The latest entry on the list is interesting: Car factories. Xiaomi, NIO, Xpeng, BMW, and Volkswagen have all opened their production floors to public tours in China — and the demand has been extraordinary. Xiaomi’s lottery-based reservation system saw acceptance rates as low as 0.4%, with scalpers on secondhand platforms reselling spots for thousands of yuan. Parents are driving 60 kilometers in sub-zero temperatures, wishing to let their kids get a first-hand understanding of China’s latest high-tech developments. The factory floors are becoming new classrooms.

But behind the parental enthusiasm lies a sharper story. In one of the most brutally competitive auto markets in the world, Chinese car companies have discovered that opening the factory floor is among the cheapest and most effective marketing tools available. The assembly line becomes a brand experience. The company cafeteria becomes a fond memory. The child who once touched a car part might, one day, grow up to buy that brand.

This piece, originally published by 盐财经 and written by Mo Nai, takes a close look at how China’s auto brands have quietly turned middle-class parenting anxiety into a precision-targeted marketing strategy.

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Below is Baiguan’s translation of the article:

Middle-Class Parents Take Their Kids to Car Factories — and Auto Brands Are Cashing In

By Mo Nai | Source: 盐财经 (Yan Caijing)

The holidays are here, and China’s anxious middle-class parents are converging on a shared destination for ‘educational enrichment’: the Chinese factory.

Milk plants where kids witness pasteurization and try their hand at milking. Beer factories where cans roll past on conveyor belts and visitors sample complimentary fresh draught. Beverage and bakery plants that satisfy both the visual and the edible.

But among all factory tours, none has proven more popular than the car factory.

Gleaming, brightly lit modern workshops. Robotic arms in seamless coordination. The sweep and arc of enormous gantry cranes. Words like ‘mechanization’ and ‘automation’ have elevated the humble factory floor several tiers up the parental status ladder.

Xiaomi, NIO, Xpeng, BMW Brilliance, and Volkswagen have all opened factory tour programs, allowing regular visitors to walk through designated production areas.

Compared with the old ways of taking kids camping in the park or visiting amusement parks, the latest trend in outings is to head to a car factory for a full tech-education experience. That said, getting a free ticket for the tour isn’t exactly easy.

For instance, Xiaomi operates a randomized lottery system for its factory tours. At one point, the acceptance rate for a single session dipped to just 0.4%. On secondhand platforms, scalpers were flipping reserved spots for thousands of yuan — and still couldn’t keep up with demand.

Xie Lei lives far from the factory, but told Yan Caijing she was lucky — she got in on her very first attempt. Last October, she drove nearly 60 kilometers with her son. ‘He’s really into cars, and watching the production line blew his mind. But honestly, what he remembered most was the cars in the showroom,’ she said.

There are many parents just like Xie Lei.

More importantly, this isn’t just an urgent need for parents—it’s also a clear indication that car brands understand China’s middle-class families inside out.

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Parents focused on education are being targeted by scalpers

“I was amazed to see so many robotic arms working together in such an orderly way,” said Li Qinqin after visiting Xiaomi’s factory.

Her family of three won the lottery for a visit in January 2026. At the time, temperatures in Beijing were below minus ten degrees Celsius, but she told Yan Caijing that the chill was “totally worth it.”

“When I was a child, we didn’t have the chance to visit factories. Now I can learn alongside my own child,” Li Qinqin said. During the visit, her family even sampled trendy treats like yogurt-coated mahua (fried dough twists) in the cafeteria. The whole experience, she added, was “fun for the kids and beneficial for their physical and mental development from an educational perspective.”

According to publicly available information, the typical factory visit process goes like this: touring the showroom, walking through the production line, participating in test drives, and finally doing DIY car models or making souvenirs. Some companies even open their cafeterias for visitors to sample meals.

In fact, most factory tours follow a similar schedule with relatively fixed content. But with the packaging by educational institutions and intermediaries, these visits have become part of spring or weekend study programs. After the visit, students often receive certificates, “guiding them to understand innovation and craftsmanship.”

With the emphasis on mechanical and technological terminology, parental expectations are rising. Middle-class parents often say, “Our children have been interested in cars from an early age,” and taking them to a frontline production line is undoubtedly the closest path to realizing that dream. Checking into showrooms and company cafeterias has become a must-share experience on social media.

Xie Lei and Li Qinqin are part of this factory-visit trend, and their shared trait is luck—they only needed one or two attempts to win a free spot in the lottery.

On the market, most factory tours have a clear price. For example, one educational intermediary lists a visit to Guangzhou Dongfeng Nissan’s factory at 318 yuan for one adult and one child, with an additional 200 yuan for each extra child. Some companies allow owners to redeem points via an app for visit privileges, such as NIO.

The most popular factory visit is Xiaomi’s.

Since Lei Jun (Xiaomi’s CEO) announced in January last year that the car factory would open for public bookings, slots have been in high demand. Initially, Xiaomi only offered tours about ten days per month, but as popularity grew, a session limited to 20 participants attracted 4,600 applicants. Xiaomi then gradually increased the number of sessions. Data shows that last year, the Yizhuang factory (Beijing) hosted 130,000 visitors for tours and experiences.

Currently, Xiaomi’s booking page shows 27 days open for visits in March 2026. Even with more sessions, securing a slot requires booking at least a week in advance.

Visiting a car factory has become a “knowledgeable” alternative to amusement parks or historical towns, serving as premium social media content for middle-class families. The scarcity of tickets has turned them into social currency, giving rise to a scalper market.

Since the opening of public bookings, scalpers selling tickets are easy to find. Yan Caijing reporters found second-hand platforms where tickets for a specific date were priced from 100 to 1,000 yuan, with sellers insisting “no discounts.”

Not all factory visits have been universally praised.

Xie Lei told Yan Caijing that her experience had flaws. “The main issue is that factories are usually in remote locations. Although it’s educational, the actual content is limited, and travel takes up too much time. If these parent-child factory trips could combine tours with hands-on activities and nearby amusement options, that would be ideal.”

She also noted the cost: “Comprehensive factory trips are expensive, and for what you get, the value isn’t always high. Xiaomi’s tours, being free, are short and limited in activities.”

Amid expectations and fantasies, China’s middle-class parents are embarking on a “tech journey” that is, in essence, a high-value educational and social investment.

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Factory tours as marketing

Free lotteries, limited attendance, and deliberate scarcity—car companies have turned factory visits into a phenomenon comparable to securing Spring Festival train tickets. On the surface, it appears to be an educational and social event for families, but in reality, it’s a carefully designed marketing strategy.

Touring the factory—listening to staff, learning brand history, participating in test drives—is similar to visiting a dealership. The goal is the same: to deepen visitors’ understanding of a new brand.

Even if attending families don’t immediately become buyers, seeing cars assembled in person is far more emotionally persuasive than flashy advertising that claims “a car rolls off the line every 57 seconds.” Production lines have become premium-brand advertising at a lower customer-acquisition cost.

On social media, some users reported that a factory visit influenced their choice of next car, while some parents hoped their children would aspire to work in high-tech industries or join new-energy car companies.

The visits are often designed as parent-child trips, making modern factories both educational spaces and experiential environments that inspire dreams, consumption, and decision-making.

International car companies also use factory tours as incentives.

In 2024, Tesla ran two promotions in China: new owners could win a trip to its Fremont factory, including airfare and accommodation, or, through an official trade-in service, visit the Shanghai factory (limited to ten spots). Following the second promotion, Tesla’s December 2024 sales in China rose 12.8% year-on-year, hitting a monthly record.

Selling cars today is no longer just a service—it’s a craft. Opening factory doors aligns with evolving marketing strategies and societal trends. Visiting production lines is no longer a novelty—it’s a way to experience national industrial progress.

At the national level, factory tours have received strong support. The Ministry of Industry and Information Technology proposed creating model industrial tourism bases and routes, integrating industrial heritage and smart factories into regional tourism.

“Industrial tourism” should hold a significant place in China, given that globally it accounts for 10–15% of total tourism revenue, while in China it is less than 5%, showing room for growth.

China’s advantage lies in its comprehensive industrial system. Whereas industrial tourism used to focus on heritage sites, now visitors seek interactive experiences with industrial culture.

On the other hand, factories also create more opportunities to engage directly with consumers.

In fact, the earliest companies to offer factory tours were car manufacturers. After the 1920s, France’s Citroën became the first to invite consumers and visitors into its factories to witness the entire assembly process. At the time, Citroën adopted the assembly line model from the United States’ Ford Motor Company, streamlining production rhythm and efficiency. This novel, live “reality-show” experience greatly satisfied the French public’s curiosity.

Founder André Citroën realized that opening factories to visitors was a powerful marketing tool, turning industrial production into a public spectacle.

If consumers’ interest lies in seeing closed, mysterious workshops, what do car companies seek? They aim to create a system of engagement and communication akin to a private marketing ecosystem.

This sense of novelty encourages users to share, check in, and participate in follow-up activities, capturing the most valuable commodity: consumer attention. Whether through user communities, points redemption with new energy car brands, or group bookings and paid visits with traditional automakers, the common goal is to make consumers feel “this car is relevant to me.”

Today, for new brands and models to stand out, strong product quality alone is no longer enough. Transforming purchasing potential into “emotional value” has become a crucial step for the automotive industry to capture existing market demand.

After visiting a factory, what people remember aren’t dry technical terms, but tangible experiences: “the cafeteria where my child and I ate,” “the car part we touched,” “the assembly line we saw.” These real, sensory interactions directly influence decision-making.

Moreover, families who can send their children to a factory “study tour” are far from ordinary. These families usually have the economic means, time, and educational awareness to invest in their children’s tech education—and are even willing to pay scalpers’ premiums. Their consumption potential and brand loyalty far exceed that of average households.

By opening factories for free, car companies not only precisely target this high-value segment but also create a subtle form of “class-based loyalty.”

(Interviewees’ names have been changed at their request.)

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Many Chinese netizens do jokingly refer to this company as ‘Pop Mart for middle-aged men’ due to its focus on figurines and collectibles, but its business model couldn’t be more different. That said, I promise an interesting look into how Chinese consumers are rediscovering their passion for traditional craftsmanship in today’s post.

