The rational consumer: Why China’s shoppers are spending smarter, not more

A sluggish recovery for the Chinese economy has left its consumers more cautious and selective about spending. The 2025 China Mega Report by research and consulting firm Chozan and marketing specialist Alarice uncovers consumers in a state of transition. Some of the key findings on consumer behaviour are:

• The shift towards rational and quality-driven consumption
• A focus on inner fulfilment and emotional well-being
• Travel is becoming an increasingly important part of consumer spending.
• Consumers embracing comprehensive health with a  focus on personal well-being and sustainability
• The growing credibility of KOCs (key opinion consumers) who are outpacing more conventional celebrities as purchase influencers.

The rise of quality over quantity

The new rational approach driving consumerism in China finds many expressions: for instance, reduced spending on indulgences such as beauty, overseas travel, food delivery and restaurants, and outdoor entertainment. Instead, consumers are choosing to spend on public utilities, home entertainment, groceries, and households, implying an uptick in home-cooked meals.

The focus is less on the instant gratification of short term spending and shifting towards balancing immediate consumption with more longterm objectives and goals. The focus on longterm goals is finding favour with an increasing number of consumers. 

Rather than make a glut of purchases, consumers are now focusing on quality and durability.

This is reflected not just in consumption choices but also on social media platforms, which have seen an increase in searches around themes like minimalism and quality life.

The rise of spiritual consumption over material consumption

Filling the void of conspicuous consumption is a greater focus on inner fulfilment and emotional well-being. Spending is seen as a panacea to ease feelings of sadness or to boost happiness, with 64% of consumers prioritising spiritual or emotional consumption over material consumption.

Satisfying emotional value is a growing and entertainment (live events ranging from concerts to stand-up comedy).

The rise of domestic over international travel

While international travel has fallen out of favour, domestic travel is rapidly gaining ground. From an occasional indulgence, travel is becoming a routine, albeit much looked forward to activity. More money is being spent on travel than ever before with nearly 40% spending over RMB 5000 to RMB 10,000 ($686 to $1372).

50% of travellers prefer domestic self-drive to reach their destinations. Niche locations top the list of must-visit places, with the hashtag #nichetravel gaining over 800 million views on RedNote.

The rise of health overindulgence

There is a growing preference for good health products and those that help consumers meet personal wellness goals or aid in relaxation.

Wellness is a key priority as can be gauged by searches on RedNote by over 200% followed by treatment and prevention. Leading the charge on this new focus on health are urban Gen Z and white colour workers.

This shift in focus has resulted in bars having to stock up on low or no alcohol alternatives.

The rise of KOCs over conventional brand ambassadors

Key opinion consumers  (KOCs) are taking the fight to Key Opinion Leaders (MKOLs) by emerging as a more trusted option for Chinese consumers. With typically smaller audiences, a more intimate connection KOCs come across as more trustworthy. This is also reflected in the number of merchants wishing to participate with KOCs.

They are not just good from an optics point of view but benefit the bottomline with KOC-contributed GMV up by 61% YOY in 2024.

KOCs are counted as a subset of KOLs who still dominate the digital marketing landscape. The KOL market size is pegged at 100 billion RMB ($13.79 billion). Other key digital marketing formats are short form video and official social media accounts.

KOL’s have a dominant presence in segments including makeup and skincare segment; food and beverage and computers, communications, and consumer electronics (3C).

Douyin and RedNote draw in the lion’s share of investments in KOLs.

However, the KOL space is not static, and the launch and popularity of virtual KOLs are on the rise. Virtual humans are expected to be a $6.5 billion market in China by 2025. The report said, “Virtual humans can effectively drive content creation and peripheral products, enabling continuous development of new trends in line with societal shifts. This suggests that the industry will maintain stable growth over the coming years.”