Core Insights - The report by McKinsey highlights the characteristics and trends of China's consumer market under the "new normal," indicating a shift to single-digit growth since Q2 2025, despite perceptions of consumer confidence issues and consumption downgrade [8][10][33] Group 1: Economic Growth and Consumer Behavior - China's GDP is projected to maintain approximately 5% growth in Q1 2024-2025, with resilience in domestic consumption, particularly in tourism, dining, and home appliance sectors [11][33] - Consumer expectations for growth in 2025 are cautious, with a forecasted growth rate of 2.3%, nearly unchanged from 2024's 2.4%, driven by urbanization and stable consumption-to-income ratios [11][12] - Urbanization is progressing, with urbanization rates increasing from 65.2% in 2022 to 67.0% in 2024, contributing to household growth [11][12] Group 2: Consumer Confidence Trends - Consumer confidence has stabilized, with 81% of respondents aware of recent economic stimulus policies expressing greater confidence in the macroeconomic outlook [16][21] - Rural consumers show increased confidence, benefiting from government policies, while urban affluent seniors and low-income millennials in tier-one and tier-two cities exhibit declining confidence [21][24] - The overall optimism among consumers is reflected in three-quarters of respondents maintaining a positive outlook on the economy [21][22] Group 3: Shifts in Consumer Priorities - Consumers are increasingly focusing on personal achievement, with spending decisions more influenced by personal asset values and income rather than general confidence levels [28][33] - Wealthy urban consumers plan to increase daily spending by 2.6% in 2025, prioritizing high-quality living and personal fulfillment through significant purchases and experiences [28][33] - The report indicates a growing complexity and differentiation in the consumer market, necessitating strategic adjustments by companies to capture emerging opportunities [33]

Group 1 - The core viewpoint of the article highlights the profound and complex transformation of the Chinese consumer market, entering a "new normal" phase, as revealed by McKinsey's report based on a detailed survey of over 17,000 Chinese consumers [2] - The report identifies three key trends in the Chinese consumer market under this new normal, providing valuable insights for understanding market dynamics and seizing business opportunities [2] - The Chinese economy shows resilience with a GDP growth rate of approximately 5%, and sectors such as tourism, dining, food and beverage, outdoor sports, and health are experiencing strong recovery [3][5] Group 2 - Consumers are gradually emerging from a period of low confidence and are adapting to the new normal, with a cautious but rational outlook on future consumption growth [5] - Despite a slowdown in expected household income growth, consumers anticipate that their consumption as a proportion of income will remain stable, reflecting a shift towards quality and value in spending [5] - The growth of urban households due to ongoing urbanization is injecting new vitality into the consumer market, leading consumers to prioritize quality and cost-effectiveness over mere expansion of consumption [5] Group 3 - Since September 2024, the People's Bank of China has implemented a series of stimulus policies aimed at boosting consumer confidence, resulting in 81% of surveyed individuals expressing greater confidence in the macroeconomic outlook [9] - However, consumer confidence is not uniformly distributed; affluent urban elderly consumers have seen a 20% decline in confidence, while rural consumers have experienced a notable increase due to government rural revitalization policies [12][9] - The disparity in consumer confidence reflects the complexity and diversity of the Chinese consumer market, necessitating differentiated market strategies based on regional and income-level variations [12] Group 4 - There is a notable shift from material consumption to value consumption, with consumers increasingly focusing on personal achievement and the emotional value of products and services [18][20] - Consumers are making spending decisions based more on tangible factors like personal asset value rather than solely on confidence levels, with affluent urban consumers expecting to increase daily spending by 2.6% in 2025 [20] - This transition indicates that businesses must not only provide high-quality products and services but also infuse them with cultural and emotional significance to connect deeply with consumers [20] Group 5 - Overall, the complexity and differentiation of the Chinese consumer market are increasing, with spending intentions being influenced more by actual income and assets rather than confidence levels [21] - Consumers are becoming more rational in their spending arrangements, emphasizing the enhancement of life quality, which presents both challenges and opportunities for businesses that can adapt and innovate [21] - Companies need to deeply understand the evolving consumer demands and offer products and services that fulfill the pursuit of personal achievement to thrive in this changing market landscape [21]

Core Insights - The article discusses the "new normal" in China's consumer market characterized by single-digit growth since Q2 2025, highlighting issues such as consumer confidence and consumption downgrade [1] - Despite challenges, the actual situation is more optimistic than some observers suggest, based on a nationwide survey of over 17,000 consumers conducted by McKinsey [1] Group 1: Consumer Trends - Trend 1: Consumers are adapting to the new normal, with GDP growth around 5% in 2024 and Q1 2025, showing resilience in sectors like tourism, dining, and health [2] - The expected consumption growth rate for 2025 is 2.3%, slightly down from 2.4% in 2024, driven by urbanization and stable consumer spending expectations [2] - Urbanization rate increased from 65.2% in 2022 to 67.0% in 2024, contributing to household growth [2] Group 2: Consumer Confidence - Trend 2: Consumer confidence is stabilizing, with 81% of respondents expressing more confidence in the macroeconomic outlook following stimulus policies from the People's Bank of China [4] - However, rural consumers show increased confidence due to government policies, with rural income growth at 6.6% in 2024 compared to 4.5% for urban residents [8] Group 3: Changing Consumer Behavior - Trend 3: Consumers are focusing more on personal achievement, with a shift towards spending on products and services that enhance quality of life [16] - Wealthy urban consumers plan to increase daily spending by 2.6% in 2025, indicating a return to normal consumption behavior [16] - Spending intentions are increasingly influenced by tangible factors like income and asset value rather than confidence levels [22]