There’s a joke that’s been circulating in China for years about the spending hierarchy of Chinese consumers. The rough order goes: women > children > the elderly > pets > men. Specifically, middle-aged men.

The stereotype is fair. Chinese middle-aged men — the ones running companies, managing client relationships, attending business banquets, and bearing the burden of financing the family — tend not to spend on themselves. But their money goes to status, to relationships, to gifts.

So when a company specifically targeting this demographic just went public in Hong Kong, it was worth paying attention to — even if almost nobody did.

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Tong Shi Fu: the copper artisanal products

铜师傅 (Tong Shi Fu, or “Copper Craftmaster” if translated literally, 0664.HK) listed on the Hong Kong Stock Exchange on March 31. The IPO didn’t go well on debut — shares opened down 41% from the offering price of HK$60 and closed down nearly 49%. Not the kind of first day that generates headlines for the right reasons.

But the business itself is interesting. Founded in 2013 in Hangzhou, Tong Shi Fu is China’s largest copper cultural and creative products company. It makes copper figurines, desk ornaments, and decorative pieces — the kind of objects you’d find on the desk of a Chinese business owner, displayed in a meeting room, or held in the palm of a hand as a fidget toy. Revenue hit around 570 million yuan in 2024, with gross margins of 35%.

Both Shunwei Capital and Xiaomi (through its subsidiary Tianjin Jinmi) are shareholders, together holding over 22% of the company. Interestingly, Xiaomi’s CEO Lei Jun personally backed Tong Shi Fu as far back as 2017 with a 110 million yuan Series A, followed by a 310 million yuan Series B in 2018. He called it “the enterprise most like Xiaomi outside the entire Xiaomi ecosystem” — which, if you know how Lei Jun thinks about brand-building and product positioning, is a genuine compliment.

In a way, the comparison makes sense. Like Xiaomi in its early days consolidated many white-label brands, Tong Shi Fu took a traditional category dominated by anonymous workshops, applied design thinking, built a recognizable brand, and used e-commerce to reach a national audience (In 2024, online sales accounted for 76.7% of its revenue!)

The Commercialization of Craft

The rise of Tong Shi Fu doesn’t make sense without the broader backdrop.

Over the past few years, the revival of Chinese traditional culture and craftsmanship has been one of the most consistent undercurrents in China’s consumer market — and it’s getting more commercial. We’ve been covering different facets of this story since 2023.

Take Laopu Gold**,** for example. I’ve previously discussed how their success stems from a return to “ancient gold” techniques, tapping into gold’s deep-rooted status as a cultural symbol in China. But there is an ongoing debate: Is Laopu’s hype driven by genuine craftsmanship or simply by gold’s value-retaining properties amidst skyrocketing prices?

Laopu’s commercial success was indeed significantly supported by gold’s dramatic price appreciation in recent years. But Tong Shi Fu probably represents the other side of the coin. Copper artifacts also possess a significant cultural legacy and a devoted (albeit niche) collector base. Unlike gold, the appeal here isn’t financial hedging; it’s pure appreciation of the craft.

Bridging old and new

The brand is not just selling traditional copper crafts; it is actively trying to make them speak to contemporary culture.

Some of this happens through homophonic puns. For instance, they offer a collectible shaped like a crab claw (qián 钳) to signal wealth, as the word for “claw” sounds like the word for “money” (qián 钱) in Chinese. Another piece is shaped like a bun (bāo 包) and is titled “Guaranteed Success,” since bao also means “guarantee” in Chinese. These puns land immediately with the target consumer.

The company has also aggressively pursued IP licensing—the high-growth business model followed by companies like Pop Mart and Miniso. They have released figurines featuring characters from the blockbuster animated film Ne Zha 2, Dunhuang cultural motifs, and even Captain America. Although these IP-driven products are not yet the core revenue drivers, they signal a deliberate push to reach younger consumers and expand the brand's cultural range beyond traditional gifting.

In this sense, copper artisan products are undergoing a journey very similar to Laopu Gold’s: taking something that once felt old-fashioned or niche and finding a way to make it resonate with modern aesthetics. (For a long time before Laopu Gold went viral, it was common for young Chinese consumers to view gold jewelry as unfashionable—something only an “elderly auntie” would wear).

Gift giving—The “necessity” for the middle-aged man

Interestingly, copper products have captured an essential demand among middle-aged men: the need for gifting.

For instance, nearly all of Tong Shi Fu’s top-selling SKUs are variations of the Ma Dao Cheng Gong (meaning “success upon arrival” in Chinese) or Ma Shang You Qian (money upon arrival) desktop copper horse. It is widely considered a foolproof choice for anyone looking to impress a client or business partner—particularly those who are middle-aged.

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For many Chinese men in that demographic, this aesthetic is practically universal: it is grand and perhaps a bit cheesy, yet it successfully signals wealth and social status through puns and auspicious animal symbols. (Horses, deer, and gourds all remain staple choices in Chinese gifting culture.)

At the higher end of the spectrum sits Zhu Bingren Copper (朱炳仁·铜). Also based in Hangzhou, it is a more premium brand targeting a similar demographic and gifting scenario, but with more elevated positioning.

Zhu Bingren is one of China’s most celebrated copper artisans—a “National Intangible Cultural Heritage” inheritor whose work has been presented as state gifts to foreign dignitaries. Compared to Tong Shi Fu, which targets the mass market, Zhu Bingren tends to create more traditionally inspired symbols and totemic pieces. These can feel less “trendy” and more “old-fashioned,” but they are undeniably grander and, naturally, command a much higher price point.

The brand now operates over 230 stores across mainland China and recently opened its first overseas location in Singapore. Reportedly, the company is also in the process of pursuing an IPO on the Beijing Stock Exchange.

While these two copper artisan brands target different customer segments, they are riding the same underlying current: the professionalization of Chinese heritage.

Branding: the opportunity for Chinese artisan products

Despite the abundance of traditional craftsmanship in China, the level of brand development in this space has historically been very poor. Most great craftsmanship is sold anonymously — from family workshops, or by artisans working in obscure side streets with no storytelling, no national distribution, no scalable identity. Or, at the other side of the spectrum, pieces by masters only circulated within the niche groups without transparent market pricing.

That’s changing.

I believe this shift represents a massive opportunity for both Chinese companies. While I don’t necessarily think a brand like Tong Shi Fu represents a massive TAM on its own, the rise of brands like Laopu Gold and Tong Shi Fu proves that China is successfully commercializing its cultural heritage with more mature brand building and storytelling.

We are also seeing the emergence of ways to “capitalize” on traditional products in the secondary market. While I’m not always certain this is a positive from a purely artistic perspective, from a market standpoint, it means these crafts are gradually becoming truly investable assets.

China possesses hundreds of thousands of distinct forms of craftsmanship. Beyond the few public companies, smaller brands are rising everywhere. Many of these are led by solo founders or young artisans using Xiaohongshu (Red Note) as their primary launchpad. Compared to older-generation artisans, today’s generation has much stronger digital literacy and business sense.

Even among these smaller workshops that haven’t yet caught the eye of big capital, the commercialization is already well underway.

For instance, I’ve been following an artisan named “Xiao Kuan Zhu Gong” (小宽竹工) for several years (whose workshop is also based in Fuyang, Hangzhou! I must say, the atmosphere in Hangzhou—and Zhejiang Province as a whole—has indeed nurtured successful entrepreneurs across every industry).

He is a handicapped artisan who creates beautiful zhubian (bamboo weaving) crafts. He started with no reputation, running his own Xiaohongshu store, but he has always possessed a rare combination of pure craftsmanship and sharp business sense. For instance, he didn’t just sell finished pieces; he launched DIY kits and did an excellent job of branding his personal story and “behind-the-scenes” process to enhance his brand’s value.

He is a prime example of the many, many artisans currently stepping into the spotlight.

Recently, Pop Mart launched a collaboration with him, proving that even for brands that do not specialize in traditional crafts, embracing cultural heritage is no longer optional—it is a strategic necessity.

China has hundreds of thousands of distinct crafts waiting for their "Laopu moment." — the "Cultural China" trade is just getting started!

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That playbook is increasingly running into a wall — specifically, with the segment of consumers that aspirant and luxury brands most want to reach.

China’s educated, high-income urban professional women — especially the 30-to-45-year-old Tier-1 city lawyer, managers, finance director, or entrepreneur — have developed a distinct allergy to the content machine. They haven’t gone offline. They've migrated. And the destination, for a meaningful slice of them, is podcasts.

The fatigue is real

The short-video economy was built on novelty, stimulation, and manufactured aspiration. For a period, it worked extremely well at converting attention to commerce. But novelty has a half-life. By the mid 2020, a growing cohort of Chinese women in their 30s and above — precisely the demographic with real spending power — started describing their experience of Douyin and Xiaohongshu in terms that sounded less like entertainment and more like a utility bill: something they check out of habit, not pleasure.

The platforms haven’t stopped working. But for the most sophisticated consumer segment, they have stopped meaning anything. When everyone is on Xiaohongshu selling a curated version of their life, the feed collapses into a single undifferentiated aesthetic. Buying a bag because you saw it in a 15-second video stops feeling like a considered choice and starts feeling like being manipulated.

This is the demand signal that a handful of Chinese premium brands — earlier and more clearly than international luxury houses — picked up on and acted on.

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Giada: What the urban elite Chinese woman’s role models look like

GIADA is an Italian-founded womenswear brand now owned by the Chinese luxury group Redstone Haute Couture, with price points in the tens of thousands of RMB per garment.

In 2022, rather than doubling down on KOL seeding or live commerce, the brand launched a podcast called Yan Zhong Hua Shu (岩中花述, phonetically similar to “Flower on the Rock” in Chinese) on Xiaoyuzhou FM — China’s premier indie podcast app — with legendary television host Chen Lu Yu as permanent host.

The format is deliberately unhurried. Each episode runs roughly 80 minutes. Lu Yu and a guest — drawn from literature, film, art, theater, and academia — discuss life philosophy, personal history, and what it means to be a woman in contemporary China. Product placement is effectively nonexistent. GIADA is the backdrop, not the subject.

