Nearly half of marketers eyeing budget cuts: Totem China marketing and media trends 2025

Brand and digital agency Totem has unveiled its 10th annual report on China’s marketing and media trends. Conducted in partnership with Campaign Asia-Pacific, the report is based on a survey of marketing leaders from 95 brands. The respondents represent a cross-section of primarily global brands, ranging from large to medium-sized companies, most with over a decade of experience operating in China.

Chris Baker, founder of Totem, summarised, “Despite the widespread negative sentiment, there is a small but growing chorus of optimism that suggests things may have already hit bottom and the economy (and consumer spending) is poised to rebound into 2025 and 2026." 

The annual report team has been analysing Chinese marketing trends for over a decade. The 2025 brand survey highlights significant shifts as the key findings in this latest report:

• The overall environment in China has downshifted from rapid, unfettered growth, to a new paradigm of caution and prudence. Sentiment among brand leaders, over the last few years, has declined considerably. This is the first year of doing this survey where significant planned budget cuts have been noted.

• Marketing and sales success in China remains firmly connected to social commerce routines. Winning brands are experts in cultivating customers on social, rallying audiences to buy, via a potent mix of; influencers, livestreaming, social mini-programs and private traffic tactics.  

• The rift between brand and performance marketing will be stressed again, as companies covet conversion. There will be space for customers to buy the brand they love and trust—even in the face of deep discounting. Brands need to be positioned to have core audiences who love, trust and buy them.

Marketers' outlook for the upcoming year is generally neutral, showing less optimism or negativity compared to the results from 2024. However, an increasing number of marketers plan to reduce their marketing budgets in the coming year, with nearly half of those surveyed indicating this change. This marks the highest rate of budget cuts since 2019, based on the survey data.

Totem’s survey predicts that by 2025, the overall situation will reach a low point before slowly returning to a more normal trend while the middle class continues to hope for better days. As brands concentrate on sales turnover—sometimes at the expense of profit margins—fewer global and Chinese brands will face contraction and consolidation. From a macro perspective, income is expected to replace property as the main driver of consumer confidence.

One-third (33%) of brands surveyed this year believe that the consumer economy in China is "already in recession." In contrast, only 14% of respondents have a positive outlook on the economy. Among the 43% of brands that view the economy as "neutral (flat)," it is reasonable to assume that they have a somewhat negative perspective on the current situation. 

Looking ahead to 2025, a larger share of respondents (83%) hold a neutral to negative outlook, with only 17% of brand managers expressing optimism. While the number of optimistic respondents continues to decline, the percentage of those with a negative view has decreased slightly, from 46% in 2024 to 40% in 2025. 

Additionally, 58% of brands have reported reallocating some attention and resources from China to other markets in Asia. This trend began in the aftermath of Covid and has continued to grow.

The primary marketing priorities for 2025 are sales (conversion), brand awareness, and customer loyalty, as brands increasingly emphasise sales performance.

Overall, marketing budgets in China are facing downward pressure, with 48% of brands planning to reduce their overall budgets for 2025. 

In contrast, digital budgets are trending positively, even as overall budgets are declining. Additionally, social budgets are also expected to increase in 2025. 

Social media and social commerce activities are key drivers of online sales success in China. While 45% of brands anticipate an increase in their digital budgets, 51% plan to boost their social budgets for 2025.

Budget cuts are projected to rise across all areas in 2025, showing a significant increase compared to 2023 and 2024. Agencies and vendors are leading the way in planned budget reductions heading into 2025, with cuts expected to triple compared to 2024. In this context, performance ads and initiatives, as well as influencers, hold up relatively better—initiatives used to drive results—with fewer cuts planned.

Red (Xiaohongshu) leads the way in terms of positive return on investment (ROI) reported by brands in 2024. Alongside Red, Douyin and WeChat are identified as the top channels for branded investment heading into 2025. Red and Douyin have made significant progress in the rankings over the past few years, with Red taking the lead as a preferred channel for the future, followed closely by Douyin. WeChat continues to maintain its position as one of the top three channels for brand performance.

According to the survey results, Totem predicts 25 key considerations for 2025,  including middle class under pressure, Hong Kong and Macau revivals, luxury brands under pressure, GenZ holds the key, and better bet on Red. 

Source: Totem Media