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What’s driving the demand for winter apparel in China

The winter sports market in China, a relatively immature market, is gaining momentum, especially after the 2022 Beijing Winter Olympics. To illustrate, from November 1st to December 20^th, 2024, ski resort bookings in Heilongjiang, Jilin, Liaoning, and Xinjiang, increased by 50.49% year-over-year. Moreover, JD.com data shows that the sales of ski jackets saw a year-over-year growth exceeding 50%.

Meanwhile, enthusiasm for winter tourism continues to rise. Harbin, a top winter destination, recorded a 50% year-over-year surge in hotel bookings in November 2024. The average winter temperature in Harbin, around -15°C to -20°C, makes it necessary for these tourists to invest in winter apparel, even if only worn once. Nearly 80% of travelers planning ice and snow trips to Northeast China this winter are from southern China.

Growing demand for a blizzard of winter apparel choices

Chinese consumers are showing interest in a wider range of product categories and higher levels of sophistication. In addition to down jackets, thermal underwear and thick pajamas have become staples. They are not only prioritizing functionality, such as comfort and warmth, but also seeking more fashionable designs. Unlike the northwest locals, southern tourists buy warm apparel with distinct styles. Xiaohongshu travel posts reveal that while locals prefer practical black jackets and durable shoes, tourists favor light-colored down jackets, stylish boots, and fluffy hats that look cute in pictures.

Thermal underwear is no longer old-fashioned

Once regarded as an essential yet outdated household item for staying warm, thermal underwear—form-fitting, long-sleeved—was dismissed as old-fashioned by Chinese young people for years. However, as thermal sets have undergone significant innovation in both functionality and design, younger generations are now embracing them. During the 2024 Double 11 shopping festival, thermal underwear sets sales saw a robust increase by over 100% year-over-year.

Even though many are new to winter sports, renting apparel and equipment is not a popular choice

Even though many are still new to winter sports, Chinese consumers choose to purchase their own clothing and equipment instead of renting them. Rental gear at many ski resorts, for example, tends to be outdated and poorly maintained. Also, as people do winter sports more often, owning personal gear has become a more practical choice.

“New Year Battle Outfits”: Winning with new clothes in the new year

Wearing new clothes during the Chinese New Year, a tradition dating back to the Han Dynasty, symbolizes a fresh start. The term “New Year Battle Outfits” (新年战袍), coined on social media, describes the clothes people wear for New Year social occasions, such as family reunions and reunions with old classmates.

Compared to their everyday attire, Chinese people pay more attention to high-quality and luxury clothing in their New Years attire. Some seek clothes that look more expensive (显贵), while others prefer well-known brands. At the end of the day, it’s about showing “face” (面子). They want outfits that are not only stylish but also representative of their achievements. Designer brands, premium materials, and custom-made pieces, as well down jackets, cashmere coats, and fur, are sought. Also, when it comes to the color, red is an extra touch for good luck, but it’s not a must-have.

The MaMian skirt (马面裙) , one of most popular items of new Chinese style, has become a top choice for “New Year battle outfits.” Rising Guochao (国潮) has reignited interest in the “new Chinese style” (新中式), which combines traditional Chinese aesthetics with modern fashion, among the Gen Z in China. In January 2024, sales of MaMian skirts on JD.com increased by 300% year-over-year.

“Dopamine ski wear” (多巴胺色系雪服): bright colors for a bright winter sports experience

The dopamine dressing trend, which involves using bright and bold colors, extends to ski apparel. To add more emotional value to their winter sports experiences, people are wearing clothes that make them feel positive emotions, such as joy and relaxation. They also coordinate their outfits with their friends, wearing matching or complementary colors for a shared exciting experience. During the year-end shopping season (“双旦”礼遇季), from December 15^th to December 25^th, 2024, dopamine-colored ski wear brand ISEE MIGGA’s sales increased by over 500%.

Wearing pajamas outdoors and outdoor clothes indoors

China’s Qinling-Huaihe line divides regions with and without centralized heating, leaving southern areas to face bone-chilling winters without it. To stay warm, people wear thick coats indoors. In the southern province of Hunan, many locals are often seen wearing cotton pajamas both at home and even outside. This widespread practice has even earned them the nickname “Hunan Provincial Uniform (湖南省服)” on social media.

During COVID-19, as people spent more time at home and ran quick errands they sought more versatile clothing. Bananain, originally known for basic underwear, started in 2022 to introduce winter loungewear suitable for outdoor wear, focusing on both warmth and fashion.

China’s millennial retro fur-fashion based on Hong Kong’s pop culture

China’s millennial retro fashion incorporates classic symbols of Hong Kong pop culture, reflecting a longing for the “golden era” of economic prosperity and cultural confidence. Drawing from the urban aesthetics of the 1980s and 1990s, this style highlights items like fur, fur-collared coats, plaid wool suits, gloves, berets, and scarves.

“Colorful mountain” style: meeting the demand for versatile outdoor apparel

Consumers are incorporating outdoor clothing into their daily wear, with lightweight outdoor apparel appearing in scenarios such as commuting, going to school, and social gatherings. The sales of lightweight outdoor clothing on JD.com during the 23/24 autumn/winter season increased by 42% year-over-year.

The “colorful mountain” (多彩山系) style blends the functionality of outdoor gear and the sophisticated aesthetics of urban fashion. It features nature-inspired neutral tones, such as as khaki and brown, allowing the clothes to “blend” with the natural surrounding. It can also be combined with vibrant tones, like orange and pink, to make it stand out. Made from technical materials, it offers breathability, water resistance, and durability, making it suitable for urban and outdoor wear.

The winning winterwear branding strategies in China

Bosideng: The fashionable “down jacket expert”

Bosideng, recognizing the serious issue of brand aging, is committed to becoming a “down jacket expert.” Targeting the mid-to-high-end market, the brand creates unique, hard-to-copy products with its expertise in premium down jackets and strives overturn the notion of not being “fashionable”.

Whether partnering with the former creative director of Hermès, Jean-Paul Gaultier, to introduce an exclusive limited-edition series, or collaborating with the Chinese Antarctic Expedition Team to highlight the exceptional cold-resistant features of its products, Bosideng’s ultimate goal is to become the preferred choice for young local shoppers in the luxury segment.

Arc’teryx: A sports luxury leader redefining retail spaces

In early 2024, Arc’teryx unveiled a 2,400-square-meter eco-experience space—the Arc’teryx Museum in Shanghai–marking a pioneering step in immersive retail models. In December 2024, it launched an exhibition titled “Arc’teryx Genesis and Evolution Exhibition” at this museum. Co-curated with the Chinese Academy of Sciences, the exhibition recreates the excavation process of the “Berlin Specimen,” the most complete Archaeopteryx fossil. By merging the narrative of natural evolution with its own brand evolution, Arc’teryx gives consumers a deeper appreciation of its heritage and innovation.

Outdoor down jackets go sexy: The North Face x SKIMS collaboration

Once having wide presence in China’s down jacket market, The North Face has experienced limited growth in recent years. In China, its 1996 edition down jacket, popular among male college students, earned the nickname “male college student uniform” (男大校服) due to its ubiquity. To counter this stereotype, the brand is now expanding into the female consumer market. In December 2024, The North Face and SKIMS collaboration, was launched and became an internet sensation. The collaboration series includes 56 items, such as down jackets, bodysuits, and gloves, which cater to both the fashion needs of snow sports gear and SKIMS’ signature high-end, sexy style.

The partnership represents a reshuffling of target demographics: SKIMS aims to tap into the outdoor market, while The North Face appeals to SKIMS’ female consumer base. It also serves as a trial run for SKIMS in the Chinese market, where the brand has yet to establish official stores. This co-branding effort was a success. The collection sold out on launch day despite being available in only two offline stores with limited quantities.

China’s winter apparel market is becoming more mature as winter sports and travel continue to develop

• The growing popularity of winter tourism and sports is injecting new momentum into China’s winter apparel market. People in the wet and cold south are traveling to the snowy and cold north for snow and ice experiences, increasing the demand for winter clothing.
• Winter apparel is diversifying, with rising demand for down jackets, thermal underwear, and thick pajamas, among other items. China’s millennial retro fashion style, incorporating Hong Kong’s cultural influences and featuring fur, is making a comeback.
• Chinese consumers are also seeking more versatile clothing, such as pajamas that can be worn outdoors for quick errands and the “colorful mountain” style, which blends outdoor functionality with aesthetics.
• The Chinese New Year is a time to showcase winter fashion. In 2025, the MaMian skirt was a top choice, reflecting the growing desire to incorporate traditional elements into modern styles.

Download the full report on China’s summer sports market by daxue consulting here: https://daxueconsulting.com/china-summer-sports-market-report/

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Key consumers of the lipstick market in China

People aged from 25 to 34 have become the main consumer groups in the lipstick market in China. They account for about 58.8% of the total population, of which females are the main consumers. On average, a middle-class female consumer in China buys at least 5 lipsticks every year. 

However, women are no longer the only important consumer group for the lipstick market in China. The men’s beauty market in China has shown remarkable growth, contributing to an overall value of RMB 18.9 billion in 2023. The local skincare market continues its upward trajectory, with projections to reach RMB 21.3 billion by 2025. Recent data indicates a surge in lipstick consumption by men, with a remarkable growth rate of 278%. Notable influencers like Li Jiaqi, famously dubbed the “Lipstick King,” play a significant role. Li Jiaqi’s social media presence, featuring videos of him testing and recommending different lipsticks, has not only popularized male cosmetics but also normalized their use.

Many cosmetics companies have specially developed men’s facial skincare kits, cleansers, lotion creams, special masks, BB creams, CC creams, and lipsticks for male consumers. 

New trends in the lipstick market in China

Lip glosses lead the lipstick market in China

Lip makeup has several sectors: lipsticks, lip glosses, and lip glazes. From the perspective of market distribution, lip gloss, and lip glaze are the largest segment of the lipstick industry in China, accounting for about 53% of the lipstick market, followed by lipsticks, accounting for about 46%, and lip liners taking third place. 

The domestic lipstick market in China is booming

Driven by the rise of the beauty economy, increasing consumer demand for innovative and affordable makeup, and the growing influence of local brands, the Chinese lipstick market is experiencing remarkable growth. According to iiMedia Research, the size of China’s lip cosmetics market reached RMB 26.28 billion in 2023, representing a year-on-year growth of 13.0%, and is projected to grow further to 379.5 billion RMB by 2028. E-commerce platforms like Xiaohongshu (Little Red Book) and Douyin (China’s TikTok) account for a significant share of sales across the entire lipstick market in China.