After six seasons and nearly three years on the platform, Yan Zhong Hua Shu has accumulated over 1.07 million subscribers on Xiaoyuzhou — making it the largest branded podcast in the Chinese-speaking world, according to industry tracker JustPod. A single 2024 episode featuring Zhan Qingyun, a law graduate of the Chinese University of Hong Kong and Harvard University and a highly accomplished debater and legal professional, has so far drawn over 2,000,000 plays on Xiaoyuzhou alone.

To understand why this matters commercially: GIADA bypassed conventional celebrity endorsement, live commerce, and algorithmic Xiaohongshu/Douyin seeding. Instead, it built a sustained, high-trust relationship with exactly the demographic it wanted — women who don’t just want to buy a coat, but want to buy into what the brand represents.

Songmont: a different execution, same logic

Songmont — the domestic leather goods brand that went from fifth to first on Tmall’s Singles’ Day bags and accessories chart between 2022 and 2024 — also runs a podcast called Shan Xia Sheng (山下声, “Sound Under the Mountain”) on Xiaoyuzhou FM, with over 142,000 subscribers.

The format is more interview-driven: journalist Zhou Yijun talks with guests such as Li Na (Chinese tennis player), filmmaker Jia Zhangke, and Taiwanese actress Wen Qi. The conversations orbit themes of creativity, strength, and womanhood — not bags.

The podcast is part of a broader content strategy that has made Songmont unusually legible to its target consumer: urban women aged 25–45 with a strong sense of freedom, independence, and ambition who want to be themselves, not defined by societal norms. The podcast is doing something that Douyin ads cannot: building emotional equity.

We covered how Songmont rose from a purely online brand to a formidable player last year:

The Chinese podcast ecosystem they’re betting on

To understand why podcasts have become a viable brand-building vehicle in China, it helps to understand what China’s podcast market actually is — because it looks quite different from the Western model.

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This is an important shift in the fashion statement.

The year 2026 has so far seen a strong rebound in China’s sports and health consumption.

According to Bigone Lab‘s online sales data (across Tmall, JD, Douyin, etc.), the sports and health industry maintained +22% growth in January-February, accelerating from +18% in December and +12% in Q4.

What makes this remarkable is that this growth is entirely organic—no government subsidies, unlike appliances or electronics. Outdoor apparel and footwear have been particularly strong, with outdoor footwear growing 65% and outdoor apparel 47%. Sportswear, in general, showed significant acceleration at +31%, compared to just +5% in Q4.

But it’s not just about sports. A broader “healthy lifestyle” wave is sweeping through Chinese middle-class consumers.

For instance, as I covered previously, the low-sugar trend has become an up-and-coming lifestyle statement that’s trending among urban Chinese.

Apart from no-sugar or low-sugar beverages, over the past three months we’ve seen several interesting, niche yet emerging categories rapidly growing across e-commerce platforms, such as grape seed extracts, taurine food, and weight-loss staples—novelty items marketed to boost metabolism or support overall health.

Chinese consumers are becoming increasingly conscious about what they put into their bodies. Sugar-free beverages, metabolic supplements, and functional foods are no longer niche categories, but lifestyle choices.

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“Athleisure”: the new trending lifestyle

But there’s an even more significant trend beneath the surface: “athleisure” is on the rise.

As we’ve covered since 2023, the “quiet luxury“ and “old-money“ aesthetic has been trending in China. From 2025 onward, this trend has evolved further: China’s “old-money” consumers are increasingly embracing sports, and their attitude toward luxury is shifting—from using brands as status symbols to focusing on how clothing feels on their bodies.

A simple “no-logo” or understated design no longer satisfies the “old-money” consumer. This aesthetic has gradually evolved into a broader lifestyle system, encompassing diet, leisure activities, vacations, and, most importantly, sports and overall health routines.

In urban Chinese cities, it has become common for professionals to wear sportswear four or more days a week. Sportswear is no longer purely functional—it is increasingly what urban professionals choose for social and even work occasions.

As sports leisure (”athleisure”) becomes trendy, more middle-class consumers are upgrading their choices in this category. The sports you practice now say a lot about your personality, taste, and social circles.

In fact, consumers are increasingly adding their own “aesthetic” preferences to professional running shoes and sportswear brands. On Chinese social media, you often see brands like On and Kolon linked with “old money” and athleisure styling—even in non-professional sports scenarios, urban elites are flocking to wear these brands for leisure and commuting.

Interestingly, the keyword “athleisure”—written in English—has been growing particularly fast on Chinese social media, especially Xiaohongshu (Red Note). This is no coincidence: China’s high-income urban elites, often internationally educated and English-proficient, are the leading group driving this lifestyle.

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The big picture: spending by middle-class and affluent consumers is recovering

One telling piece of evidence that China’s affluent consumer base is spending again is the recovery of luxury sales since H2 last year. This recovery trend continued into January and February this year after the Chinese New Year.

According to our offline payment data, most luxury brands posted positive year-on-year growth in January-February, with sequential improvement from Q4.

But Ralph Lauren emerged as the biggest winner, with +88% growth (vs Q4 +47%), significantly outperforming other luxury houses—for instance: Hermès (+13%), Louis Vuitton (+2%), Gucci (-4%), YSL (-5%), Dior (+5%), and Prada Group (+3%).

This is no coincidence. For one, Ralph Lauren not only offers stronger sporty aesthetics and functional designs, but also uses more skin-friendly fabrics like cotton, making it a brand people genuinely choose to wear for actual exercise.

Brand Performance & Investment Implications

So what’s the takeaway for investors?

First, I believe there is a structural tailwind for sports and health in general, given the recovery of middle-class and affluent spending combined with the “athleisure” fashion trend.

This comes against the backdrop of major sporting events—the Winter Olympics and upcoming World Cup have sustained momentum in sports spending, especially Anta. As the official uniform provider for Chinese athletic teams, Anta has enjoyed significant brand exposure.

Domestic brands are already seeing accelerated growth. According to our online and offline tracking, Anta’s

full-channel sales improved significantly: +9% YoY in January-February 2026, a sharp turnaround from -7% in

Q4 and -10% in December 2025.

But I believe “athleisure” brands such as On, Lululemon, and Arc’teryx could enjoy even stronger growth.

The confluence of two factors creates a powerful tailwind. First, value-based premium is emerging—consumers are not just buying functional sportswear, they’re buying identity. Premium brands are likely to outperform. Second, usage scenarios are extending beyond “exercising” to “commuting,” “dating,” “working”—this means consumers buy more, buy more frequently.

The data support this.

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Just last year, the majority of people likely agreed that AI-generated videos would remain “toy projects” for a very long time. After all, it was easy to spot an AI video by its awkward hand gestures or the “almost” human-like faces that sparked the uncanny valley effect.

But it seems the narrative is shifting rapidly. In fact, I personally think entertainment, in general, will become one of the biggest markets as a result of the proliferation of AI tool development. Video-making is starting to emerge as the first type of entertainment that can actually go beyond “toy projects” and begin to monetize.

As early as May of last year, the hype over AI-generated short dramas gained a significant amount of attention on Chinese social media. Many netizens started to explore the possibility of becoming real film directors. (Last May also happened to be when Google released Veo 3, whose high-fidelity video quality made cinematic realism a possibility.)

However, these attempts didn’t become a massive sensation back then, partly because the visual quality was still lacking, and partly because they were limited by the high expenses of using video models on a routine basis. But this has quietly shifted coming into 2026. Several interesting things have happened in just a few months:

When the award-winning director makes an AI film

First, renowned award-winning Chinese director Jia Zhangke released an AI film in February, starring an AI version of himself. Although this was not his first attempt at AI filmmaking (he made an AI movie back in 2024), this new release still created a sensation on the Chinese internet. Jia used the Seedance 2.0 model—the latest release from ByteDance—to produce the movie, and its near-perfect image quality sparked awe across Chinese social media.

Jia Zhangke’s AI video “山河故人” created using Seedance 2.0, starring the AI version of himself, total 5:31 in length

The sensation surrounding Jia’s movie went viral mainly because of his reputation in China as one of the country’s most important and respected filmmakers. The fact that a time-honored director remains so open to AI technology says a lot about the creative industry. However, the film’s plot itself—which involves profound, philosophical questions about the ownership of films in the AI age—could feel slow to ordinary audiences.

When AI engineers irresistible dopamine spikes: AI short drama

Soon after, something that truly resonated with netizens started to break out and go viral online: the “CatFu” reels took the Chinese internet by storm. These short videos feature tabby cats in traditional Chinese Kung Fu attire, using AI to replace human actors in scenes that mimic classic 1970s Hong Kong Shaw Brothers martial arts films. After the inaugural reels went viral, “CatFu” quickly became a popular series.

After watching a few, I have to admit that these are definitely beyond “toy project” videos. They are actually something I would watch through (and perhaps I would happily accept any ads embedded in them, just like standard reels produced by humans). What caught people’s attention wasn’t just the near-perfect realism, but the funny plots and exciting turns of events packed into just under 20 seconds.

For instance, this one cracks me up:

These are early signs that AI-made short videos are starting to become truly monetizable.

However, I do have reservations regarding copyright issues, as CatFu‘s viral success is largely due to the deep nostalgia and lasting legacy of the Shaw Brothers’ classic martial arts films.

But soon after, a completely original AI-generated short drama, Huo Qubing 霍去病, went viral. With no real actors or live shooting, it relied entirely on AI tools via the “Nanoman AI production line” (纳米漫剧流水线), a first-of-its-kind industrial AI cartoon platform in China.

Featuring epic war scenes, the drama gained attention for allegedly costing only 3,000 RMB, being made in 48 hours, and reaching 500 million views. Although the director later clarified that the 3,000 RMB covered only the AI computing costs, that the team included around 20 people, and that production lasted four intense days, the cost was still astonishingly low for such high viewership results.

AI productions are now demonstrating the potential to cost far less than traditional short dramas (thousands versus hundreds of thousands of RMB per episode) and can be produced in days rather than months.

According to industry statistics from DataEye-ADX, the number of domestic AI-generated short dramas (including AI live-action and AI cartoons) released in January 2026 reached 14,634. This averages out to over 470 new releases per day—equivalent to a new drama launching every minute and a half.

