China's economic woes remain daunting, from an ailing property sector to an opaque but presumably heightened level of local government debt, excess industry capacity, and a lukewarm rebound in post-pandemic consumer spending. In March 2024, the government’s annual policy meeting, dubbed “Two Sessions,” announced an ambitious GDP growth target of about 5% and policies supporting fundamental changes to China’s economic makeup—including a pivot to high tech as a growth driver. But notably missing from the announcement was a robust consumer spending stimulus.

Consumers in China are feeling the pinch

Household savings in China hit a record high by the end of 2023 as consumers stashed away for rainy days, data from the People’s Bank of China showed. Moreover, the number of affluent families in China, defined as those with over RMB 6 million of assets, declined by 0.8% in 2023, according to a Hurun Research Institute study cited by the South China Morning Post.

Understandably, consumers in China have generally become more prudent spenders, seeking out products that offer value. So it is no surprise that ecommerce giants have been rolling out eye-popping deals during shopping festivals. Easy product return and exchange have also risen in importance among digital buyers, according to a recent iResearch Consulting Group study.