Livestreaming and social interaction: Drivers of lip makeup growth in China

E-commerce platforms like Xiaohongshu (Little Red Book) and Douyin (China’s TikTok) play a pivotal role in driving this growth. These platforms go beyond being mere sales channels—they shape consumer preferences through personalized recommendations and livestreaming. For example, Xiaohongshu fosters a sense of community by enabling users to post shopping hauls and makeup tutorials and share honest reviews via comments. This creates a consumer-driven content economy that builds trust and drives sales.

What’s particularly unique to China is the seamless integration of social interaction and commerce on these platforms. Livestreaming sessions on Douyin are not just about selling products but also immersive events where brands engage consumers in real-time with limited-time discounts and interactive Q&A sessions. This real-time interactivity, combined with gamified shopping experiences and cultural nuances like “gift-giving culture” during festivals, creates a highly dynamic market environment. In the first half of 2024, Chinese brands such as INTO YOU, Perfect Diary, and Judydoll ranked among the top sellers on Douyin, collectively achieving over RMB 44.84 billion in sales.

In addition, the trend towards  “妆养合一”(makeup and care integration） has also contributed to the diversification and refinement of the lipstick market. Products such as hybrid lipsticks with skincare benefits, lip serums, and multifunctional lip tints are becoming increasingly popular. For example, Perfect Diary’s Biolip technology combines the effects of lipstick, lip balm, and lip masks, aligning with the growing consumer preference for health-focused, multi-purpose beauty products.

Foreign lipstick brands’ influence in China

Foreign brands, while still significant players in China’s lipstick market, are facing challenges as they adapt to shifting consumer preferences and increased competition from domestic brands. Historically, luxury brands like Yves Saint Laurent, Dior, Givenchy, Chanel, Estee Lauder, and Giorgio Armani dominated the market, leveraging their prestigious reputations and strong brand images. These brands have long been associated with reputation, quality, and marketing strategies that appeal to Chinese consumers seeking premium products.

For years, owning a foreign luxury lipstick symbolized social status and international cosmopolitanism. The appeal was further amplified by their ability to market themselves as purveyors of “true luxury,” emphasizing craftsmanship and exclusivity. The perception of quality played a crucial role. Foreign brands were widely regarded as offering superior products, especially when compared to the emerging local brands of the time, which were still developing their formulas. The association of “Made in France” or “Made in Italy” with luxury and trustworthiness allows foreign brands to gain popularity.

Foreign brands also excelled in marketing, creating emotional connections through collaborations with Chinese celebrities and global stars. For instance, Guerlain partnered with famous celebrities like Fan Bingbing to appeal to Chinese consumers who are fans of these celebrities.

However, the influence of these foreign brands has started to wane. French brands, in particular, remain prominent exporters of lipsticks to China, with France accounting for a significant share of the imported beauty market. Even so, their dominance is no longer unchallenged.

Domestic brands use traditional Chinese elements to attract customers

Considering the rise of cultural confidence in China, cosmetics using traditional Chinese aesthetics to risen in popularity. Some cosmetics brands that focus on Chinese designs cater to the consumption trend of modern young consumers. For example, Run Baiyan’s Forbidden City lipstick which is part of a Forbidden City cosmetic range includes lipsticks, eye shadows, blushes, nail polishes, and other makeup products. The most prominent are the six Forbidden City lipsticks, namely Langyao Red, Bean Paste Red, Rose Purple, Maple Leaf Red, Tourmaline, and Mermaid Ji. 

The color of the Forbidden City lipstick paste comes from the red national treasures in the Palace Museum. The appearance design of the lipstick tube is inspired by the costumes of the imperial concubine of the Qing Dynasty. The Forbidden City lipstick also uses 3D multilayer printing technology to print traditional patterns on the lipstick tube, highlighting the texture of the fabric and the three-dimensional sense of embroidery.

As a creative product developer, the Forbidden City has always developed many popular cosmetic products. With the support of fans, the Forbidden City lipstick marketing has received a lot of attention with its eye-catching design and colors.

Foreign lipstick brands also ride the wave of Chinese culture-themed designs

At the same time, many international brands also include Chinese cultural elements or regularly launch festival-limited products. However, some foreign brands have a relatively superficial understanding of Chinese culture. Most of the festive and New Year limited editions just add the Chinese zodiac of the year to the packaging.

Pharmaceutical companies enter the lipstick market in China

Currently, not only ordinary cosmetics companies but also pharmaceutical companies have entered the lipstick market one after another. Drug makers suffering from deteriorating earnings have chosen the lipstick market as a new growth driver.

For example, Ma Yinglong, which was focusing on hemorrhoid ointment, launched lipstick products recently. According to the Ma Yinglong Babao flagship store news, the lipsticks launched this time are Ma Yinglong’s brand Ma Yinglong Babao, which are magenta matte velvet cream, Champs Elysées matte velvet cream and first love color blemish water lip balm. The three lipsticks cost RMB 138, and the three-color set costs RMB 399.

Key takeaways about the lipstick market in China

• Lipstick is one of the most promising industries in the Chinese cosmetic market: it has a wide range of products both in luxury and low-end categories
• Men’s cosmetics are contributing significantly to the lipstick market, driven by increased demand and the influence of male beauty influencers.
• Lip glazes lead the market in popularity, followed by lipsticks and lip glosses, while hybrid lip products combining makeup and skincare are rising in demand.
• Domestic brands like INTO YOU, Perfect Diary, and Judydoll are gaining prominence due to affordability and innovation, challenging the dominance of foreign luxury brands.
• The integration of e-commerce platforms like Xiaohongshu and Douyin has revolutionized consumer engagement, blending social interaction with commerce through personalized recommendations, livestreaming, and gamified shopping experiences.
• Both domestic and foreign brands are leveraging Chinese cultural elements in their designs that appeal to many consumers.
• Pharmaceutical companies are entering the lipstick market, introducing health-focused products as a new growth strategy.

This article Men’s rising influence in the lipstick market in China is the first one to appear on Daxue Consulting - Market Research and Consulting China.

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Reclassified and the innovation of the “light salon”

Reclassified (RE调香室) is a luxury perfume brand born in 2013 in Shanghai. The brand started as a “salon perfume” seller and continues this philosophy to this day. Indeed, since its creation, Reclassified in China introduced the concept of “light salon” (轻沙龙), meaning that the perfume shall not be only something that an individual uses exclusively for himself, but needs to open up, so that as many people as possible can experience the fragrance. Furthermore, the brand refers to “salon perfume” to underline that they are a niche luxury brand that is not concentrated on appearance, but on the actual scent. Therefore, the refinement of bottles and packaging is left behind to give more space to the quality of their ingredients.

As of 2022, the brand counts more than 100 stores across almost 60 Chinese cities. In the same year, Reclassified was in the top 15 most appreciated perfumes in the country along with other famous brands such as Scent Library (气味图书馆) and the men’s perfume brand “SOLEHE” (和风雨). Another strength of the brand lies in its wide variety of products. Indeed, apart from selling perfumes, Reclassified also specializes in body lotions, creams, and candles.

Source: Reclassified.com, other products shown on the Reclassified shop

Consumer experience is the basis of Reclassified success

The company behind the success of Reclassified in China is the Shanghai Xiangmao Trading Co. (上海翔贸机电), a trading and investment company that founded the brand in 2013.  Although it was an already affirmed brand in the Chinese perfume market, in January 2021, the investment company CITIC holding (中信资本) stipulated an investment agreement with Shanghai Xiangmao, with the objective of further developing the beauty and perfume industry in China and giving the possibility to a wider range of people to get in touch with the Reclassified brand.

Apart from the external investments, one of the main features of the perfume company lies in prioritizing the consumer experience. Since 2016, Re Classified in China has allowed personalizing their own perfumes to its consumers. Consumers can find a section in their website which is completely dedicated to creating their own perfumes by mixing the fragrances.

Source: reclassified.com, process of a DIY perfume, from choosing the fragrances to its bottling 

Reclassified on social media: immense share compensates the few followers

Despite the scarce popularity of Reclassified on Chinese social media, with its Douyin official account (RE调香室) counting roughly 2200 followers and its Weibo account (RECLASSIFIED调香室) only 91,000, the brand relies a lot on users’ threads. Indeed, Reclassified can boast a high number of shares in its official Weibo hashtag (#RE调香室#), which has more than 11.2 million views. This is partially due to the fact that, in recent years, Gen Z has gained progressive interest in niche luxury products, such as Reclassified perfumes.

The hashtag is also used by many influencers and key opinion leaders to share their reviews about their products. As an example, on April 22^nd, 2024, the Weibo beauty influencer 变美你冲不冲 (The beauty you can’t rush), whose profile has more than 420,000 followers, positively reviewed Reclassified freshly launched bergamot fragrance. Furthermore, car fresheners are another product that is vastly appreciated by social media users both for the quality of fragrances and for the elegance of the product itself.

The continuous search for refined ingredients: Reclassified x Dominique Ropion collaboration

Apart from classical products, Reclassified in China recently launched an important collaboration to create new fragrances. In March 2024, the Chinese perfume brand partnered with Dominique Ropion, a world’s famous French master perfumer, and launched a series called “Masters of light” (逐光大师系列). The collaboration explores the combination of different fragrances of natural and refined ingredients such as pine needles, cashmere, and black tea. The collaboration was announced through a video posted on Weibo which, as of May 2024, has more than 15,000 views. The bottles are sold in two different measures: 50ml and 15ml, and have a price ranging from RMB 346 (USD 84) to RMB 614 (USD 85).

Source: reclassified.cn, Reclassified x Dominique Ropion official collaboration banner

Reclassified in China: from niche luxury perfume to an internationally famous brand

• With the increasing popularity of the Chinese perfume market and the constant growth of inland players, Reclassified is seen as one of the most famous luxury fragrance brands in China.
• Founded in Shanghai in 2013, Reclassified immediately revolutionized the perfume market introducing the concept of “light salon”. According to the brand’s philosophy, a perfume is not about visual appearance, but its ingredients. Therefore, the brand constantly searches for more refined and natural fragrances to add to their products, including perfumes, body lotions and candles.
• After the investments of CITIC holding, reclassified has the possibility to get known to more consumers. However, the brand was already famous for its DIY formula which, since 2016, allows consumers to create their own fragrance.
• Social media are another important factor for Reclassified success in China, having many trending hashtags and letting KOLs give their opinions about the brand’s products.
• Recently, Reclassified further developed its search for refined ingredients. In March 2024, the Chinese brand collaborated with Dominique Ropion, an important French master perfumer, and launched the series “Masters of light”, whose promotional video reached 15,000 views on Weibo.