Just a few days ago, rumors of a “massive shift in short dramas” sparked heated discussions in the industry. Topics like “Hongguo and others will reduce investment in live-action short dramas” dominated Weibo’s trending search list for consecutive days. (Hongguo is a short-drama platform owned by ByteDance).

In fact, since the beginning of the year, several AI live-action dramas have become massive breakout hits: Zhanxian Tai AI Live-Action Version topped Hongguo’s hit cartoon list within two days of its release, exceeding 100 million views in six days; The Lawful Daughter Weeps Blood, Mother Overturns the Imperial Family amassed over 230 million views, topping industry charts; and Douyin’s Milk Dumpling Empress Dowager’s Palace Schemes and other works have also surpassed 200 million views.

- 36kr.com

This brings us to a fascinating quirk of AI video models: they are built to spike dopamine, not for people to think and reflect deeply. If a generated video has a slight temporal glitch in the background, or if the AI doesn’t perfectly render the physics of shattering glass, no one cares. The audience for a vertical short drama is scrolling on a subway commute, looking for a quick emotional hit. They are paying for the dopamine spike, such as the moment the underdog slaps the arrogant villain.

As we covered in previous newsletters, China’s short-video drama sector is already a billion-RMB industry and is even exporting its productions abroad, as seen in the boom of Chinese-made short dramas in the U.S. Now, these vast amounts of short dramas are becoming the training data that makes cheap AI productions a reality.

Chinese models have ingested oceans of this highly specific aesthetic data. They know exactly how to render the dramatic lighting of a CEO’s corner office or the ethereal glow of a Xianxia (Eastern fantasy) realm. They are skipping the pursuit of perfect physical reality to over-index on emotional and visual hooks. It’s the visual equivalent of junk food: engineered to be irresistible, cheap to produce, but highly profitable.

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When AI integrates into more ‘legitimate’ productions

If mass-produced “junk food” doesn’t seem convincing enough that the AI video industry is becoming a reality, perhaps examples of AI integration in more “legitimate” TV shows and movies will be compelling.

For instance, in the TV show Swords Into Plowshares (太平年), which just premiered this January, Kuaishou’s Kling AI video models were integrated into the production workflow. This is absolutely not a “fast-food” production; it is a high-quality historical drama set between the Five Dynasties and Ten Kingdoms periods, focusing on political intrigue, warfare, and the unification of China into the early Northern Song dynasty. The show quickly became one of the most-watched dramas of the year so far.

According to an interview with Chen Yi, founder of Time Axis (时光坐标)—the visual effects team for the show—Swords Into Plowshares production employed AI extensively in both virtual scenes and special effects, with notable contributions from Kling AI. AI accelerated production efficiency: for instance, storm scenes that traditionally took two months were completed in just two weeks using AI-assisted workflows.

For instance, in Swords Into Plowshares, the stormy naval battle scenes utilized Kling AI to generate the fluid dynamics of the ocean waves. This was then layered with 3D modeling to refine the details of the warships and compositing techniques to achieve the final rain effects. The end result far exceeded expectations—improving efficiency by 8 to 10 times while maintaining professional-grade cinematic standards. [*]

Kuaishou’s Kling AI 3.0 now serves as a professional-grade creative partner for over 30,000 enterprises worldwide, enabling high-quality, commercially viable AI content generation.

I believe 2026 is only the beginning of the AI film industry, and more and more teams will be seriously asking: “How can we use AI to put on a great show and get paid today?” Gone are the days when we could easily dismiss AI videos as “toy projects.” This shift is going to present real growth opportunities—not just for filmmakers, but also for the companies building the models and workflow integration tools.

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Reminder

Baiguan is hosting the AI & Robotics Innovation Tour in Shanghai from April 21–23. We will be visiting and experiencing generative AI, robotics, and robotaxis. There will also be an opportunity to see China’s startups and learn how they are producing AI-native content, games, and communities beyond just video making.

If you are interested in coming to China to explore frontier tech and startups, don’t forget to check out our itinerary and invitation to RSVP here.

If you wonder how “low-sugar” rice is made, it uses a specific “boil-drain-steam” process. This program filters out a portion of the rice’s amylopectin (the component easily converted into sugar) along with the starchy rice water. Using a smart low-sugar rice cooker reportedly reduces the sugar content and caloric value of the rice.

While I didn’t delve deep into the scientific legitimacy of this method, its popularity signals something important: an increasing number of Chinese households are adopting the “low-sugar” trend and becoming more aware of daily sugar intake.

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The rise of “low-sugar” tastes

For a long time, sugary beverages remained popular in pop culture due to their soothing, stress-relieving effects, despite known health issues. Young Chinese consumers even coined a name for it: “Happy Fat-Boy Water“ (快乐肥宅水). Originally inspired by Japanese anime culture roughly a decade ago, the term refers to sugary carbonated drinks like Coke. In high-stress urban life, the happiness brought by a cup of Coke or sweetened milk tea has been considered a worthwhile indulgence, even at the expense of weight gain.

But the trend is changing.

Since late 2022, social media discussions regarding “no-sugar” and “low-sugar” lifestyles have surged as people become more health-conscious following the COVID pandemic. Choosing sugar-free beverages, once a habit limited to niche health-conscious groups, is quietly becoming a mainstream—and even fashionable—trend.

Part of this shift is driven by necessity. By 2024, China had the world’s largest diabetic population, reaching 140 million adults and accounting for over 25% of global cases. Overweight rates in Chinese adults increased from 37.4% in 2000 to over 41% in 2014, while obesity rose from 8.6% to nearly 13% during the same period [*].

These statistics may seem unintuitive; if you live in China, you might not see many people who appear visibly overweight. However, rapid urbanization has led to reduced physical activity and sedentary lifestyles for urban Chinese, making these health issues less visible. There is a growing trend of younger-onset diabetes (ages 18–49), with abdominal obesity being the highest attributable risk factor. This risk is increasing fastest among young people in industrialized regions living in high-stress, yet sedentary work environments.

This has given rise to an enormous obesity-related market in China, a topic we covered in 2023 regarding how the weight-loss drug Ozempic took China by storm.

Another factor is a historical lack of awareness. Even today, many people aren’t aware of the exact sugar content in their diets. For instance, many believe that fruit juice is a healthy beverage as long as it is natural and has no “added sugar,” despite being high in fructose.

More subtly, a typical Chinese meal is already highly concentrated with “refined carbohydrates,” which account for 50%–60% of total energy intake (sometimes higher). Many people simply consume more sugar than they intend without realizing it.

This, too, is changing. Since 2023, rising numbers of young Chinese have discussed “low-sugar” diets and “sugar control/abstinence” (控糖/戒糖) on social media. The trend first gained traction among fitness enthusiasts—a small cohort paying close attention to how food affects blood glucose—and quickly spread to the general public.

This awareness extends beyond added sugar to carbohydrates and broader sugar categories, fueling bestsellers like the low-sugar rice cookers mentioned earlier.

Blood glucose monitoring instruments have also become one of the best-selling medical devices on Chinese e-commerce platforms over the last few years. It is no longer uncommon to see urban Chinese wearing continuous glucose monitors, even if they do not have obvious health issues like obesity or diabetes. People are beginning to understand how blood glucose relates to chronic issues such as migraines, acne, and menstrual cycles, rather than focusing solely on weight loss.

The trend gave rise to increasing awareness of sugar intake, not just added sugar, but carbs and broader sugar categories in general, giving rise to new bestsellers like “low-sugar rice cookers” that I mentioned at the beginning of the article.

Blood glucose monitoring instruments became one of the best-selling medical devices in the past few years across online e-commerce platforms in China.

It has also become not uncommon to see urban Chinese in my city wear blood glucose devices, even if they do not have obvious health issues such as obesity or diabetes. People are starting to gain more understanding of how sugar intake and blood glucose are related to other chronic issues, such as migraines, skin acnes, menstrual cycles, and other areas of health, instead of focusing solely on weight loss.

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Implications for investors

Several days ago, the Financial Times reported that China is considering an additional tax on sugary beverages to curb health problems like obesity and diabetes. Although there has been no official confirmation, some publicly listed beverage companies faced a sell-off following the news.

China currently produces some of the cheapest sugary beverages in the world; while over 116 countries have implemented sugar taxes, China does not currently have one in place.

Regardless of the timeline for a rumored “sugar tax,” the “low-sugar” and “no-sugar” trends are here to stay. I believe the primary takeaway is that sugar-free or low-sugar beverages will become a growing necessity for Chinese consumers.

On one hand, awareness of sugar intake is only just beginning to scale. On the other hand, the variety and volume of sugar-free options are not yet saturated. For example, in a Japanese convenience store, it is actually difficult to find a bottled beverage that isn’t sugar-free. But in China, the majority of soft drinks still contain sugar, with only a few options clearly labeled “sugar-free” or “0 cane sugar.”

Chinese households are generally very health-conscious. My empirical observation is that a high percentage of people are willing to sacrifice the “happiness” of sugar for the sake of health, across affluent, middle-class, and low-income groups. Even without tax enforcement, I believe Chinese households will embrace low-sugar drinks with minimal education.

For instance:

Since 2023, Shanghai has piloted “traffic light” health warnings and “Nutri-Grade” labels for sugary drinks, covering over 20,000 stores.

Fudan University research shows that since these policies were implemented, sugary drink sales have dropped significantly. A September 2025 survey of 10,000 residents showed that over 50% now choose sugar-free or low-sugar options.

Our own offline payment data shows that “sugar-free” tea has experienced explosive growth among soft drinks since 2024. Functional drinks, such as electrolyte water and energy drinks popular with fitness enthusiasts, follow closely behind. China’s soft drink market is revealing a significant structural shift toward health-conscious categories.

Sugar-free tea has seen its market share grow from approximately 1.1% in 2021 to nearly 5% by late 2025. Conversely, carbonated beverages have seen a continual drop in market share since 2022.

Specifically, Nongfu Spring (HKG: 9633) is successfully transitioning from its historical identity as a “bottled water company” into a diversified beverage giant.

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It began as a simple manufacturing mishap in Yiwu, Zhejiang Province—the world’s small commodities capital. A factory worker accidentally stitched the mouth of a red plush horse upside down, turning its intended cheerful grin into a downturned pout. Originally designed as a lucky mascot bearing the phrase “money comes quickly” (a pun on “horse” sounding like “money” in Chinese), the toy was meant for the 2026 Lunar New Year celebrations.

