Core Insights - The article discusses the rising debate around "consumption downgrade," suggesting that it may actually reflect a shift in consumer behavior towards valuing quality and practicality over brand prestige [2][3][5] - The perspective of Yu Donglai, founder of the supermarket chain "Pang Donglai," challenges the notion of consumption downgrade, arguing that consumers are becoming more discerning and are voting with their wallets against inferior products [3][4][5] Group 1: Consumer Behavior Changes - Consumers are increasingly prioritizing value for money, leading to a preference for lower-priced yet quality products, as evidenced by the success of platforms like Pinduoduo [15][16] - The shift in consumer behavior is characterized by a transition from passive acceptance of brands to active selection based on actual needs and value [5][6] - The concept of "consumption cognitive upgrade" indicates that consumers are now more focused on the practical benefits of products rather than being swayed by marketing or brand prestige [5][6][10] Group 2: Market Dynamics - Data shows that from 2020 to 2024, the average per capita consumption expenditure in China increased from 21,210 yuan to 28,227 yuan, reflecting a compound annual growth rate of 6.8%, outpacing the CPI growth [7][9] - The structure of consumption is evolving, with a notable decline in survival-type expenditures and a rise in service and experiential consumption, indicating a shift towards quality and experience [11][13] - The rise of platforms like Pinduoduo illustrates a successful model that combines low prices with quality assurance, challenging the traditional view that low prices equate to low quality [15][16] Group 3: Implications for Businesses - Companies must adapt to the changing consumer landscape by either offering exceptional value through low prices or providing superior experiences through enhanced service and quality [18][29] - Large brands are facing pressure to move away from reliance on brand prestige and instead focus on delivering tangible value and quality to consumers [28] - Small and medium enterprises can leverage localized operations and exceptional service to build customer loyalty and differentiate themselves from larger competitors [29][30] Group 4: International Perspectives - The article draws parallels between the current Chinese consumption trends and Japan's fourth consumption era, where consumers shift from materialism to valuing simplicity and quality [19][20] - This transition in consumer behavior suggests a broader global trend towards more rational and meaningful consumption choices, moving away from mere brand loyalty [21][22] Group 5: Future Outlook - The future of consumption is likely to be defined by a balance between quality and price, with consumers increasingly seeking products that offer real value [30][31] - Companies that can effectively communicate and deliver on the value proposition will be better positioned to thrive in this evolving market landscape [31]