the property-wealth channel that drove two decades of growth. Every element of that story is true. The conclusion drawn from it is usually wrong.

Aggregate retail sales growth has indeed slowed, from a 9% average in the 2010s to around 4% today. But the composition of that spending has changed dramatically, and the shifts create as many winners as losers.

Experiential spending is booming. Concert tickets, travel bookings, restaurant spending, and fitness memberships are all growing at double-digit rates. Domestic travel recovered to 118% of 2019 volumes last year.

"Young Chinese consumers are trading goods for experiences at a faster rate than any cohort in history," said Yuki Tanaka, consumer analyst at Orient Research. "They are not saving because they are fearful. They are saving because they are choosing differently."

Value retail is the other big winner. Discount grocery chains, domestic apparel brands priced below international competitors, and secondhand platforms have all grown rapidly. Pinduoduo's user base now exceeds 900 million.

The property-wealth channel is genuinely broken. Homeowners who bought at the 2021 peak have seen values fall 30% or more in tier-two and tier-three cities. This has real effects on spending psychology, particularly among older cohorts who hold most of their wealth in housing.

For multinationals, the implication is clear: the era of selling to China as a monolith is over. Success now requires segmenting by generation, city tier, and category, and being willing to accept that some segments are simply gone.