Factory owner Zhang Huoqing explained in an interview with Xinhua: “It was simply a worker’s mistake—the mouth was sewn upside down.”

But what started as a defective item suddenly went viral after a buyer in Hangzhou posted photos on social media, dubbing it the “Cry-Cry Horse” (哭哭马). Netizens flooded the comments, asking where they could get this defective version. Many netizens added labels like “Monday horse” and “overtime horse” next to the “Cry-Cry Horse,” jokingly referring to their daily grind at work. (”Horse and cattle” is internet slang used by the Chinese to describe employees who face repetitive, grinding work, burnout, and stress.)

Sales skyrocketed from 400 units daily to over 15,000, with the hashtag #YiwuCryCryHorse going viral. The toy’s defiant yet pitiful gaze resonated deeply with young professionals, spawning memes, keychains, and even blockchain tokens.

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As a matter of fact, the “Crying Pony” plush isn’t an outlier. As I scroll through social media feeds, I’ve noticed something intriguing unfolding in China’s consumer scene over the past year: young people have suddenly developed a real fondness for “ugly-cute” things. They’re ditching sleek, luxurious aesthetics in favor of items that are quirky, imperfect, and sometimes straight-up ugly.

Another example is the viral story of how a woodcarving grandpa in Beijing suddenly blew up earlier this month.

For over a decade, an elderly man sat by Beijing’s Shichahai Lake, carving and selling wooden sculptures from a simple stall. His works—lopsided animals and figures with exaggerated, rough features—defy traditional standards of beauty. The abstract style often makes it hard to recognize what the figures are supposed to be, revealing that his craftsmanship is far from masterful.

But earlier this month, videos of his creations went viral, drawing crowds of young fans who queue up before he even arrives. He originally came from rural Anhui province and learned carpentry without formal training, relying entirely on self-exploration.

One of his most sought-after pieces is a take on “Lina Bell” (the viral pink fox IP from Disney, hugely popular among Chinese fans in recent years). Yet his version looks nothing like the original. When asked about it, he simply said: “I saw it on a lady’s purse—it looked cute—so I carved it based on my own interpretation.“

Netizens compare his style to Picasso, with comments like “more abstract than Picasso.” Some joke that “even if Disney wanted to sue him, there’s no way to prove IP infringement.”

His woodcarvings became so viral that daigou (proxy shopping) turned into a legitimate side hustle for Beijing locals, as out-of-towners paid premiums just to get one.

But behind the scenes, what truly drives the enthusiasm is the perseverance of “Woodcarving Grandpa,” whose real name is Hu Maoying. Despite his unskilled craftsmanship, Hu’s persistence for more than 10 years has won him attention. Originally from Anhui province, Hu moved to Beijing with his family 20 years ago as a migrant worker. Like many other migrant workers, he took on mundane jobs such as cleaning and part-time work before deciding to sell his woodcarvings.

Hu sourced much of his raw material from the trash—whether it was from manufacturing sites, fruit trees, or even garbage. He struggled for over 10 years before going viral. But what is often seen as “struggling” was, for Hu, simply an enjoyable daily routine. He spent over 10 years at his stall before gaining viral attention. For over ten years, he sold only a minimal amount—sometimes just a few dozen RMB per day—yet he kept going.

Some netizens exclaimed: “Many years ago, I passed by him when I lived in Beijing and bought one. I can’t believe that, after decades, he’s still there and his woodcarvings still haven’t improved.” These comments, though half-jokingly pointing out Woodcarving Grandpa’s lack of skill, convey a subtle sense of nostalgia and hope.

In an interview with Sanlian Life Lab, Hu said: “Making it to Beijing and still supporting myself—that’s already me being excellent.“

The 10 years of perseverance without skill improvement—that blind, almost absurd self-confidence—struck a chord with many young people who are also striving to make a living in big cities.

Some people see echoes of their own mundane yet persistent lives. And some people say, “Seeing these cute and abstract little things, I feel like tomorrow will be a bit more interesting.“ [*]

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Over the past few years, sharing “ugly but cute” things on Chinese social media like Xiaohongshu has become a trend. Young consumers post photos of the “ugly” yet one-of-a-kind souvenirs and keepsakes they bought serendipitously, often with captions like: “The uglier it is, the cuter it gets—the uglier, the more I want it.“ In contrast, many painstakingly perfected items ironically see poor sales.

If you observe closely, many “national-level” IPs in China are also “ugly but cute.” For instance, one viral figure is Dudu from Nanjing Hongshan Forest Zoo.

Dudu, a male white-faced saki monkey at Nanjing’s Hongshan Forest Zoo, has captivated millions with his striking appearance: dense black fur framing a ghostly white face. His look is far from conventionally “good-looking,” yet he became one of the most beloved superstars.

Spending his days mostly eating and lounging, he’s unflappable—like he’s above it all—in stressful times, which feels deeply relatable. This quirky animal soon turned into a nationwide cultural mascot. Netizens call Dudu “大明星” (the super idol), with some traveling inter-city just to see him. Sometimes, after a long journey and paying for a ticket, visitors would leave without seeing him because Hongshan Zoo was designed in a way that allowed animals to choose not to appear in front of the tourists. However, this didn’t stop visitors from coming back time and time again, just to try to see him.

His popularity also created real business for the zoo, as tourists rush in for merchandise: badges, magnets, and even pancakes shaped like Dudu.

This trend goes beyond just “ugly” appearances. Another correlating trend is that netizens are increasingly embracing things that are absurd by nature. A prime example is the app “死了吗” (Sileme, literally “Are You Dead?”), which recently topped the paid charts in China’s Apple App Store. (The name is a playful pun on the food delivery app Ele.me, which means “Are You Hungry?” in Chinese.)

Created by a developer born in the ‘95s, the app asks users to check in daily to confirm they are still alive by pressing a green button. If you haven’t checked in for a couple of days, it emails your emergency contacts. There’s no login, no personal data collection—just a blunt, existential daily ritual. Despite its simple, absurd, and almost comical functionality, the app became a viral meme across the internet (rumors even say the team attracted investors interested in funding them).

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This psychological pivot—rooted in anti-perfectionism and vulnerability—fuels the inevitability of many popular IPs in China. The trend points to bigger opportunities in China’s IP economy—it shows that the success of “kind-hearted but clumsy” personas, such as Labubu (which isn’t pretty by standard judgment) and Pop Mart’s latest IP “CryBaby,” is no coincidence.

Pop Mart branded its latest IP, “Crying Babies,” as an encouragement for emotional expression, challenging societal norms that suppress vulnerability and presenting the CryBaby as an act of bravery rather than weakness.

Young consumers are turning away from the allure of sleek, luxurious, and perfect items. “Ugly but cute” things remind them they can be as quirky and imperfect as they want. In an environment where pursuing an abundant career and life in the city has become increasingly competitive and stressful, embracing “ugly things” sparks empathy, humor, and nostalgia for simpler times.

These “ugly” items also serve as an anchor: despite not being the top student or employee, they still deserve fulfillment just by being ordinary people—doing what they like every day, living simple and sometimes plain days for the next decade. Even then, they deserve self-worth, meaningfulness, and the hope that someday they’ll have their own spotlight moment, just like the woodcarving grandpa.

Thanks for reading through! I’d like to share my own dearest “ugly-cute” thing with you guys :)

Related Reads

The Signal

In the United Nations Population Division’s World Population Prospects 2024 (published approximately every two years), the numbers for China are stark:

China’s births are projected to fall to 8.71 million in 2025, down another 830,000 from last year, marking a new historical low. The total fertility rate is projected to drop to 1.02, barely above that of South Korea and ranking it second-lowest in the world.

For reference, the replacement level required to maintain population stability is 2.1—China is not even close.

Since the pandemic, China’s declining birth trend has effectively become structural rather than cyclical.

We see similar signals in our own data.

BigOne Lab, the parent company of the Baiguan newsletter, tracks online sales trends across multiple consumer categories. Sales growth of pregnancy tests peaked around 2024 and has been declining steadily since, with a noticeable acceleration in the second half of 2025. (2024 was the Year of the Dragon, traditionally viewed as an auspicious year for childbirth in China and usually associated with a temporary baby boom.)

The implication is clear: the outlook for births in 2026 and beyond is likely even weaker.

Low Fertility Is Not Simply a Function of Economic Development

China’s low fertility rate is not primarily driven by absolute income levels. The more important factor is the relative competitiveness of raising a child, especially when it comes to education and future opportunities.

Data from 2024 shows an interesting pattern: birth rates are higher in western and less-developed regions than in eastern, more developed ones:

• Tibet ranks first with a birth rate of 13.87‰, followed by Ningxia, Guizhou, Qinghai, and Xinjiang (all above 10‰). Guangdong, at 8.89‰, ranks seventh and is the highest among the more economically developed regions.

• By contrast, Shanghai is at only 4.75‰, Jiangsu at 4.98‰, and Beijing at 6.09‰; all of these are among the wealthiest areas in China.

A common question is:

If China was far poorer after the founding of the PRC, why were families still willing to have many children—to the point that population control policies became necessary? And why, now that people are materially better off, are they reluctant to have children?

The answer is simple: relative comparison matters more than absolute conditions.

Today’s childbearing-age adults—mostly born in the late 1980s and 1990s—grew up as only children. In many households, virtually all family resources were concentrated on a single child. That level of intensive investment became the internalized “baseline.”

In economically advanced regions, parents aim even higher. Even if their absolute living standards are already very high, raising a child increasingly feels like entering a nationwide—or even global—competition for elite education and future prospects.
As expectations rise, so do perceived costs, pressure, and social comparison.

More importantly, in these regions where career upsides are higher, the opportunity cost of pregnancy and raising children for women is also significantly higher.

Therefore, behind China’s declining fertility rates lies a widening chasm in both economic development and social mindsets. Although they belong to the same nation, certain Chinese regions now effectively mirror the living standards—and the demographic challenges—of developed economies, while other regions remain at a vastly different stage of development.

