Core Insights - Consumption has become the core engine of economic growth in China, contributing over 50% in the first half of the year [1] - The retail sales of consumer goods achieved a year-on-year growth of 5.0% in the first half of 2025, driven by various factors including effective government policies and an increase in disposable income [1] - The capital market is providing further development momentum for consumption, with a shift in capital flow towards companies with strong cash flow, brand strength, high chain operations, and digitalization [1] - Future optimization and upgrading of consumption structure will be achieved through the collaboration of policies, markets, and capital [1]

Core Insights - The report by KPMG China highlights a strengthening consumer market in China, with increasing consumer confidence and resilience observed in the first half of the year [1] - The interplay of policies, market dynamics, and capital will continue to drive innovation in new consumption scenarios, optimizing the consumption structure and leveraging the advantages of a large-scale market for long-term positive development [1] Industry Trends - The capital market is providing significant momentum for the development of the consumer sector, with a notable differentiation among sub-industries and the rise of new players reshaping the capital landscape [1] - Capital is favoring companies with robust cash flow, strong brand power, high chain integration, and advanced digital capabilities [1] Investment Opportunities - In the luxury goods sector, there is a shift of capital towards hard luxury categories, such as jewelry and gemstones, due to their asset preservation attributes [1] - In the apparel and footwear sectors, outdoor sports brands are rapidly expanding through mergers and acquisitions, while the IPO market continues to show a trend of differentiation with increasing head effects [1] - The health and beauty sectors are receiving sustained capital attention, particularly in health technology, functional skincare, and wellness management, with mid-to-high-end brands emphasizing functional ingredients being more favored [1]