Strategic insights for the Chinese perfume market: collaborate with Daxue Consulting

As Reclassified continues to shape the luxury fragrance market in China with its innovative “light salon” approach and dedication to natural, refined ingredients, staying ahead in this dynamic sector is crucial. Daxue Consulting offers deep consumer insights and market research tailored to the unique characteristics of China’s perfume industry. Our expertise can help you understand the evolving preferences and trends that influence consumer behavior, enhancing your strategy and positioning. Whether you’re looking to explore new market segments or optimize your product offerings, our consulting services provide the necessary tools to thrive. Contact us today to learn how we can assist in elevating your presence in the competitive Chinese perfume market.

This article The hidden gem of the luxury perfume market: the case of Reclassified in China is the first one to appear on Daxue Consulting - Market Research and Consulting China.

What are the drivers behind China’s global leadership in innovation?

What keeps China at the forefront of the global stage? Delving into the factors driving China’s leadership in innovation, it can be divided into two key factors. Firstly, China’s robust policies actively foster advancements in innovation and economic efficiency. Secondly, the intense competition drives an accelerated pace of innovation.

Government policies supporting innovation

‘’Made in China 2025’’ Initiative

The Chinese government has set out a “Made in China” growth program and aims to have 10,000 startups in key sectors of the economy by 2025. As of 2022, China had reportedly identified a total of 8,997 such companies. Transitioning from supporting industrial giants to fostering innovative solutions, the government’s policies have paved the way for small and medium-sized high-tech enterprises to flourish not only domestically but also in international markets. One successful example is Gan & Lee Pharmaceutical Co. Ltd., which developed a domestically produced insulin analog and penetrated 14 major foreign markets with its product.

Source: State Council of China and MERICS, designed by Daxue Consulting, core industries in Made in China 2025

Mass entrepreneurship and innovation demonstration base

In 2015, the Chinese government started promoting the building of mass entrepreneurship and innovation demonstration bases. This initiative aims to cultivate an environment conducive to innovation, akin to an incubator model, where entrepreneurs and innovators explore the needs of their target audience for products and solutions. These inventors receive comprehensive support services, including access to angel and venture capital, to fuel their ventures. At the end of 2022, there were 212 such platforms nationwide.

Despite the challenging economic environment and the fall in investment globally, China continued to attract significant investment in 2022. Approximately RMB 54 billion was injected into China’s biotechnology and pharmaceutical sectors. Moreover, in April 2022, the Chinese fast-fashion company Shein raised USD 1.5 billion in a new financing round, boosting its valuation to USD 100 billion. Similarly, in October 2023, the China-based electric vehicle company GAC Aion New Energy raised approximately USD 2.5 billion in Series A funding.

Source: Statistia, designed by Daxue Consulting, the volume of VC investments in China, 2022

High market competition

Moreover, the intense competition must drive the rapid pace of innovation in China. Many Western companies are at the forefront of technology, but Chinese companies are also catching up. A manager of a foreign company in China once lamented that Chinese products have twice the number of functions as Western products, but the price is only half. These multi-functional products are a typical result of Chinese innovation. Although there are no radical innovations, they bring important value to consumers at a lower price.

For example, Huawei has developed many world-class new technologies (such as LTE technology); BYD relied on reverse research and development to successfully transform from a battery manufacturing company to a leading electric vehicle company. Some domestic companies have extended their product innovation to business models innovation to penetrate all aspects of people’s lives.

Source: BYD official website, World’s Biggest Iron-Phosphate Battery Factory

Moreover, with its vast population, businesses face significant competition and receive critical feedback from users, which is a good way for them to keep improving. This environment compels companies to adopt a lean startup approach, emphasizing quick iteration and learning from real-world experiments. Many Chinese companies will test the market through repeated rapid experiments, error corrections, and adjustments. For example, through rapid trial and error, Alibaba successfully launched new products such as Internet finance and digital health, and also decisively eliminated some failed products, including “Laiwang(来往)”, a chat tool that competed with WeChat.

A closer look at China’s industries 

China is the world’s fastest-growing and most vibrant market for emerging digital technologies. With over 1.05 billion internet users and a dynamic consumer economy, China is undergoing rapid and large-scale deployment of emerging technologies, including 5G, advanced artificial intelligence, and blockchain-based technologies. The added value of the digital economy in Beijing reached RMB 1.406 trillion in the first three quarters of 2023, accounting for 44.3% of the GDP.

China’s dominance in the solar industry

China dominates the global market as the primary exporter of solar panels and related solar products. This leadership position is attributed to its efficient manufacturing processes, the establishment of specialized industrial clusters, and substantial governmental support for the solar industry. As a result, China, which possesses 29% of the world’s renewable energy patents, stands as the unrivaled powerhouse in the photovoltaic sector on a global scale.

Source: CGTN, A photothermal power plant with 12,000 heliostats surrounding a 260-meter-high heat-absorbing tower is in construction in Jiuquan City, northwest China’s Gansu Province

China’s role in unicorn companies and the formation of industry clusters

Furthermore, China contributes to half of the global e-commerce transaction volume and hosts 9 out of the 23 private financial technology unicorn companies worldwide. Besides this industry, unicorn companies are also concentrated in e-commerce, medicine, and high-precision equipment. The top unicorn companies in China are Bytedance, Shein, and Xiaohongshu. China shows an outstanding performance in artificial intelligence, e-commerce, and direct-to-consumer sales.

Due to the development of unicorn enterprises, China has formed multiple industry clusters. For instance, the Yangtze River Delta region is the hub for semiconductor and new energy industries. In the southeastern region, unicorn enterprises show a preference for new consumption, retail, and e-commerce. As for the Greater Bay Area (Guangzhou, Shenzhen, and Hong Kong), it excels in financial technology, e-commerce, high-tech manufacturing, and pharmaceuticals.

China completes turboshaft engine icing airworthiness test

According to news released by China Aviation Engine Group on January 29, 2024, China successfully completed the icing airworthiness test of the entire turboshaft engine. This marks an important breakthrough in China, which independently developed the AES100 advanced civilian turboshaft engine, filling the gap in domestic turboshaft engine airworthiness technology. The AES100 engine is the first civilian turboshaft engine in China that is completely independently developed and has reached a contemporary, internationally advanced level. After this success, the AES100 engine will continue to undergo multiple airworthiness tests and will provide power for various types of aircraft, such as civil helicopters and drones.

Source: cctv.com, AES100

Case study: Xiaomi’s game-changing electric vehicle, the SU7

A significant recent development in China is the introduction of Xiaomi’s latest product: the Xiaomi SU7. This marks a bold step forward in the electric vehicle sector, demonstrating the innovative prowess of Chinese manufacturing.

Lei Jun, the visionary founder of Xiaomi, has made a bold foray into the electric vehicle industry, embodying his innovative spirit across sectors. The introduction of the SU7 has sent shockwaves through the automotive industry. With specifications and pricing that defy conventional norms, the Xiaomi SU7, starting at RMB 215,900, disrupts the status quo by offering a premium electric vehicle at a competitive price point.

Source: carnewschina.com, Xiaomi SU7 at experience store in Beijing

Leveraging its expertise in smart home technology, Xiaomi has seamlessly integrated the SU7 with over 1,000 Xiaomi smart home devices. The SU7 boasts a spacious 16-inch infotainment screen and a 56-inch head-up display, ensuring that vital information is prominently displayed, underscoring its technological superiority.

Embracing endless opportunities

The landscape is teeming with prospects, from strides in artificial intelligence to eco-friendly technologies. As Hong Kong tech luminary David Lin aptly puts it, “The next chapter in China’s tech narrative is about co-creating a story of growth, innovation, and mutual respect.” With the dawn of a new era upon us, the journey ahead promises a blend of trials and triumphs. Leveraging the wisdom of thought leaders, there will be a future that not only shines brightly but collaboratively illuminates, demonstrating that through diverse collaboration and collective pursuit of excellence, the realm of possibilities knows no bounds.

Innovation horizons in mainland China

• China’s stellar performance in the 2023 Global Innovation Index (GII), ranking 12th globally and 1st among upper-middle-income group economies, underscores its unwavering commitment to innovation.
• Two primary factors driving China’s innovation leadership include robust government policies that foster economic efficiency and innovation, and the intense competition that accelerates the pace of innovation.
• Government initiatives like the ‘Made in China 2025’ program and the promotion of mass entrepreneurship and innovation demonstration bases provide a conducive environment for startups and innovators to thrive.
• China’s high market competition, fueled by its vast population and user feedback mechanisms, encourages companies to adopt lean startup methodologies and prioritize innovation, contributing to its global innovation prowess.
• Xiaomi’s entry into the electric vehicle sector with the SU7 represents a significant milestone in China’s automotive industry, showcasing the country’s innovative capabilities and disruptive potential in the global electric vehicle market.
• Industry giants like Huawei, Alibaba, Baidu, Tencent, and others have not only attracted numerous talented local experts but also are helping the Chinese economy grow at an unprecedented rate and influencing the global economy.

Strategic insights into innovation scouting in China

China’s rapidly evolving innovation landscape offers significant opportunities for businesses aiming to stay ahead. At Daxue Consulting, we provide expert analysis and strategic consulting for innovation scouting in China. Our insights help companies identify emerging technologies, and trends, and connect with innovative startups. Gain a competitive edge with our in-depth understanding of China’s dynamic innovation ecosystem. Let us support your business as you navigate and capitalize on this market.

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Recognizing this burgeoning interest, many TCM clinics have introduced evening outpatient services, catering to the scheduling constraints of young professionals who can only seek medical attention after work hours. These trends, reflected in a multitude of news stories, underscore the undeniable emergence of Generation Z as ardent advocates for TCM.

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A short introduction to Traditional Chinese Medicine (TCM)

Traditional Chinese medicine, also known as oriental medicine, is a treasure of Chinese culture. A medical system has been used for thousands of years to prevent, diagnose, and treat disease. It is based on the belief that Qi (气) (the body’s life energy) flows along the meridians (channels) in the body, keeping a person’s mental, emotional, spiritual, and physical health in balance.