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What This Means for Investors and the China Consumer Market

So, what are the implications of these trends for investors and observers of the Chinese consumer market? Here are a few of my takeaways:

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The 2025 National Day “Golden Week” holiday, the first major consumption checkpoint for 2025 H2, has concluded. Unlike last year’s holiday, which followed a significant stock market rally and fresh stimulus packages, this year’s arrived in a more normalized and still deflationary environment.

The data from this 8-day holiday (compared to 7 days in 2024) provides a crucial look into the current state of household confidence and spending habits.

Let’s look at a few key data points in today’s newsletter.

Overall observation: Travel volume hits new highs, but spending per trip declines

At first glance, the holiday was a resounding success. China saw a total of 888 million domestic trips, and tourism revenue reached over 809 billion RMB. When adjusted for the extra day this year, the daily average number of trips still showed solid growth compared to last year.

However, average spending per trip barely grew compared to the 2024 holiday despite the extra day and remains below pre-pandemic levels. This suggests that while the desire to travel is strong, consumers are keeping a closer eye on their wallets, a theme of “responsible spending“ that has persisted since 2023.

The lackluster per-trip spending can be partly explained by declining consumption expectations among middle-class consumers. According to a survey by GuruClub, an investment research platform in China, middle-class households — defined as families with a monthly income above 20,000 CNY — account for only 8% of total households but contribute to over 55% of total consumer spending. This group has seen the sharpest decline in consumption expectations.

The slowdown is also linked to a shift in traveler behavior, especially among the post-95 generation, which now makes up the largest share of tourists in China. Rather than traditional hotel stays, many are choosing more affordable, experience-driven alternatives, even including camping. During the holiday, tent rental orders surged 410% year-on-year. [GuruClub]

However, this doesn’t mean that China’s consumer sectors lack bright spots. In particular, the following themes offer structural opportunities for investors:

Service over goods

During China’s 2025 National Day holiday, service consumption outpaced goods consumption, growing 7.6% year-on-year. This marks part of a broader trend in which consumers increasingly prioritize unique experiences over material goods or luxury accommodations.

According to estimates from Minsheng Securities, service consumption accounted for a larger share of total spending than goods consumption for the first time during this year’s eight-day National Day holiday.

To get a sense of what is offered, you are welcome to check out this older post in the same series: Charts of the Week. You can also get free access by sharing us.

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I won’t bore you with the story of Laopu, as I’ve already written a newsletter that comprehensively covered the brand and the analysis behind its rise. Today, I want to dive into Songmont, because it reflects far more about the Chinese consumer market than just the rise of another designer brand.

How domestic designer brands are on the rise

The prevailing narrative is that aspiring luxury and designer brands are struggling in China, as the middle class grapples with the twin shocks of a real estate downturn and slowing income and job growth.

Since Covid, “price-for-value” has become a defining theme in China’s consumer market. Luxury sales, after a strong start in 2023, have since diverged. At the top end, Hermès continues to outperform, while brands like Dior, Louis Vuitton, and Gucci—still heavily dependent on middle-class spending rather than the top 1% of ultra-affluent consumers—are losing momentum.

But as other aspiring and designer brands struggle, Songmont has emerged as a rising star. Priced at the entry-luxury level, most of its handbags retail between 1,000 and 3,000 RMB (140 - 421 USD)—placing it in direct competition with brands like Michael Kors and Coach.

Increasingly, young office workers in cities like Shanghai and Beijing—who once saved up for Louis Vuitton, Celine, or Fendi, often hunting for last-season styles in outlets or the secondary market—are turning to Songmont instead. Rather than spending tens of thousands of yuan on an LV bag, which could amount to more than half of their monthly salary, they see Songmont as a stylish yet far more affordable alternative, provided they are willing to let go of the “big-name logo” obsession.

The shift is visible in everyday retail scenes.

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When I walked past a Songmont store in Sanlitun, Beijing, the other day—around 9 p.m. on a weekday evening—almost every other shop, from luxury boutiques to mid-tier designer brands, was empty. Songmont, however, was packed. Most of the customers were women in their late 20s or 30s, but I also noticed men in their 30s browsing. That struck me as unusual: in China, few men would spend several thousand yuan on a designer bag (unless they are already loyal luxury buyers). Otherwise, they usually skip branded bags altogether and stick to more affordable options. And this wasn’t just a one-off sighting. I’ve seen the same thing walking past Songmont stores in Shanghai and Nanjing—their shops consistently draw a lively crowd.

For Chinese urban consumers, Songmont strikes a sweet spot: the bags offer thoughtful design and solid quality—most are made of genuine leather, not on the level of Hermès, but certainly a step above the plastics and synthetic materials often used by fast-fashion designer labels. Many of Songmont’s bestsellers also incorporate elements of iconic international luxury houses, whether it’s signature colors or classic bag silhouettes. The result is that urban shoppers can signal refined taste and style at just a fraction of the price they would pay for an LV or Celine.

Songmont has also become a way to tap into the “quiet luxury” aesthetic that has surged in popularity in China over the past few years. As some netizens put it bluntly: “Carrying a Coach means you can probably only afford a Coach. Carrying a Songmont, on the other hand, suggests you might already have an LV, Hermès, or Chanel at home and are now looking for something more unique.”

The modern “classical Chinese style”, or the “China Chic”

Songmont’s success is not an isolated case. In fact, many domestic designers are building strong brands by leaning into what is often called the “modern classical Chinese style,” or simply “China chic.” Despite China’s long history, it was once rare to see luxury or designer products that reflect Chinese aesthetics. Affluent consumers were largely satisfied with paying for Western labels and design. But in recent years, a shift has taken place: more and more consumers are seeking to reconnect with China’s cultural heritage and identity.

In my article about Laopu, I noted that foreign luxury houses once filled the gap in China’s premium market simply because there were no real local alternatives. However, that doesn’t mean Chinese consumers naturally—or fully—resonate with the design or cultural messages of those Western brands.

This matters even more in the designer space, where storytelling, identity, and personal expression are core to the brand proposition. The rise of “China chic” has fueled a wave of homegrown labels that fuse traditional cultural elements with modern aesthetics. Songmont is part of this movement—but it is far from the only success story.

A common entrepreneurship path for these domestic fashion brands is to start locally—sometimes even purely online—to build a presence with minimal cost. Songmont, for example, launched a massively successful online business before moving into offline stores, usually selecting prime or tier‑1.5 locations so that its stores appear alongside brands like Gucci, Dior, Coach, and LV, often just one or two floors above them.

Other brands, such as HECO and Tangxindan, also rely heavily on online sales before expanding to physical stores in major cities like Beijing or Shanghai. They deliver a “modern Chinese style” that resonates with young consumers. While Chinese-inspired designs have long existed, many older designs are overly literal copies of traditional motifs, making many consumers feel that these designs belong to their grandma’s generation or are unsuitable for casual, everyday use. Emerging domestic designers are filling this gap by creating a modern “China Chic” that incorporates iconic traditional elements while blending seamlessly into contemporary life in an understated way.

These brands also place heavy emphasis on marketing and collaborate with celebrities to promote their products. As a result, consumers no longer feel that the brand is just “智商税”, or “IQ tax”—an internet slang term used by Chinese netizens to describe something that is overpriced and offers little value—but instead see it as something their idol admires, allowing them to showcase their own taste and values.

The celebrities involved are usually very well-known in China. Even though consumers fully understand that these items aren’t on the same luxury level as Hermès or LV, wearing these domestic bags or fashion pieces still serves as an effective form of social currency. It is far easier to pick one of these items than to navigate the many niche designer brands that have little to no presence on mainstream Chinese social media.

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Songmont is no exception. It draws heavily on oriental aesthetics as its primary design inspiration, fusing elements of China’s ancient architectural and cultural heritage into its products. The Chinese name, Songmont—Song (松, pine) and Mont (山, mountain)—literally means “there are pines under the mountain,” evoking picturesque scenes that symbolize harmony with nature and reflect the essence of Oriental aesthetics.

For instance, the “Roof Bag” series draws its inspiration from the eaves of traditional Chinese architecture, referencing both its architectural structure, as well as the iconic jade color.

And Songmont has taken its marketing efforts to the next level. For instance, it has collaborated with many foreign KOLs and celebrities, including Kelly Rutherford, the actress who played Lily in the American show Gossip Girl. Her portrayal of upper-class, old-money elegance and timeless beauty left a lasting impression on many urban Chinese, especially those who grew up with exposure to foreign culture. Gossip Girl was once one of the most popular foreign shows among Chinese born in the 1990s, who are now in their 20s and 30s—the very demographic that forms Songmont’s core consumer base.

“中女时代” — The era of the middle-aged female

As the modern “China chic” vibe gains popularity, international brands are increasingly “forced” to integrate into Chinese consumers’ daily discourse. For example, Aesop incorporated the oiled-paper umbrella—an iconic cultural symbol in southern China—into its offline store interiors in Hangzhou; and Maison Margiela collaborated with Nanjing Yunjing, a century-old traditional Chinese silk brocade craftsmanship, for its bag designs.

Yet few brands have captured as much attention and resonance among consumers as domestic names like Songmont. Beyond symbolic similarities or direct references to cultural icons, consumers are increasingly seeking deeper connections: brand stories, values, and lifestyle statements that reflect their personal identity.

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On September 19, Chinese firework artist Cai Guoqiang and outdoor apparel brand Arc’teryx jointly staged a fireworks display called “Ascending Dragon” (“升龙”) in Relong Township, Gyantse County, in the Tibet Autonomous Region. The display — set at roughly 5,500 meters altitude — consisted of three sequences of fireworks along the Himalayan mountainous ridge, with imagery meant to evoke a dragon — a powerful symbol of vitality and prosperity and one of the most enduring cultural totems in Chinese history.

Soon after videos of the event circulated online, the display triggered intense backlash over environmental and cultural concerns. Netizens began calling for a boycott of Arc’teryx, arguing that setting off fireworks in such a fragile alpine ecosystem risked disturbing wildlife, damaging slow-growing vegetation, and polluting the high-altitude environment. Many also criticized the spectacle as disrespectful to local traditions, which hold mountains as sacred and discourage loud disturbances. The sponsored firework show is the complete opposite of environmental protection and respect for nature—values that strongly resonate with China’s affluent urban middle class and outdoor enthusiasts, who form Arc’teryx’s core customer base.

