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As China’s economic landscape evolves, so too do its consumers—and the brands they choose to trust. A new index by Peking University with support from Alibaba’s Taobao and Tmall Group, the China Online Consumer Brand Index, sheds light on the behaviours shaping the future of retail in the world’s second-largest economy.
The index reveals Chinese consumers’ growing preference for branded quality goods despite economic headwinds, while also highlighting the winning strategies adopted by top brands in China’s dynamic and ever-changing consumption landscape.
Drawing from the top-performing brands in the study, here are the three key insights for brands seeking to resonate with discerning Chinese consumers. First, Chinese consumers increasingly value proven utility and effectiveness over brand prestige alone. Secondly, brands excelling in dynamic sectors swiftly adapt to evolving consumer preferences. And thirdly, in highly competitive sectors, carving out a niche to innovate is key.
Here are the three key insights in more detail.
Efficacy trumps prestige
Chinese consumers are increasingly prioritising utility and proven results over brand prestige alone. In beauty, the rise of functional skincare reflects this preferential shift, with brands like SkinCeuticals quickly catching up to their established competitors.
The US-based brand SkinCeuticals has established itself as a science-driven brand, particularly appealing to high-income millennials who understand medical aesthetics. Its flagship Phyto Corrective serum was the top-selling serum during last year's 11.11 Global Shopping Festival, driving double-digit growth for the brand on Tmall over the past two years. In response to increasing consumer demand for anti-aging products, SkinCeuticals launched A.G.E cream, which became the best-selling premium cream on Tmall during the same event.
By partnering with dermatology professionals and clinical institutions, SkinCeuticals effectively built a strong foundation of trust and credibility, leveraging expert voices to enhance its influence among consumers.
Agility wins in fast-moving sectors
In dynamic markets, adaptability is the ultimate advantage.
In the pet market, for example, local brands are outpacing their international competitors and winning over pet owners who prioritise their pets’ health and wellness with health-focused offerings. While French brand Royal Canin maintains its top ranking, six out of the seven top spots are claimed by homegrown players.
ROSY FRESH, ranked fourth, excels with its innovative method of using low-temperature baking and freeze-drying to preserve the nutritional value of its products, quickly becoming a favourite among health-conscious pet owners since its launch in 2017.
In collectibles, POP MART and Jellycat rank first and fifth respectively, and have gained immense popularity through unique character IP and personalisation, tapping into young consumers' desire for joy and self-expression.
POP MART, in particular, has adopted a novel approach by featuring unique IP characters like Molly and Labubu that are designed without predefined narratives, opening up space for dialogue that forges emotional connections with consumers. Complemented by the excitement of blind box purchases and limited editions, POP MART’s strategy of creating versatile, narrative-free characters fosters deep consumer engagement, fueling impressive growth, with total revenue nearing $1.8 billion in 2024.
Niche is the new scale
In established product categories, brands can succeed by going beyond industry norms and creating unique customer propositions. Looking at the fastest-growing 100 brands by GMV on the top brands list, nearly 40% of them are able to command leadership in a niche market segment.
Laopu Gold, ranked second in the jewellery category, has disrupted China’s gold market by moving from traditional weight-based pricing to artisanal ‘by the piece’ collections. This shift has enhanced its brand perception to align with global luxury standards, positioning the brand as a symbol of style and sophistication rather than mere value. With a selective network of 36 offline stores in prime locations across Chinese cities and a Tmall flagship store, the brand reinforced its premium positioning while ensuring access to a broader digital consumer base.
Additionally, the jeweller also facilitated a stable secondary market, helping maintain the after-sale value of its products. Through innovative product design, pricing strategies, and a refined brand experience, Laopu Gold has successfully elevated its status—demonstrating how brands can redefine their niche segment to align with evolving consumer expectations.
The bigger picture: Opportunities for agile brands
The China Online Consumer Brand Index offers more than just trend-spotting. By tracking nine consecutive quarters of consumer spend across brand equity tiers, it presents a new lens on macro sentiment among consumers with indicators such as retail sales and consumer price index. It evaluates brands based on brand awareness, brand novelty, customer loyalty, and customer satisfaction.
With these insights, it’s clear that China’s consumers are not trading down—they’re trading smarter. For brands, the road ahead lies in agility, authenticity, and the ability to carve a distinct space in an increasingly sophisticated market.
China Online Consumer Brand Index (CBI) Quarterly Results
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