The purpose of TCM is to restore balance and harmony between the body’s natural opposing forces of yin and yang, which can block qi and cause disease. Traditional Chinese medicine shines in a wide range of fields, radiating into all aspects of people’s lives, including acupuncture, diet, herbal therapy, meditation, physical exercise, and massage.

Growing interest in TCM therapies among Gen Z

Compared to Western medicine, which primarily focuses on symptom relief, traditional Chinese medicine (TCM) emphasizes treating the root cause of illnesses, aiming to address the underlying issues comprehensively. Due to its minimal side effects and consistent efficacy, an increasing number of young individuals are opting to explore TCM clinics for body regulation. For instance, TCM can effectively address issues such as insufficient qi and blood, decreased immunity, and gastrointestinal problems, thereby facilitating daily health maintenance, disease prevention, and beauty care.

Gen Z’s enthusiasm for traditional Chinese medicine massage soars

Currently, numerous members of China’s Gen Z are showing interest in traditional Chinese medicine’s diagnostic and treatment techniques. Across various social platforms, massage departments within traditional Chinese medicine hospitals are quietly gaining popularity among young individuals. Shared content praising the comfort of TCM massage and highlighting the immediate relaxation experienced during treatments has garnered significant likes and comments.

Qu Qing, an attending TCM physician at the Massage Department of Hangzhou Traditional Chinese Medicine Hospital, noted that during weekends, the department sees a surge in young visitors in their twenties and thirties, with the corridors bustling with activity. Advanced bookings are necessary to secure a massage appointment.

The fast-paced nature of contemporary social life, coupled with poor posture and lifestyle habits, has led to a demographic shift in ailments such as cervical spondylosis, originally associated with middle-aged and elderly individuals, now affecting younger populations, including adolescents. The increasing number of young patients born after 1995 seeking timely medical attention upon experiencing discomfort indicates a heightened awareness of health issues and a growing appreciation for traditional Chinese medicine culture.

Impact of entertainment media on shaping Gen Z’s interest in TCM

In addition to physical therapy, the release of popular internet dramas has also reflected Gen Z’s interest in traditional Chinese medicine culture, resulting in more Gen Z individuals becoming advocates for TCM. According to the latest data from the “China Better Life Survey,” in 2023, the top three consumption categories among young people aged 18-35 were travel (32.77%), digital products (31.67%), and healthcare (31.04%). On May 14, 2023, the drama ” Hòu Làng [后浪],” which focuses on the inheritance of traditional Chinese medicine culture and shapes the growth of young Chinese medicine practitioners, premiered exclusively on Youku.

Utilizing Generation Z’s enthusiasm for health and advocating for the public to adopt the correct lifestyle and attitude towards life were the original intentions behind ” Hòu Làng  [后浪].” The series depicts the serene professionalism of seasoned Chinese medicine practitioners juxtaposed with the youthful vigor of their successors, showcasing the cultural ethos of mentorship and succession. It narrates the journey of Sun Toutou (portrayed by Zhao Lusi), a young woman in her twenties, who, under the guidance of Ren Xinzheng (portrayed by Wu Gang), a professor at the University of Traditional Chinese Medicine, embarks on the path of learning traditional Chinese medicine and inheriting her family’s legacy. As a member of Gen Z, Sun Toutou opens her heart and proactively embraces the study of Chinese medicine. Featuring renowned actors and a compelling script, this television series has piqued the interest of more Gen Z individuals in TCM.

The contradiction between belief in TCM and the actual purchasing behavior of Gen Z

According to our recent survey, an overwhelming majority of respondents expressed belief in food-related TCM concepts, a sentiment that transcended age, gender, city level, and income level. For example, most people believe that maintaining a balance of “hot” and “cold” foods is crucial. Generation Z has emerged as particularly staunch advocates of these traditional beliefs.

However, even though a staggering 67.6% of respondents believe in TCM principles and incorporate them into their daily lives, when scrutinizing the actual purchasing behavior regarding health foods, the presence of traditional Chinese medicine ingredients ranks as the least influential factor. This apparent contradiction can be elucidated through the lens of Guochao, which reflects the growing consumer preference for Chinese brands, traditions, and designs. For young Chinese consumers, embracing TCM beliefs may serve more as a means to express cultural confidence rather than dictating their dietary choices. Interestingly, skepticism about traditional Chinese medicine in food tends to increase with rising income levels.

Consumption patterns in F&B of TCM-related products among Gen Z

Health preservation has become an important part of lifestyle consumption, especially for Generation Z. Chinese health tea drinks and meals have become popular on the Internet. There have been comments with more than 8,000 likes on the Xiaohongshu – “Will the Chinese medicine clinic beat the milk tea shop?”.

As the popularity increases, with the rise of traditional Chinese medicine, many traditional Chinese medicine clinics have opened tea shops, providing innovative formulas combined with pharmacology. Many people on the Internet say that milk tea shops opened by traditional Chinese medicine centers are safer to drink.

Not only that, but in daily life, people also choose to take some supplements for health care, and income has become a key factor affecting the choice of supplements. Vitamins A and C decrease as income increases. In contrast, collagen, lutein, omega-3, and royal jelly tend to be more expensive and consumption increases as income increases. 

Products combined with traditional Chinese medicine are very popular. For example, launched in 2022, the TCM energy drink “一整根熬夜水” (Whole root all-night elixir) made waves with its transparent bottle showcasing a genuine ginseng root. This innovative product targets aspirational white-collar consumers in top-tier cities, offering affordable ginseng-infused water. As of February 2024, the keyword “whole root” has been viewed approximately 3.2 million times on Xiaohongshu, demonstrating its online influence.

How does Gen Z embrace TCM?

• The emergence of Generation Z as vocal proponents of traditional Chinese medicine (TCM) is clearly demonstrated by the significant engagement observed on various digital platforms.
• On the internet, TCM culture is experiencing a “secondary spread” through word-of-mouth, enabling more young individuals to deepen their understanding of TCM massage and physiotherapy.
• The surge in popularity of massage departments within TCM hospitals among young individuals further highlights Gen Z’s growing interest in TCM therapies.
• While a significant majority of respondents express belief in food-related Traditional Chinese Medicine (TCM) concepts, such as maintaining a balance of “hot” and “cold” foods, actual purchasing behavior among Generation Z reveals a disparity.
• These trends underscore the undeniable emergence of Generation Z as ardent advocates for TCM, shaping the landscape of healthcare consumption and cultural appreciation.

We are experts on Chinese consumer insights and market trends

Generation Z’s rising advocacy for Traditional Chinese Medicine (TCM) marks a notable shift in healthcare preferences, influencing various sectors, including the food and beverage industry. As these young consumers increasingly integrate TCM into their daily lives, from packed TCM hospital departments to high engagement on digital platforms, the landscape of healthcare and wellness is evolving.

Daxue Consulting offers deep market insights and strategic expertise, capturing these trends through rigorous analysis and comprehensive reports, including our recent F&B industry white paper. Our services help businesses understand and adapt to the dynamic interplay between cultural heritage and modern consumer behavior, shaping strategies that resonate with China’s new generation of consumers. Contact us to talk about your project in China!

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Influencing factors: The blossoming children’s activities in China

The growth of these entertainment and education options reflects the rise of the “children’s economy” in China. The market for children’s arts training alone reached over RMB214.96 billion (USD31.13 billion) in 2019.

One of the factors is due to the increased awareness of children’s holistic development caused by the “Double Reduction” policy. It was aimed at alleviating the academic burden on students in compulsory education. This has drawn sustained attention from various sectors of society. This education crackdown policy mandates a reduction in excessive and advanced off-campus tutoring. The policy prohibits non-academic training institutions from conducting academic training and bans the provision of overseas education courses. Furthermore, off-campus training organizations are not allowed to organize academic training during national holidays, rest days, or winter and summer vacations.

Since the implementation of this policy, there has been a significant decrease in academic tutoring across various regions. At the same time, sports training has surged in popularity, with some popular programs being in high demand and hard to enroll in. Moreover, the inclusion of competitive sports as part of the criteria for Gaokao scores could be a contributing factor to their rising popularity. Additionally, the trend towards smaller family sizes has led parents to allocate more resources to the development of each child.

Outside academics: Parents investment in music and sports as children’s activities in China

Music: Enhancing cognitive and academic excellence

Learning music is widely believed to boost children’s cognitive growth, promote academic success, and nurture creativity and discipline. Mastering a musical instrument is valued as an important extracurricular accomplishment, providing a competitive advantage in China’s school and college entry landscape. Consequently, many parents motivate their kids to pursue music to cultivate these advantageous qualities. According to investment firm data, online tutoring is expected to represent RMB10 billion (USD14.3 billion) of China’s estimated RMB 400 billion music education market in 2022.

China’s Central Conservatory of Music’s website outlined a recommended roadmap for children’s musical education based on different age groups. Children age 1-4 are suggested to be exposed to music. Between 4-6 years, there should be a focus on basic music literacy such as singing lessons. For those 5-12 years old, different instruments are introduced as well as foundational music theory and one-on-one lessons for ages 5-18.

Different musical instruments also suit different age groups. For example, children aged 3-7 can learn to play the piano while flutes would suit children aged 9-12 as the instrument needs a specific posture and breath control. During the second Guangdong Provincial Emerging Music Education Development Conference in May 2023, piano and guzheng were reported as the most popular musical instruments for children.

Swimming: A life skill and a healthy habit

The Chinese government, recognizing the importance of water safety and swimming skills, mandated swimming lessons in some schools. This has led to a boom in both pool construction and children’s participation in swimming lessons. Beyond safety, swimming offers a healthy way to exercise, promoting physical fitness and overall well-being.

In 2021, Yangpu District in Shanghai initiated the “Everyone Learns to Swim” program for nearly 53 elementary schools, targeting fourth-grade students. This program partners with seven community swimming venues to provide two weekly swimming lessons for almost 10,000 students.

Moreover, as reported by CCTV Finance, the swimming and diving training center in Shenzhen Sports Center has become extremely popular after the “Double Reduction” policy. 1,800 students, mostly from primary and secondary schools, enrolled in 2021. Swimming training, in particular, is one of the hottest sports training programs for school-aged children in Shenzhen. Due to limited venue space, new students can only enroll in swimming classes if there are available spots.

The boom of tennis among youth: Inspiration from Chinese stars

China’s tennis population is second in the world with a significant number of young players ranked in junior categories. This indicates a robust pipeline of talent and a growing interest in the sport among the youth. In Wenzhou, the interest in youth tennis is on the rise. As a result, children make up more than half of the nearly 20,000 tennis players in the city.