Some netizens have even extended the boycott to Anta Sports (2020.HK), the Chinese sportswear conglomerate that acquired Arc’teryx’s parent company, Amer Sports (AS:NYSE), in 2019 and now effectively owns the brand.

It’s evident that the firework installation had terrible aesthetics and was an obviously poor idea for an outdoor brand, yet it’s just uncanny how such a decision was made. Many are struck by the fact that both Cai and the Arc’teryx team initially seemed to enjoy and celebrate the show as a huge success.

In today’s newsletter, I want to give you more context on what this controversy reveals about Chinese consumers — and why the backlash goes beyond environmental concerns to reflect deeper social and cultural shifts.

How Arc’teryx managed to anger the full spectrum of Chinese consumers

Speaking generally (and perhaps a bit stereotypically), Chinese consumers have very different values and attitudes toward brands. Urban middle-class consumers and those living in more remote regions, rural areas, or less economically developed cities often care about completely different things.

For example, we’ve previously discussed how nationalism can be an effective marketing tool for certain consumer segments — particularly those from less economically developed regions or with limited exposure to foreign culture. These consumers might feel justified boycotting Nongfu Spring bottled water just because nationalist influencers claimed the bottle cap resembled the Japanese flag. The same narrative, however, generates almost zero resonance among the urban middle class.

The fact that Cai Guoqiang’s fireworks show, sponsored by Arc’teryx, managed to get both groups to finally agree — and get angry at the same time — shows just how little the team understood the Chinese consumer market.

The rising urban middle class

“ESG” — a concept that originated in the 2000s and gained significant material impact in North America and Europe — has existed in China for years, but mostly as a buzzword. For a long time, corporate references to “environmental friendliness“ or “social responsibility“ were treated as nice-to-have branding or merely compliance with basic regulations, rather than as priorities with real financial impact. For one thing, investment decisions in China were rarely bound by ESG mandates, and it's common for consumers to choose price and convenience over whether a brand truly embodied ESG values. (Realistically speaking, many consumers simply lacked the awareness, tools, or access to evaluate how a company performed on ESG benchmarks.)

But that is changing. In recent years, China’s urban middle class has begun voting with their wallets, willing to spend real money to support brands that align with their values.

Arc’teryx has seen spectacular expansion in China thanks to the post-COVID boom in outdoor sports. In Q1 and Q2 this year, the brand posted double-digit year-on-year sales growth despite the broader consumer slowdown — proof that demand from affluent consumers remains robust. But its increasingly aggressive expansion in China has also widened the gap between its current positioning and the values that originally built its reputation as a professional outdoor brand.

Arc’teryx, which first won over hardcore outdoor enthusiasts in the 1990s with its technical hardshell jackets, has in recent years faced criticism in China for drifting away from its image as a serious outdoor brand.

On Chinese social media, Arc’teryx is sometimes playfully called an example of “厅局风” — literally “bureau-chief style” — referring to understated but pricey outfits that project status and authority. The look is polished and professional, but its purpose is more about signaling taste and success. This trend reflects the brand’s growing popularity among city dwellers who appreciate its design and quality but may wear it mostly in urban settings rather than on the mountain. They may not be diehard outdoor enthusiasts, but they form a large base of affluent Chinese who can afford a jacket like Arc’teryx. For critics, this shift has turned Arc’teryx into more of a status symbol — a way to signal an “outdoorsy” lifestyle — rather than a brand strictly defined by its pure outdoor performance.

Many outdoor enthusiasts argue that Arc’teryx’s management has lost touch with the outdoor spirit that once defined the brand. They point out that a true outdoor enthusiast would never have approved a fireworks show that risks damaging the very landscapes where Arc’teryx gear is meant to be worn. To them, the backlash over the event felt less like a one-off mistake and more like the inevitable result of a brand now led by people who no longer live and breathe the outdoors.

Apart from environmental issues, China’s urban middle class — especially those born in the 1980s and 1990s — is paying more attention to how socially responsible companies are. For example, this year more and more netizens are boycotting products from companies that follow the “996 schedule,” the notorious work culture requiring employees to work 9 a.m. to 9 p.m., six days a week, often without clear overtime pay. On Xiaohongshu (Red Note), people are sharing lists of companies that mistreat employees and avoiding their products.

The conversation hasn’t yet reached a level that creates real, measurable impact on companies. (And, frankly speaking, it’s hard to determine which brands are fully compliant across their supply chains). But the fact that more young consumers are talking about it shows the urban middle class is shifting toward values-driven purchases, not just buying based on price or convenience — a mindset closer to what one would see in North America and Europe.

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Conservative and traditional consumers in lower-tier cities and rural areas

The fireworks show happened on September 19, just one day after September 18, a sensitive date for all Chinese people, as it marks the anniversary of the Mukden Incident—the pretext for Japan’s invasion in 1931 and the beginning of a decade of national tragedy and historical humiliation.

Many netizens escalated their anger, discussing whether the artist Cai Guoqiang and his family hold foreign passports or permanent residency. It’s not actually clear whether they still hold Chinese passports, but both of Cai’s daughters were born and raised abroad (in Japan and the US).

The broader context is that celebrities and entrepreneurs who hold foreign passports or PR while continuing to monetize within mainland China have become a sensitive—and often problematic—image, and Cai is far from a unique case.

For instance, in my previous newsletter, “The Fall of China’s Iconic National Brand,” I discussed how obtaining foreign green cards or sending second-generation children abroad shifted from being a widely accepted practice among Chinese elites to a sensitive issue that now requires discretion in recent years:

Following China's decades of rapid economic growth, it became common—almost standard practice—for successful entrepreneurs and affluent families to obtain foreign green cards or passports, most notably from the United States and Canada. It also became standard practice for business leaders to send their children—the so-called second generation—to study abroad, with the U.S. and Canada again being top destinations.

These were as much personal choices as strategic ones. For companies seeking global markets or planning to IPO overseas, registering in the Cayman Islands was considered a standard step for accessing foreign capital markets.

But in today's charged social atmosphere, these once-routine practices have become dangerous liabilities. Some consumers now question the national loyalty of business owners. A foreign passport or offshore holding company can be twisted into damning "evidence" of betrayal. Whether a company is a true "Chinese national enterprise" carries far more weight today than ever before.”

Even Aileen Gu, the Chinese-American skiing athlete who won gold for the Chinese team at the Beijing Winter Olympics and has done absolutely no apparent harm to China, received very mixed reviews on Chinese social media. While many praised her sporting excellence and personal character, a large number of netizens expressed resentment over her (unconfirmed) dual identity and ambiguous nationality. At the end of the day, it’s simply a fact that many Chinese consumers do feel a disconnect with celebrities like her, seeing them as elites who lack awareness of their privilege and who make money in China without being “100% Chinese.”

Cai Guoqiang, given his family background and the timing of the fireworks show on a sensitive date, has undoubtedly become a target of Chinese netizens. The use of “dragon” imagery also sparked widespread discontent over potential cultural appropriation among Chinese netizens, with some even accusing Cai of deliberately sabotaging the Feng Shui of the mountainous region, where they believe the Dragon vein lies.

Many bluntly wrote on social media: “I’m not a target client of Arc’teryx, and I admit I can’t afford one, but I will boycott all brands under Anta Sports.”

While Arc’teryx does not account for the majority of Anta Sports’s total revenue, it is a substantial and fast-growing component of Anta’s “multi-brand, globalization” strategy. The anger among non-core Arc’teryx consumers will probably fade quickly, but it is worth monitoring whether resentment toward Anta as the parent company continues to fester. (We can share some data insights in the coming months.)

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The even bigger context: how Chinese generations clash over values

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This isn't an isolated case. From Beijing to Chongqing, luxury hotels are turning to street food sales to earn extra cash. [Reuters]

In fact, this isn’t just happening in hotels—I've also seen this kind of "survival-mode" selling on flights and high-speed trains. On a Capital Airlines flight last year, for instance, a flight attendant "live-streamed" for half an hour, pitching everything from a plane model built with traditional mortise-and-tenon joints (bundled with a 288 RMB educational course) to beauty products like the trendy Bosein eye cream, plus the same brand of aviator sunglasses worn by famous actor Zhang Hanyu. One of the items was even a blind box designed by the captain himself, tapping into China's blind-box craze. (I have to say, the flight attendant was an excellent salesperson—her pitch skills were definitely underrated.)

This scramble for cash reflects a harsh reality: Chinese consumers and companies are indeed tightening their belts.

But this is only half the story.

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Only 6% of China's population lives in first-tier cities (Beijing, Shanghai, Shenzhen and Guangzhou). The vast majority experience a very different lifestyle. To truly understand China, we need to look beyond Beijing, Shanghai, Guangzhou, and Shenzhen, and pay attention to the lower-tier cities that often go unnoticed.

In fact, the gap between first-tier and lower-tier cities is still widening. H1 2025 data shows a clear contrast: retail sales in Beijing fell 3.8% year-on-year to RMB 673.4 billion; Shanghai grew just 1.7%, and Shenzhen rose 3.5%—all below the national average of 5%.

The restaurant sector looks even weaker in first-tier cities. In H1 2025, Beijing's restaurant revenue dropped 3.6% and Shanghai fell 2.6%. By contrast, most second-, third-, and fourth-tier cities recorded positive growth. The same pattern is shown in auto sales—down in Beijing and Shanghai, but up by double digits in many smaller cities.

One reason is migration patterns. For instance, in a previous newsletter we discussed how young Chinese are moving back to their hometowns in smaller cities and counties, where affordable housing offers a much better work-life balance. Many returnees have brought big-city tastes, habits, and mindsets with them, reshaping the local lifestyle.

Many young Chinese even took this a step further by starting their own businesses in smaller towns. In 2023, as China emerged from COVID, a wave of young people and recent graduates—frustrated by the tough job market and grueling work hours—jumped into what became known as "spur-of-the-moment, passion-fueled entrepreneurship." They moved to smaller cities where rent and labor costs were far lower, launching cafés, fitness studios, design workshops, boutique stores, and content creation studios, just to name a few examples. They transplanted the ideas and aesthetics they had absorbed in big cities into smaller towns, where these styles still felt fresh and fashionable.

