Global Investors Bullish on China’s Consumer Market
A PwC report on China’s investment opportunities released on Sunday highlights immense investment and growth potential in China’s consumption upgrading, identifying key areas for growth in the consumer market.
“In 2024, China’s GDP grew by 5%, adding an increment equal to the total economic output of a mid-sized country,” the report notes, stressing the expansion of premium consumption among youth, rising demand from rural areas, and broadening grey-haired generation as key drivers of growth in China’s consumer market.
Earlier this month, China unveiled special initiatives to further boost consumption, outlining actions to increase urban and rural residents’ income, step up the provision of service consumption, support trade-in programs for homes and vehicles, and improve the consumption environment.
According to IMF Deputy Managing Director Nigel Clarke, China’s comprehensive package of reforms to boost consumption and lift productivity could raise its potential growth by about 1 percentage point per year over the medium term, translating into a level of GDP “that is close to 20 percent higher than our baseline by 2040”.
China’s young consumers, the PwC report notes, are becoming a powerhouse in the consumer market, boosting experiences such as art exhibitions, immersive role-playing games, and escape rooms, where pre-customer spending is soaring. Their appetite for digital and smart products continues to rise, expanding market for e-sports and equipment, smart wearables, etc.
A prime example is the blockbuster animated film Ne Zha 2. Apart from raking in RMB $15 billion in box office, its IP derivatives have recorded a market of equal value, with Bubble Mart Ne Zha-themed blind boxes repeatedly sold out.
In rural areas, robust demand for home appliances, automobiles, to daily essentials is set to unleash significant potential. According to China’s Ministry of Commerce, China’s rural online retail sales in 2024 grew by 6.4% y-o-y, with agricultural products jumping 15.8%. Per capita consumption expenditure of rural residents grew by 6.1 percent, 1.4 percentage points faster than that of urban counterparts. There are abundant investment opportunities in e-commerce platforms, logistics and distribution, and cultural-educational services catering to rural consumers, the PwC report highlights.
The elder generation, especially those aged 50 to 65, boasts higher disposable incomes and leisure time, adds another dimension. Their pursuit of premium lifestyle is fueling demand for advanced health supplements, top-tier outdoor products, luxury cultural tourism, and education and training services. In the next decade, more than 10 million people in China will enter the ranks of the elderly every year, forming the world’s largest elderly consumer market. Their contribution to GDP is expected to rise from 6% to 9% by 2035, according to China’s Ministry of Civil Affairs.
Technology and sustainability are accelerating this consumption upgrade. China’s consumer market showed early signs of recovery in 2025, with Ministry of Commerce figures indicating 4% retail sales growth in January-February – a 0.5 point uptick from the full-year 2024 performance. Energy-efficient appliance sales soared 166% during Spring Festival and new energy vehicle sales jumped 52% year-on-year. Tech firm Xiaomi’s IoT business surpassed a record high of RMB 100 billion in annual revenue, with smart home appliances registering robust growth. The company reported year-on-year shipment increases of over 50% for air conditioners, 30% for refrigerators, and 45% for washing machines, demonstrating a revolutionary smart home momentum.
“As China moves up the value chain, its growth will be more domestically driven,” Ian Goldin, former Vice President of World Bank, noted.
China’s GDP per capita has surpassed the $13,000 threshold. Over the past 5 years, the country’s average annual economic growth rate has been notably higher than the 5-year average of other economies after they exceeded the $10,000 per capita GDP level.
“China gave the answer for where growth would come from: growth from high tech, growth by higher efficiency, and high-quality growth,” said Mr. Roland Busch, President and CEO of Siemens at the China Development Forum held in Beijing on Sunday and Monday.
Sir Martin Sorrell, Founder and Executive Chairman of S4 Capital, a London-headquartered digital advertising and marketing services company, said while the effect of the consumption boost plan is beginning to unfold, China has abundant fiscal power to unleash more. He highlights huge opportunities in China’s technology, automobile, and pharma sectors.
Wendell P. Weeks, CEO of New York-based materials science firm Corning, told China Economic Net his company will invest more in China this year as part of their overall global expansion program. “We’ve been investing here consistently for 45 years and will continue to do so for decades,” he said.
