Performance advertising continues to gain traction in Asia-Pacific, with AI, retail media, and video attracting a growing share of budgets. But uneven consumer demand and macroeconomic pressures are producing increasingly divergent market outlooks.

Advertisers in China lean on AI to maximize performance

China's digital advertising market will grow 7.5% to $161.84 billion in 2026—down from 8.7% in 2025—accounting for 86.6% of total media ad spending. In a weak retail environment, advertisers are concentrating spending on channels that deliver measurable performance and ROI, particularly social commerce and AI-enabled platforms. Retail media remains a key performance channel, but growth is moderating. Spending will increase by 7.6% to $81.17 billion in 2026—down from 11.6% in 2025, as weak consumer demand, ecommerce price competition, and merchant margin pressure constrain advertising investment.

With budgets under pressure, advertisers are using AI to improve planning, optimization, and targeting. Platforms that combine AI with first-party data and commerce capabilities are benefiting. For example, Tencent continues growing its share of digital ad spend through its closed-loop AI-powered ecosystem, including WeChat and the underlying video channels and Mini Programs. Douyin also remains a leading advertising platform, supported by short video engagement, native commerce/livestreaming, and algorithmic discovery. In contrast, Kuaishou has sustained digital ad growth through AI investment but has not gained meaningful market share amid weaker ecommerce and livestreaming performances.

Click here to view the full forecast for China retail media ad spending.