Down 40% vs up 120%: the consumer leader's tale of two extremes

A milestone masked by sharp winners and losers

China’s retail market crossed a symbolic threshold in 2025: total retail sales of consumer goods topped RMB 50.12 trillion (about $7 trillion), with final consumption contributing 52% to GDP — up five percentage points from a year earlier. It sounds like a recovery. But look closer and you see a market cleaved in two. Some categories and brands surged — double-digit growth, new category leaders and breakout product lines — while others slumped, with some firms reporting year-on-year declines approaching 40%.

Policy played a big role. It has been reported that Beijing deployed RMB 300 billion in ultra-long special sovereign bonds to fund trade-in subsidies for consumer goods, a targeted push that helped trigger double-digit rebounds in home appliances and electronics in the first three quarters. But policy windfalls have not been evenly distributed. In a maturing, highly competitive market, incumbents with deeper brand matrices, superior channel management and product innovation widened their lead. The rest fought over shrinking incremental demand.

Case studies: beverages, condiments, gold and sportswear

Take beverages. Nongfu Spring (农夫山泉) staged a strong rebound, with packaged water revenue up over 12% and tea beverages — now its biggest business — surging 29% to displace rivals. By contrast, China Resources Beverage (华润饮料) saw revenue and net profit fall sharply. Functional drinks were the breakout sub-sector: Eastroc Beverage (东鹏饮料) posted more than 30% revenue growth, with a non-energy “replenishment” line up over 100%. Who won? The nimble and innovative. Who lost? Those stuck in legacy mixes.

The story repeats elsewhere. Condiment leader Haitian (海天味业) sits atop a widening revenue pyramid even as traditional soy sauce volumes slow and compound seasoning products grow rapidly. Gold and jewellery experienced structural upheaval — with some differentiated brands expanding stores even as legacy chains like Lao Fengxiang (老凤祥) and Chow Tai Fook (周大福) closed hundreds — as consumers shift toward investment-grade bars and daily-wear pieces. And in sportswear, Chinese champions such as Anta Sports (安踏体育), Li‑Ning (李宁) and Xtep (特步国际) widened their gap over international names, moving from “catch-up” to genuine global competition.

Outlook: a more selective recovery

So what comes next? China’s consumer market is no longer a single tide that lifts all boats. It’s a selective current that rewards brand portfolios, category agility and channel execution. Geopolitical and trade frictions continue to add uncertainty to supply chains and premium goods demand — a background factor that helps explain shifts toward domestic players and safe‑haven purchases like gold. Will consumers keep trading up into differentiated, higher‑margin products? Or will tighter discretionary spending pull more firms into structural decline? The answer will decide which names join the winners and which become cautionary tales.