This surge in popularity can be attributed to several factors such as the remarkable achievements of Chinese tennis players at major international tournaments, including Grand Slam events, which have garnered significant attention and inspired many young fans. Players like Zhang Zhizhen reaching the ATP 1000 Madrid Masters quarterfinals, Zheng Qinwen’s performance at the US Open, and the historic breakthroughs at Wimbledon have fueled national pride and interest in the sport.

Parents view tennis not only for general fitness but also as offering clear pathways and prospects. Not just for potentially launching professional careers but also for benefiting educational and employment opportunities. Despite the slim chances of making it professionally, having tennis skills is seen as advantageous for admission into schools and for personal development.

Ice skating: From leisure to competitive excellence

Beijing’s Winter Olympics sparked a big jump in kids’ interest in ice sports. Indoor rinks became popular, making ice skating more accessible. Even young kids were having fun learning with special ice walkers. These rinks created a fun community for kids to share experiences. Online deals like group tickets on Douyin further boosted participation.

By the end of 2019, the participation of Beijing’s school students in ice and snow sports nearly doubled from the previous year, reaching around 840,000. The Chinese Figure Skating Association reported a record-high 3,187 applicants for the initial phase of the national figure skating level test for 2021-2022. This marked the highest number of applications for a single event phase since its inception in June 2020. Across the 2020-2021 season, the association conducted two online level tests. It attracted 11,990 participants which highlighted the growing interest in figure skating among the youth.

The influence of the Beijing Winter Olympics extends far beyond ice skating, catalyzing a broader interest in a range of winter sports. An increasing number of Chinese children are enrolling in skiing programs. This phenomenon signals a vibrant and growing market for winter sports and related industries. This newfound enthusiasm among China’s youth is not just a boon for the sports themselves but also presents a significant opportunity for winter sports brands and educational institutions.

Experiential learning: The dual appeal of theme parks and museums as children’s activities in China

China’s theme parks: Children meets fantasy land

Despite a slight decline in visitors (0.33%) in 2022, China’s theme parks’ revenue grew 15.29% to RMB 15.35 billion (USD 2.13 billion) thanks to the opening of 10 new mega parks, including Universal Beijing Resort. As of 2023, China is home to 82 mega theme parks. The industry shows a trend towards branding and themed park chains. Over half of the mega parks belonged to established chains like Fantawild (方特) and Happy Valley (欢乐谷). This focus on branding is seen as a strategy to increase return visits. Shanghai Disney remains the most visited park, while Universal Beijing boasts the highest revenue.

Based on the visitor’s demographic, Shanghai Disneyland attracts all age groups. However, according to a report in 2021, visitors aged 30-50 with children are the second largest group with a proportion exceeding 30%. According to a survey, 85% of parents in China have taken their children to amusement parks in 2023.

Cultivating curiosity: Educational innovations in Chinese museums, aquariums, and education centers

Museums across China are increasingly focusing on creating engaging and interactive exhibits. It was held alongside hosting workshops and events designed to attract and educate younger audiences. For instance, in the summer of 2023, the Chengdu Museum introduced the “Weekend Children’s Museum” event which led to a long queue of families. This initiative aimed at captivating young minds through activities related to the natural world, history, and art.

Similarly, the National Museum of China noted that children and teenagers (ages 1 to 18) comprised 19.24% of its visitors in 2022. They are ranked as the third largest demographic group of museum visitors. Despite challenges posed by the pandemic, the museum continued to offer public educational services, including guided tours, educational programs, and volunteer opportunities. It introduced special programs targeted at the youth. For instance, summer camps centered on Chinese traditional culture, camps for junior guides, and archaeology camps at the Xinglong (兴隆) Site. Additionally, the museum expanded its educational outreach through the Oracle Bone Inscription series and fostered partnerships with schools to form volunteer teams.

Hands-on science: early education centers for kids in China

Aquariums are another venue where children can be sparked by curiosity while learning. The place serves as a living classroom, offering children firsthand knowledge about marine life, ecosystems, and conservation. Many aquariums focus on conservation efforts and teach visitors about the impact of human activity on marine ecosystems. Shanghai Ocean Aquarium (上海海洋水族馆) is one of the most famous aquariums in China. It is known for its long underwater viewing tunnel, which is one of the longest in the world.

In China, there has also been a rise in science education centers aimed at offering hands-on learning experiences for young children. The typical age is between 1 to 7 years. These centers utilize a variety of simulated environments, educational tools, and techniques inspired by neuroscience to facilitate learning. By incorporating games and situational learning methods, these centers allow children the freedom to explore on their own. From an early age, emphasis is placed on fostering children’s emotional well-being, skill development, and personality growth.

Investing in the future through children’s activities in China: Embracing arts, sports, and play

• China’s plummeting birth rate and economic boom have led parents to invest more in their children’s holistic development. This fueled a surge in the children’s economy, especially in children’s extracurricular activities and entertainment.
• The children’s arts training market in China reached over RMB 214.96 billion in 2019. It was driven by increased disposable income, a focus on holistic development, and smaller family sizes.
• The “Double Reduction” policy, aimed at reducing academic pressure, has boosted non-academic activities like sports training. It became so popular that some programs were hard to enroll in.
• Music education is valued for enhancing cognitive growth and academic success. Online tutoring is expected to represent a significant portion of China’s music education market.
• Swimming is promoted for its safety and health benefits, with initiatives like Shanghai’s “Everyone Learns to Swim” program.
• Tennis is gaining traction among youth, inspired by Chinese stars’ international successes. It is seen as beneficial for physical fitness, educational opportunities, and personal development.
• Interest in ice skating surged following the Beijing Winter Olympics, with significant participation in national-level tests and online platforms promoting group ticket sales.
• Despite a slight visitor decline, China’s theme park industry grew in revenue, with new mega parks opening and a focus on branding to increase return visits. Families with children are a significant demographic.
• Museums and aquariums in China are engaging younger audiences with interactive exhibits and educational programs. These were aimed to cultivate curiosity and education outside traditional classrooms.

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Evolution of Chinese kids furniture market: From scarcity to abundance

The development of the Chinese children’s furniture market has been a gradual journey. In the last century, compared to the global kids furniture market, the Chinese one was virtually nonexistent due to the underdeveloped economy. Many children made do with makeshift study spaces like coffee tables or regular tables and other wooden furniture at home. Even when families could afford desks, specialized children’s learning tables were rare.

At the turn of the 21st century, children’s furniture slowly gained visibility. However, manufacturers initially focused on adapting adult furniture for children, merely altering shapes and colors to suit preferences. In recent years, societal shifts and increased parental focus on children have propelled the market growth of children’s furniture brands. This surge has led to a proliferation of diverse and innovative children’s furniture options in the market.

Chinese consumer preferences in children’s furniture styles

Beloved by children: the popularity of IP co-branding

In recent years, children’s furniture brands have been keen on catering to both consumer and children’s psychology by introducing unique and appealing furniture lines. Starting in 2022, Quanyou Furniture(全友家居) collaborated with the popular cartoon IP “B.Duck” (小黄鸭) to introduce a series of products, and carried out pop-up stores in Chengdu’s popular business districts, attracting many consumers and obtaining widespread acclaim.

In 2024, responding to the growing demand for personalized options, Quanyou launched the Strawberry Bear series, staying true to its brand strategy of being youthful, fashionable, and international while enhancing design and product quality. This series, developed in collaboration with Disney, features a range of items such as floating beds, treehouse beds for teenagers, children’s sofas, mattresses, lazy sofas, kids’ outdoor furniture and baby furniture.

Beyond their charming aesthetics, these pieces prioritize comfort and safety. Constructed from solid wood and plush, high-elastic cotton, they are designed with children’s physiological needs in mind. A notable highlight is the bed screen, crafted from dirt-resistant and durable materials, ensuring easy maintenance and reducing parental hassle. This commitment to both design and functionality underscores Quanyou’s dedication to meeting the evolving needs of modern families.

Functional furniture: Safeguarding children’s health

As parental education and consumption patterns evolve, and concerns over children’s spinal and vision health grow, the demand for functional children’s learning supplies is on the rise. These products not only meet children’s daily learning needs but also integrate ergonomic principles and functional designs to create a healthier learning environment.

To address the issue of prolonged sitting and its negative effects on children’s spines, ergonomic chairs tailored to children’s physical characteristics have emerged. These chairs feature adjustable backrests, cushions, armrests, and footrests, allowing children to customize their seating position for optimal comfort and support. Scientifically designed to discourage poor sitting habits like slouching or lying on the table, these chairs contribute to the overall health and well-being of children in the learning environment. Due to their functionality, they are becoming more and more popular in the global market.

In addition to ergonomic chairs, the study desks available in the market incorporate features such as tiltable tabletops. This design ensures that the child’s line of sight remains parallel to their books or learning materials, reducing eye strain and neck discomfort. By promoting proper posture and alignment, these desks help prevent vision problems like myopia. When used with ergonomic chairs, children can maintain correct posture, including an upright spine and extended neck, throughout their learning sessions.

Consumers are shifting towards high-end children’s products

An increasing number of Chinese consumers are shifting away from haphazardly selecting kids furniture and are now leaning towards purchasing foreign brands or local brands with high quality and guarantees. This trend is propelled by several factors working in tandem.

Elevated consumption uncertainty amid potential hazards

For a significant duration, children’s furniture and regular furniture shared the same standards, leading to a prolonged absence of industry-specific regulations for children’s furniture. This resulted in a considerable safety risk, with substandard and poorly produced children’s furniture flooding emerging markets like China, largely originating from small factories without brand-backed quality assurance.

The introduction of the new national standard GB28007-2011 “Children’s Furniture-General technical requirements” in August 2012 marked a pivotal improvement, providing a national benchmark for Chinese children’s furniture market. However, The emergence of legislation has not completely eradicated the problem of Children’s furniture quality.

A CCTV survey last year showed that 30 percent of children’s furniture in random checks did not meet safety standards, with chairs and benches having the highest failure rate. Simultaneously, parents find it challenging to assess furniture quality independently, often relying solely on sales staff guidance during selection.

In response to these concerns, an increasing number of consumers, especially in the growing middle-class population opt for high-end children’s furniture brands, both domestically and internationally, offering quality assurance for their children’s health and safety. While legislation has improved the safety of children’s furniture, creating a secure environment for children necessitates collaborative efforts among domestic producers, retail platforms, regulatory bodies, and consumers.

