The news: China’s economic malaise deepened in November.

• Retail sales rose just 1.3% YoY, well below analysts’ median forecast for 2.8% growth, despite blockbuster Singles Day promotions.
• Investment and industrial output also fell short of expectations, signaling greater caution from businesses and individuals as they grapple with trade and economic uncertainty.

The trend: Chinese consumers are currently finding more reasons to save than spend.

• China’s property crisis shows no signs of improvement. Property investment sank 15.9% YoY in November, while average new and resale home prices also fell. That is severely challenging consumer confidence and buying power in a country where roughly 70% of household wealth is tied up in real estate.
• Fierce price competition among businesses is fueling deflation and weighing on wage growth. The need to slash prices to entice cost-sensitive consumers has hurt profitability across many sectors, forcing companies to lay off workers or reduce salaries to stay operational.

Beijing promised to make consumption recovery a priority for 2026—but similar pledges have produced uneven results. For example, subsidies for specific sectors like autos and appliances helped deliver a short-term boost in retail sales, but such gains have been hard to sustain once the money runs out.

Our recommendations: To succeed in this difficult environment, brands need to:

• Localize marketing and selling strategies. Companies that can show they are in tune with local trends and preferences stand a better chance of winning sales.
• Be competitive on price. Brands that don’t make an effort to adjust prices could find themselves shut out as shoppers search for lower-cost options.
• Invest in experiences. Grand activations like Louis Vuitton’s cruise ship-shaped Shanghai store give shoppers a reason to visit stores and stay engaged.

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