Influence of female consumers on children’s furniture trends

Today, the primary decision-makers for purchasing functional children’s school supplies are predominantly young, affluent, and highly educated mothers. Guided by progressive educational ideologies and the pursuit of top-tier educational standards, they exhibit a strong willingness to invest in quality products. These discerning consumers prioritize high-end materials and are inclined towards high-tech solutions that offer tangible benefits for their children. In addition to furniture that meets traditional education, furniture that can realize play-based learning has become their new consumption goal.

Functional furniture serves as more than just tools for ensuring children’s health and safety; it also plays a subtle role in nurturing children’s development. Items like learning tables and chairs promote good study habits and proper posture, while themed furniture series spark children’s creativity and imagination.

For these parents, only premium domestic and international brands can fulfil their diverse requirements, reflecting their preference for comprehensive solutions. This preference for high-end products stands as a driving force behind the expansion of the high-end children’s product market and online channels for such purchases.

What is the future trend of children’s furniture

As market demand expands and competition between brands intensifies, an array of new children’s furniture products continues to emerge. The concept of whole-house customization is gaining traction among the Chinese kids’ furniture industry, with themed children’s rooms emerging as a focal point. From themed tables and chairs to cabinets, carpets, and walls, these elements harmoniously add color and comfort to the room, creating cohesive and immersive environments.

Moreover, educational toys designed for easy disassembly and cleaning not only stimulate children’s imagination and creativity but also alleviate concerns for parents. This shift from traditional desktop learning to dynamic room settings allows children to engage with furniture in playful and interactive ways, fostering valuable parent-child bonding experiences.

Looking ahead, automated digital technology is poised to revolutionize children’s furniture. Features such as automatic lifting tables, adjustable lamps, and even self-adjusting beds are on the horizon. Given children’s limited autonomy, integrating smart technology into furniture can enhance safety and comfort by analyzing and responding to the surrounding environment. Despite this potential, the adoption of smart technology in children’s furniture remains relatively limited, presenting an opportunity for innovation in the market.

Key characteristics aiding understanding of the Chinese children’s furniture market

• After years of development, China’s children’s furniture market has matured significantly, boasting immense market value and potential
• Furniture brands started collaborating with popular intellectual properties, combining aesthetics with a focus on children’s requirements
• Parents prefer functional furniture due to its capacity to safeguard children’s health
• Quality issues persist in Chinese children’s furniture, prompting consumers to opt for high-end alternatives
• The primary consumers in the Chinese children’s furniture market are affluent and well-educated mothers, who prioritize the internal influence of furniture on their children
• In the future, the trend is expected to shift towards supporting children’s furniture series and smart furniture, each boasting its own distinct advantages

The surge in demand for children’s furniture in China: a gateway for international brands

As Chinese parents become increasingly conscious of child safety and development, the demand for quality children’s furniture is rising sharply. At Daxue Consulting, we leverage our deep understanding of market trends and consumer behavior to help international brands successfully enter and expand in this growing sector.

Our services encompass thorough market analysis and strategic consulting, tailored to navigate the complexities of the Chinese children’s furniture market and connect brands with their target audience effectively. Contact us to schedule a consultation.

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Xiaomi’s meteoric rise: a story of unprecedented growth

Xiaomi’s exponential rise in the tech industry is credited to its unique approach of combining affordability with high quality in its smartphone offerings since its inception. This approach resonated well with consumers across China, enabling Xiaomi to quickly capture a substantial market share and become a key market leader by 2014. A pivotal moment in Xiaomi’s history was the 2011 launch of the Mi 1, which emerged as one of the company’s most successful products. The overwhelming demand for the Mi 1 was evident when Xiaomi received over 300,000 preorders within the first 34 hours of its announcement.

In 2013, Xiaomi drastically grew its sales with the release of its e-commerce platform Mi Market. This allowed the company to become China’s third-largest e-commerce company.  By 2014, Xiaomi also started to expand globally, particularly into South Asian markets like India, becoming the world’s fourth-largest consumer electronics company.

From 2015 onwards, Xiaomi began to capitalize on its smartphone success and implement a diversification strategy that could allow Xiaomi to broaden its reach into other segments of consumer electronics and further open up new avenues for revenue. The company has since significantly expanded its product line, reaching over 80 different items offerings including laptops, TVs, wearables, speakers, and other lifestyle products.

As of June 2021, according to Counterpoint Research, Xiaomi has reached a significant milestone by achieving the biggest share of monthly smartphone sales, joining Samsung and Apple as a leading player in the global smartphone market. However, with rising competition within the Chinese market, Xiaomi’s share has stagnated at around 9% while globally Xiaomi’s presence has stabilized at around 14% of global sales.

Xiaomi’s game-changing business approach

Revolutionizing affordability as part of Xiaomi’s strategy

The first crucial aspect of Xiaomi’s business model is its commitment to affordability. By streamlining their supply chain and manufacturing processes, Xiaomi manages to keep costs low without sacrificing quality. This also allows them to constantly be up to date with the most technologically advanced products at more affordable prices for a broader demographic. Xiaomi also saves considerable costs by overwhelmingly selling its phones online via its platform, Mi Market.

Putting customers first: Xiaomi’s secret to continuous improvement

The company is famous for actively engaging with its customers and listening to their feedback, to understand their needs and preferences better. Xiaomi currently operates a consumer-centric business model which is very similar to that of Amazon. The company heavily relies on feedback gathered from its online user community, named MI,  which it then integrates into its product development efforts. This practice is a winning strategy not only because it constantly improves the delivery and quality of the product but also because it helps Xiaomi keep a loyal and engaged user base.

Cutting-edge pricing: Xiaomi’s innovative razor-blade model

Xiaomi’s pricing strategy is also a cornerstone of its success. It revolves around a “razor-razor blade” model. This involves selling certain products, like smartphones, at low profit margins or even at a loss, to attract customers into their ecosystem. Once customers are integrated, Xiaomi then markets profitable complementary products to them in bundle deals. This strategy not only boosts sales of Xiaomi’s affordable hardware but also draws consumers into Xiaomi’s broader ecosystem. In this context, customers can be encouraged to buy additional products that generate revenue, such as smart home devices equipped with XiaoAi (小爱) voice recognition technology.

Building a tech empire: the strength of Xiaomi’s ecosystem

Finally, Xiaomi’s ecosystem strategy is a key part of its business model, involving investments in or partnerships with various companies to create a wide range of products. This approach allows Xiaomi to expand beyond smartphones into other technology sectors, maintaining a diverse portfolio of products and services. One prominent example is the Mi Band, a fitness tracker developed in collaboration with Huami. This product has been highly successful, offering features like heart rate monitoring, step counting, and sleep tracking at a very competitive price point. Another example is Xiaomi’s investment in Ninebot, a company known for its electric scooters, enabling it to expand its product range in the electric transportation segment.

Marketing genius: crafting Xiaomi’s global brand image

Xiaomi has crafted a cost-effective marketing strategy largely inspired by Apple’s handbook. Instead of investing huge sums of money in launching advertising campaigns, Xiaomi showcases its new products mainly through its social media accounts including WeChat and Xiahongshu. For instance, Xiaomi’s focus on digital content, like user-generated reviews and unboxing videos, has traditionally played a significant role in its advertising strategy, bolstering strong user engagement.

However, Xiaomi’s advertisement efforts peak through its dynamic public events that resemble more tech festivals than standard conferences. These vibrant gatherings are not just product reveals; they are experiences designed to generate excitement and build a community spirit among users. A distinctive element of these events is the ‘flash sale’ model, where products are sold online in limited quantities for a short time.

But Xiaomi’s wide notoriety couldn’t have reached such high profiles in so little time if it wasn’t for the unique identity and charismatic profile of its founder and CEO, Lei Jun. Lei Jun has rapidly elevated the company’s profile to great heights, drawing frequent comparisons to Steve Jobs for his visionary leadership style. Under his guidance, Xiaomi has embraced the philosophy of ‘innovation for everyone,’ targeting tech-savvy yet budget-conscious consumers. He constantly makes the headlines, pushing Xiaomi brand awareness alongside his public image.

Conquering new markets: Xiaomi’s strategy in the Indian market

Since its first overseas expansion into Singapore in 2014, the company has rapidly expanded internationally by launching in more than 80 markets. However, Xiaomi’s entry into the Indian market in 2014 is the most notable textbook example of a well-executed international strategy. In less than 4 years,  Xiaomi made a remarkable ascent to the top of India’s smartphone market, surpassing Samsung as the market leader in 2018, and reaching in 2021 a peak of 27,3% of India’s s total smartphone market. This strategy was especially successful in 3 aspects:

Pricing was the first. Even though price competitivity is naturally engrained in Xiaomi’s value proposition, no other company has been better at recognizing the particular price sensitivity of Indian consumers.  For instance, Xiaomi astutely focused on offering high-quality smartphones specifically at selling prices below USD 200 device, like the widely popular Mi11 series.

Additionally, Xiaomi’s commitment to localizing its production played a crucial role in minimizing costs associated with import duties. A significant milestone in Xiaomi’s local integration was its ability to source 65% of its components domestically.  

But beyond pricing strategies, Xiaomi differentiated itself by customizing products to align with local preferences. Collaborative efforts with e-commerce platforms such as Flipkart for exclusive launches, coupled with the creation of India-specific products like the Redmi Note 4, solidified Xiaomi’s position as the preferred choice for Indian consumers, making it their top go-to brand. 

Future-proofing Xiaomi’s strategy: Adapting to tomorrow’s tech trends

Although Xiaomi’s business model has been able to generate unprecedented levels of success, the company has to contend now with new competitors like Oppo and Vivo, which have perfectly reproduced its low-cost and high-value model and are quickly gaining ground. Xiaomi’s future relevance will strongly rely on its ability to adapt to this new scenario.

Further internationalization

First of all, Xiaomi’s response should focus on a continued emphasis on international expansion, a strategy that has already shifted its revenue sources significantly. In 2015, 6% of Xiaomi’s revenue came from outside Mainland China. By 2018, this figure had already risen to 40%. Some of Xiaomi’s biggest successful market entries in its international expansion have been in the Indian and European Markets. The short-term goal for Xiaomi was to reach half of its total revenue from international markets, which it achieved at the closing of 2022 with 49.2% of its revenue being generated overseas.

A pivot toward premiumization as part of Xiaomi’s strategy

Moreover, Xiaomi needs to pivot towards high-end smartphones, to cater towards markets where there’s a growing demand for premium devices above USD 540. Despite being a traditionally price-sensitive market, India is showing a trend towards premiumization. This shift is evident as competitors like Apple are projected to capture a 6% market share by the end of 2023, marking a 34% year-on-year growth. Recognizing this, Xiaomi’s CEO Lei announced on Weibo the company’s plan to enter the high-end market, aiming to outdo Apple in China within three years. To this end, Xiaomi is investing USD 15.7 billion in R&D over the next 5 years, focusing on launching premium products like the Xiaomi 13 Ultra and Xiaomi 13T Pro, and directly positioning them against Apple’s offerings.

Product segment diversification

Finally, Xiaomi should continue to diversify its product line by expanding into promising consumer electronics segments. Its venture into IoT and smart home technology is a key example. As a leading IoT brand with over 230 million devices worldwide, Xiaomi is ambitiously positioning itself as a hub for IoT technology. It offers a range of interconnected smart home products, like Smart LEDs, fitness trackers, and smart TVs, all controlled via WiFi and managed through its voice recognition assistant, XiaoAi (小爱). Another key area of expansion for Xiaomi is the smart electric vehicle (EV) market. The company has announced plans to invest RMB 3.3 billion in this sector, aiming to become an industry leader in Smart EVs by 2024. team of 500 professionals has already been assembled to deploy 140 testing vehicles for this initiative.

What can be learned from Xiaomi’s strategies?

• Xiaomi rapidly evolved from a startup to a global tech leader and smartphone manufacturer by relentlessly following its motto consisting of offering high-quality and yet affordable technology.
• The company diversified its product line beyond smartphones, achieving success in various consumer electronics and through its Mi Market e-commerce platform.
• Xiaomi’s business model emphasizes cost-effective manufacturing, customer engagement, and a unique pricing strategy to bolster sales and ecosystem integration.
• The strategic leveraging of social media and CEO Lei Jun’s leadership played a crucial role in Xiaomi’s brand development and customer loyalty.
• Facing competition, Xiaomi’s future adaptation needs to rest on further international expansion, entering the high-end smartphone market, and investing in new ventures like IoT and electric vehicles.

This article Xiaomi uncovered: the strategic moves powering a global tech brand is the first one to appear on Daxue Consulting - Market Research and Consulting China.

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According to the statistics from 2021, more than 80% of brands collaborated with another brand on a co-branded product or campaign at least once. This phenomenon is more than just a blend of logos; it’s about creating something novel and captivating that challenges the norms of branding. It’s this adventurous spirit and the pursuit of uniqueness that make co-branding especially popular and successful in the Chinese luxury market.

In this article, we’ll dive into the reasons behind the surge in co-branding, and the various creative forms it takes, and highlight some of the most intriguing and successful campaigns that have sparked consumer interest and admiration.

What is Co-Branding?

Co-branding is a marketing strategy where two or more brands collaborate to create a product or service that combines their strengths and appeals to a wider audience. This approach allows brands to leverage each other’s reputation and customer base, creating unique offerings that stand out in the market.

Why is co-branding such a popular marketing strategy in the Chinese market?

In China, co-branding began to gain popularity in the 1990s. The nation’s rapid economic growth and the rise of a consumer culture open to new and innovative brand collaborations fuelled this trend. Brands, both local and international, saw this as an opportunity to explore creative partnerships and connect with Chinese consumers in novel ways.

With time, the forms of cooperative marketing evolved, developing from simple product-bundled sales to co-branding of various forms. Luxury local and international brands engage in co-branding collaborations to infuse their offerings with additional layers of exclusivity and uniqueness. Unlike mass-market brands, luxury brands thrive on maintaining a certain allure and rarity that resonates with their high-end clientele.

By partnering with other luxury entities or selectively with non-luxury brands that offer a certain cachet or cultural significance (and have an entirely different or the same target audience), luxury brands can craft limited-edition products and experiences that can’t be easily replicated. This not only reinforces their brand visibility and image but also creates a buzz that can attract both existing luxury consumers and aspirational customers. Compared with fighting alone, a co-branding initiative can beat competitors and grab a larger market share. It has a mutually beneficial and win-win result.

The win-win strategy to grab a larger market share

Apart from the reasons mentioned above, co-branding is a win-win situation for all engaged parties, helping in areas such as branding, consumer acquisition and product development;

Raising perceived brand value

Luxury brands embody prestige and high value, making them attractive partners for collaborations. When other brands team up with luxury names, their main goal is often to elevate their own brand image by associating with the luxury brand’s esteemed reputation. This strategy not only boosts their perceived value but also opens doors to a more upscale audience, enriching their brand story with elements of luxury, craftsmanship, and exclusivity.

Re-shaping brand image

Luxury brands, through collaboration, can weave in their partners’ fresh perspectives, such as youthful energy or a deep-rooted understanding of Chinese cultural nuances, enriching their brand narrative and broadening appeal.

Showcasing brand values

Co-branding can highlight values like sustainability, charity, and cultural heritage, which resonate well in markets such as China, offering brands a platform to align with meaningful causes and deepen consumer engagement.

Gaining validity in a new market

Co-branding is not only for well-known brands. A good co-branding cooperation with a reputable brand can greatly kick-start a new brand in the Chinese market.

Tapping into a new consumer base

Luxury brands often engage in co-branding collaborations ‘out of their comfort zone’, meaning that they are trying to reach new audiences by gaining awareness among their partner’s consumers/audience. This is why many luxury brands collaborate with young Key Opinion Leaders, video games etc.

Expanding services provided

Rather than expanding their offerings by adding new services in-house, brands can strategically form partnerships with organizations that are already experts in those areas. This approach allows brands to broaden their portfolio and enhance customer value without the need for significant internal investment or development, tapping into the established expertise and infrastructure of their partners.

Injecting inspiration into R&D

Collaborating on product development can inject new ideas into research and development processes, leading to innovative, limited-edition designs that stand out in the market.

Different Types of Co-Branding Methods Often Used by Luxury Brands

In recent years luxury brands have been finding new and intriguing collaboration methods and co-branding strategies, winning audiences with unique, often controversial approaches to marketing and branding. There are many methods currently used by brands, and some of the ones used the most by luxury brands in China include:

Co manufacturing

The final product of such a co-branding strategy is a new item that uses elements from both brands. Usually, those exciting co-branded products are very sensory-focused, especially in China, where consumers are very welcoming to exotic combinations.

This type of co-branding requires a more complicated research and development process, but it has a high buzz and ROI potential. Yet, with such an investment of time and resources, there also comes a big risk, so it’s important to thoroughly research the market and prepare for the campaign with the co-branding partner.

Co-manufacturing was leveraged by Valentino in a recent collaboration with Venchi and Cova. Valentino was promoting its iconic pink PP colour through collaborations with Cova, offering a Pink PP-themed afternoon tea set exclusively at its Plaza 66 store in Shanghai, and with Vinchi for a Pink PP-themed pitaya-flavoured ice cream available at 43 boutiques in China.

The campaign was a huge success, resulting in over 162,000 views of the #SweetVCollab hashtag on Weibo. Valentino crafted an exclusive and limited-time experience through a cross-category collaboration, providing a unique and premium offering, which raised the brand’s perceived value among the Chinese audience.

Inspired by Valentino’s signature “pitaya pink,” Venchi crafted a new gelato flavor in the natural hues of pitaya, source: Facebook

Design co-branding

This type of co-branding is very popular in all kinds of brands, starting from fashion, through anime, and furniture, to food and drinks. A brand interested in creating a unique product seeks the expertise of another brand for design, incorporating its elements or techniques. In China, this type of co-branding is often centred around traditional culture, nostalgia or ACG.

Design co-branding is another more elaborate and complicated co-branding method, it comes with great risk but is also the most rewarding in terms of buzz and ROI potential. Design co-branding is one of the most favoured co-branding strategies by luxury brands in China.

One of the great examples of this method was a loud collaboration between Louis Vuitton, Manner, Metal Hands and PlusOne. LV opened three pop-up bookstores in collaboration with local Chinese brands; Manner, Metal Hands and PlusOne, where each store featured a unique colored theme.

The campaign sparked a collectibles craze among Chinese consumers, offering a complimentary Canvas bag exclusively with the purchase of at least 2 LV city guides, each starting at RMB 290. The hashtag #LVShanghaiBookstoreCanvasBag garnered 140M views on Weibo.

The whole campaign helped Louis Vuitton reshape its brand image, enhancing its association with lifestyle and consumer engagement. The brand also tapped into a new consumer base, creating a craving for the brand among middle-income Gen Z consumers, extending beyond the high-income demographics.

Complementary co-branding

In this method, brands use their services or products to complement the product or service of another. In China, these collaborations are often more adventurous in crossing industry borders.

Complementary co-branding is not as risky as co-manufacturing and design co-branding, it also involves lower R&D effort but has a smaller buzz potential, yet often brings good ROI.

Value signalling co-branding

In value signaling co-branding the focus is not a new product created but an emphasis on the brands’ shared value. This type of co-branding method is often used with charities, which differ in form from the West; they are more focused on culture, arts, and wildlife preservation.

This method is low in risk, but also has a very low ROI potential, with slightly better BUZZ potential. Yet, is one of the methods most often used by luxury brands in China.

One such collaboration was carried out by Louis Vuitton with the Shanghai lifestyle. The brand’s “Nóng Hó, Shanghai” pop-up at Fotografiska Shanghai Museum (Oct 12 to Nov 12) embodied the city’s culture with curated collections, including the latest LV City Guide Shanghai edition.

The event, named in the local dialect, captured the essence of being Shanghainese, attracting many young Chinese consumers with this strategic collaboration. Source: Louis Vuitton

Throughout the month-long event, LV engaged audiences through offline activities, such as book clubs, cultural talks, and children’s workshops. Concurrently, the brand introduced its first Chinese podcast series, “Louis Vuitton [EXTENDED],” on Xiaoyuzhou (小宇宙), exploring topics like Shanghainese street breakfast and the transformation of the Suzhou River area.

The campaign helped reshape the brand image by positioning LV as not just a luxury fashion label but also a cultural and lifestyle curator. It was also a great way to showcase brand value, deepening LV’s ties with Shanghai luxury consumers and redefining the essence of being Shanghainese. It generated a very high buzz on media and social media, engaging a lot of consumers, and at the same time being very low in risks involved.

Sponsorship co-branding

Sponsorship co-branding happens when one brand supplies resources for another brand, oftentimes an event, in exchange for brand awareness. This situation often happens with government events and brands need to build stronger relationships with event organizers.

Promotional co-branding

Promotional co-branding campaigns happen very often, as it’s a win-win situation for both brands, who release a campaign or promotion together, benefiting from each other’s buzz.

When it comes to China, promotional co-branding previously was dominated by celebrity co-branding which is now high-risk due to many celebrity and influencer scandals in recent years. Today, luxury brands are moving towards virtual influencers and organizations.

Promotional co-branding is one of the most favoured methods by luxury brands, as it has a big buzz and ROI potential and a smaller risk and R&D involved, in comparison to co-manufacturing and design co-branding.

Into the co-branding hype:

• Luxury co-branding in China involves innovative partnerships across diverse sectors, including fashion and ACG.
• Over 80% of brands have participated in co-branding, driven by a quest for uniqueness and popularity in the luxury market.
• Co-branding benefits include enhanced branding, expanded consumer reach, and creative product development.
• Collaborations allow brands to combine strengths, increasing perceived value and injecting fresh perspectives.
• Co-branding emphasizes shared values like sustainability, appealing to consumers’ values.
• Various methods, from co-manufacturing to promotional co-branding, each present unique advantages and challenges.
• Successful campaigns, such as Valentino’s Pink PP-themed collaborations, demonstrate co-branding’s ability to transform brand images and attract new audiences.

Download Our China’s Luxury Market in 2024 Report

Together with VO2 Asia Pacific, Daxue Consulting team created an insightful report on the state of the luxury market in China in 2024. Inside, apart from co-branding techniques and examples of great co-branding collaboration from the recent year, we gathered the newest data and market insights on:

• The current state of China’s luxury market
• Trends and new challenges for luxury brands
• Omnichannel strategies used by brands in China
• CRM regulations and implementation in the luxury landscape

If you’re eager to explore further the co-branding topic or would like to deep-dive into China’s luxury market in 2024, download our report below:

This article Luxury Co-Branding in China: High-End Brands Take Collaborations to the Next Level is the first one to appear on Daxue Consulting - Market Research and Consulting China.

During the first two decades of the People’s Republic of China (PRC), the Northeast transitioned into the country’s industrial hub, primarily focusing on heavy industry. However, as the nation shifted from heavy to light industry during the reform and opening-up era, the region underwent a significant transformation. This shift marked the beginning of challenges for Northeast China— economic growth slowed, residents migrated southward, birth rates declined, reforms lagged, and innovation became scarce.

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Nevertheless, there is renewed hope for comprehensive revitalization in the Northeast, and signs suggest that a new era of rejuvenation is on the horizon. Notably, during 2023 Q1, the added value of large-scale industries in Liaoning and Jilin witnessed a year-on-year increase of 5.3% and 5.7%, respectively, surpassing the national average by 1.5 and 1.9 percentage points.

Northeast Renaissance: Cultural reawakening in Dongbei

The term “Northeast Renaissance” (东北文艺复兴) gained prominence through Gem, a rapper from the Northeast, who rose to fame with the intentionally nostalgic hit “Yelang Disco” in 2019. This cultural resurgence extends beyond music, challenging historical perceptions of the Northeast as a cultural backwater and an industrial decline zone.

Comedians like Li Xueqin and Wang Jianguo, as well as writers such as Shuang Xuetao, Ban Yu, and Zheng Zhi, play a crucial role in the Northeast Renaissance. The TV series “The Long Season” (漫长的季节), hailed as one of the standout shows of 2023, is set in Northeast China and has been instrumental in transforming the region’s dilapidated chimneys, abandoned dance halls, and desolate ice rinks into symbols of alternative coolness.

This cultural reawakening has sparked a growing interest in Dongbei culture and products, reflecting a broader appreciation for the unique and often overlooked aspects of the region. For instance, the Dongbei floral cotton-padded jackets (花棉袄) became a craze in December 2023, especially praised for their value for money. Originally popular in rural areas 40 years ago, these jackets feature classic floral patterns, offering warmth, affordability, and vibrant colors. This trend resulted in record-breaking sales for businesses specializing in floral cotton-padded jackets. According to data from the Alibaba-owned B2B platform 1688, between November 1 and December 12 in 2023, the daily average search volume for floral cotton-padded jackets increased by 163%, and the number of buyers increased by 49%.

From “rust belt” to tourist magnet

In addition to this cultural revival, Chinese Northeastern provinces are seeking an alternative growth model post the crisis in heavy industry with tourism emerging as a prominent option. After overcoming the pandemic, Chinese consumers have restarted traveling, propelling the growth of the tourism sector.

Harbin: from industrial hub to tourist destination

Harbin is rapidly gaining popularity as a renowned tourist destination, evident in the record-breaking statistics from the Harbin Municipal Culture, Radio, Television, and Tourism Bureau. During the New Year’s holiday in 2024, the city welcomed an impressive 3.05 million tourists, generating a substantial total tourism revenue of RMB 5.9 billion. Remarkably, these figures surpass Sanya‘s figures for the same period by more than fivefold. Sanya, known for its tropical climate, was traditionally a popular winter destination. However, the recent surge in tourism to Harbin suggests a changing trend, drawing attention to the growing appeal of cold-weather experiences over the traditionally warmer options like Sanya.

The enthusiasm for ice and snow tourism is reflected by platforms like Xiaohongshu, with over 4 million posts related to skiing, and the hashtag “skiing（滑雪）” accumulating an impressive 2 billion views as of January 2024.

This surge in popularity for Harbin is not only impacting the city itself but also extending its influence to nearby destinations like Changbai Mountain and Yanji. Capitalizing on this trend, Harbin is actively implementing enhancements tailored to attract tourists from other provinces. In particular, the city is adapting traditional recipes to the tastes of Southern travelers.

Years of preparation behind Northeast China’s winter tourism boom

The surge in Harbin’s popularity as a tourist destination doesn’t come out of nowhere; it is the result of meticulous work spanning two decades. Despite the Northeast region’s historically tepid growth in tourism, it possesses abundant tourism resources. The recent shift in preferences is influenced by changing consumer behaviors, with a heightened desire for outdoor activities after the pandemic and an increased appreciation for natural destinations.

During the winter of 2023-2024, Harbin’s ice and snow tourism rapidly gained prominence on major domestic online platforms and captured mainstream media headlines. The city made extensive use of social media to create buzz and go viral. From the initial rap videos promoting Harbin to the emergence of internet buzzwords like “尔滨” (Erbin) and “滨子” (Binzi), which are nicknames for Harbin (in Chinese 哈尔滨， Haerbin), these trends are intricately linked to the amplifying effect of social platforms.

Harbin’s newfound prominence isn’t solely attributed to creative initiatives by city tourism officials. The head of the tourism bureau actively participated on social media, soliciting public opinions to optimize tourism facilities and enhance visitor experiences. This dynamic interaction between government officials, citizens, and relevant department heads vividly illustrates the evolution of social media, transcending its role of promoting city images to become a potent medium for interactive communication between the government and the public.

Spillover of Harbin’s popularity to other cities in Chinese Dongbei

When travelers explore Dongbei, they typically prefer extended journeys that encompass multiple destinations, fueling the popularity of 2-4-day tours. Therefore, tourists tend to venture beyond Harbin and explore other captivating destinations within the region.

The impact of the Harbin phenomenon is rippling, drawing attention to the neighboring northeastern provinces of Jilin and Liaoning, both of which are also undergoing a surge in tourism. In 2023, Liaoning Province embarked on the inaugural year of the “Three-year Action for comprehensive revitalization.” During the first quarter of 2023, Shenyang (provincial capital of Liaoning) witnessed an impressive 18% year-on-year growth in industrial added value, securing the top position among sub-provincial cities with a notable GDP growth rate of 6.6%.

When it comes to Shenyang, numerous local attractions draw tourists to visit. These include historical landmarks like the Shenyang imperial palace, snack and commercial streets, and bustling night markets offering a glimpse into the city’s vibrant nightlife culture.

On January 4, a resident of Shenyang took to social media to suggest the introduction of luggage storage facilities at the morning market, inspired by similar services in Harbin. The following day, the director of the Shenyang Municipal Cultural Tourism Bureau confirmed the adoption of the suggestion and announced the implementation of the service at the market. This exemplifies how tourists, through social media, can efficiently provide feedback and recommendations to local authorities, leading to prompt problem-solving—a commendable form of interactive engagement.

The rise of the ice and snow economy in Northeast China

In 2003, the Chinese government issued the “Revitalization Strategy for Northeastern and Other Old Industrial Bases.” Symposiums in 2018 and 2023 shifted focus to comprehensive revitalization. In 2023, marking the 20th anniversary, the emphasis is on developing the ice and snow economy, and promoting sports, culture, equipment, and tourism in the region.

In recent years, the Northeast region has actively pursued the development of an ice and snow economy, strategically planning and implementing various projects. Since 2016, Jilin Province has embarked on ambitious initiatives, such as constructing world-class ski resorts, premier skating halls, and an alpine extreme skiing challenge experience resort. Iconic events like the Ice and Snow Tourism Festival in Harbin, the Rime Ice and Snow Festival in Jilin City, and the Chagan Lake Ice and Snow Fishing have further solidified the region’s reputation as a premier destination for ice and snow activities.

This burgeoning industry not only enhances the Northeast’s appeal but also brings substantial economic benefits, generating significant purchase orders for ice and snow-related products and services. Moreover, it fosters collaboration among businesses, local governments, and tourism organizations, driving economic growth and development in the region.

Dongbei Renaissance: unveiling Northeast China’s potential

• The Northeast region of China, once the country’s industrial hub, is now undergoing a revitalization phase.
• The burgeoning ice and snow economy in the region signifies a growing market for winter sports, equipment, and tourism ventures.
• Cultural resurgence in Dongbei fosters a renewed interest in regional culture and products, offering potential avenues for collaboration and consumer engagement.
• Harbin’s transition into a vibrant tourist destination underscores the evolving appeal and unique offerings of the region.
• Collaborative initiatives among businesses, local authorities, and tourism entities in Northeast China create an environment conducive to growth and development opportunities.

This article Dongbei Renaissance: from industrial decline to cultural and economic renewal is the first one to appear on Daxue Consulting - Market Research and Consulting China.