For instance, in a previous newsletter we covered Anji, a small county of fewer than 600,000 people in Huzhou, Zhejiang Province, where more than 300 boutique coffee shops have opened. Each has its own distinctive design, personality, and the personal story of its owners. On a per capita basis, Anji now has even more coffee shops than Shanghai—a city famous for its bourgeois-chic cafés on almost every corner.

However, simply transplanting the "big-city" lifestyle into a smaller town isn't a universal solution for all entrepreneurs. Recently, a widely shared WeChat article titled "The first batch of middle-class returning home to open 'Village Cafes' are back to the grind" sheds light on the less optimistic aspects of these entrepreneurial endeavors.

Many entrepreneurs who returned to their hometowns to start businesses like village cafes are now returning to their urban jobs. I translated the highlights of this article below:

In the scorching heat of August, I met my close friend Ruolan at a Starbucks in Wangjing (a district in Beijing).

She was a former colleague from a media company I worked at in Hong Kong, and also once a "village café entrepreneur." From the south to the north, we shared similar career paths.

Until over two years ago, she escaped from the high-pressure work life in Beijing and returned to her hometown in Shanxi, drawn to the idea of rural living. There, she opened her first "village café," and that marked a new direction in our lives.

Before starting her business, Ruolan had passionately told me: "Maggie, I want to open a café in the countryside, create an idealistic business."

However, today, sitting across from me, she's back in a professional outfit and high heels, her smile tinged with a sense of helplessness.

"You see, I'm back again," she laughed, pointing at the iced Americano in front of her. "This isn't the coffee I dreamed of, but at least it helps me get through the monthly bills."

Through her fragmented description, I roughly understood her entrepreneurial journey.

From the moment she entered the "village café" track, she held on for 26 months, with a loss of over 650,000 RMB. It wasn't an astronomical number, but enough to make Ruolan lose hope.

So, this Americano in front of me, when compared to the scene of her pouring her heart into every cup of hand-drip coffee at her rural café last year, truly evokes mixed feelings.

"At first, I thought that as long as there's coffee, an ancient village, and cave dwellings, I could win," she said. "But the reality is that this industry is far more complex than I imagined, and the problems behind it were far beyond my expectations."

Two years ago, when pandemic restrictions were lifted, urban "internet sensation" cafés suddenly fell out of favor. More and more people started visiting nearby rural areas to unlock a new experience—"village cafés."

The cafés in these villages, whether hidden in tea fields or set in ancient village houses, carried the fragrance of the earth mixed with the aroma of coffee. First-generation "internet-sensation village cafés" like Waterfall Café and Deep Blue Plan even generated over 100 million RMB in revenue in Zhejiang's Anji County in one year.

Ruolan's first café, located at the junction of Shanxi and Hebei in an ancient kiln village, was beside a national highway. It was about two hours' drive from Taiyuan and Shijiazhuang (Baiguan: Taiyuan and Shijiazhuang are two municipal capitals and metropolitans nearby), with relatively convenient transport. The village had several newly opened homestays, so the overall environment was decent.

She personally oversaw the renovation: painting the walls, moving tables, putting up the menu, investing nearly 700,000 RMB, including equipment, soft furnishings, outdoor flooring, and a bunch of Instagram-worthy green plants for photo ops.

"At that time, who didn't dream of growing flowers while selling coffee?" she said.

When it first opened, the café was indeed popular. During the Qingming Festival and Labor Day, many people on social media shared pictures of her café. She told me that they sold around 2,000 RMB a day, with at least 70% profit.

But the problem was that she only accounted for the holiday sales and overlooked the reality of the other 300 days.

Her village had fewer than 1,000 permanent residents. Most young and middle-aged people worked elsewhere, leaving behind mainly the elderly and children. Hardly anyone consumed coffee daily.

The real customers were young people from surrounding cities who came by car, but they only came during holidays. After taking photos, they rarely visited the second time.

"Essentially, I was selling the scenery, not the product or the experience," Ruolan said. "It's like building a stage set. The actors came on once, and then the play was over."

Business started declining from the first summer. In July, after heavy rain, she closed the café for a week, and by August, there were barely any customers left. "We couldn't even sell five cups a day, and the ice was melting white," she said.

After the National Day Golden Week that year, she started to subsidize the business, using savings and hoping that things would get better next month.

By June this year, she couldn't hold on any longer.

In the evening that she closed the café, she posted on social media: "Thanks to the friends who came, and thanks to those who didn't. The wind blew through the ancient kiln, and it also awakened me."

The comment section was full of regret, but this wasn't an isolated case for a single "village café." It was a collective dilemma in the entire sector.

When "village cafés" became a new magnet for internet traffic, they also became the urban fantasy projected onto the countryside.

It sounded nostalgic, poetic, and had a business model. But once it was implemented, many realized that reality was far colder than the filter—perhaps even indifferent.

[...parts abbreviated]

As she closed the café, Ruolan reflected, "I didn't make a mistake in starting the village café, I just took the wrong direction and chose the wrong location."

I agreed with her on this.

When everyone uses an Instagram filter and picture-taking as a template, consumers quickly become numb.

By the end of 2024, a team from the travel industry surveyed more than 30 popular village café areas in counties across China. We found that over 60% of village cafés were barely surviving or had closed within six months.

New shops are opening faster, and more equipment is being sold off. The few that are able to sustain themselves aren't doing so by relying on viral products—they're doing so through their sustaining ecosystems.

The business of cafés itself isn't wrong, but the mistake is when too many people think that just having rice fields, swings, and a hand-drip coffee pot can harvest a generation's pastoral nostalgia.

Indeed, there are a few success stories, such as Deep Blue Plan in Anji, Tao Café in Ma Wangxi, and Rice Milk Coffee in Lakebei Village, Jiangxi, which gained fame through natural scenery, unique settings, and industry integration.

But this doesn't mean you can replicate their success by simply setting up a white wall, a swing, and hanging some bulbs at any village.

[...parts abbreviated]

The true success stories are not about the label "village café," but those few who possess long-term vision, organizational capabilities, and the ability to integrate resources.

The issue now is that "village cafés" are already beginning to devolve into the "involution" (Baiguan: "involution" refers to excessive, often self-defeating competition and overwork).

You film a rice field video, and someone else shoots an aerial view of terraced fields. You post a swing in front of a white wall, and someone adds a glass dome with a rotating swing chair. You share a hand-drip coffee art, and someone is live-streaming their coffee bean grinding and acidity testing. You've just finished writing your caption, and others already have 50 posts about it on Red Note.

Does it really imply that the future of young entrepreneurs in rural and lower-tier cities has come to an end?

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I think the takeaway isn't necessarily that China's smaller towns have lost their growth potential, but rather that it highlights how rapidly Chinese consumer markets evolve. In the beginning, novel lifestyles and aesthetics brought from big cities may have easily won over smaller-town consumers. However, once the novelty fades, consumers quickly start demanding more.

This isn't just an issue for café owners; it's prevalent across many industries. I mentioned this earlier with the example of some "ancient town" tourist attractions, which were quickly built with massive government support to model successful examples. However, many of them are now going bankrupt in bulk and becoming ghost towns. Towns without the required cultural legacies to support such attraction sites simply won't survive once the initial novelty fades.

China's large consumer market makes it easy to "copy and paste" a successful model and see some quick wins, but for cities or entrepreneurs who don't consider the unique aspects of their business or location, these ventures will fade quickly.

For instance, in today's Chinese consumer market, the guaranteed "quick win" for merchants is to set up fancy, novelty scenes for consumers to take social media-worthy photos. This strategy has been so effective in attracting customers that it's now common to see people waiting for hours just to take a picture. In just a few years, hundreds of thousands of boutique shops with these setups have appeared across China. But sooner or later, consumer fatigue sets in, and those that only rely on "Instagrammable" setups without real personality or unique offerings will be quickly squeezed out.

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Lastly, the story of "rural cafes" shows that much of rural consumption still benefits from the trickle-down effects of first-tier cities. For example, if the aforementioned Anji were not close to the metropolitan Hangzhou area (only ~1.5h ride), the 300 rural cafes would likely have very different fates.

Lower-tier cities often lag behind big cities in chasing fashionable lifestyle trends as well as in "feeling the social and economic temperature." For smaller cities, especially those that rely on tourism from nearby metropolitan areas, the further deterioration of consumption in first-tier cities is certainly not a good news for them.

Looking to the future of China, I believe there will be a bigger cohort of talented entrepreneurs who can combine their unique passions with business to create long-lasting companies. The consumer market has entered a phase where people are growing tired of visiting the same "copy-and-paste" locations and taking photos just to check things off a list.

For example, in recent years, staycations are becoming more popular among middle-class Chinese who aren't interested in social media photos when they travel and avoid "influencer hotspots" altogether. People are increasingly seeking one-of-a-kind stories and experiences, even in a slower economy.

The sheer speed at which Chinese consumers can change determines that much of the "involution" problem is caused by the inability to keep innovating, not by a lack of demand growth. In today's China, you'll increasingly hear people say, "There's really nothing I want to buy; many products just look boring".

This is the other side of China's so-called "involution" problem—excessive, often self-defeating competition. Frankly speaking, the "involution" phenomenon, often reported in the manufacturing and physical goods sectors, is by nature not that different from what's happening in experiential spending and service.

On one hand, there's the imbalance between supply and slower demand growth (and, of course, the declining overall population); but on the other, Chinese consumers' cycle of chasing novel products and experiences evolves so quickly that any "successful" business template can become outdated and turn into a commodity, a homogenized version of itself, in just a few years.

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This makes "new consumption" a compelling focus—not as a broad market beta play, but as a source of high-potential alpha opportunities. This newsletter series explores those opportunities and the consumer psychology behind them.

Disclaimer: This post is not sponsored by any of the companies mentioned.

The boom of "niche" sports

For much of the past decade, middle-class sports trends in China were as much about appearances as they were about the activities themselves. Equestrian lessons, tennis, and golf—dubbed the "middle-class trifecta"—were once the ultimate status markers. These Western imports, often celebrated as "elite sports" on Chinese social media, carried not just athletic appeal but a cultural stamp of sophistication. Middle-class families spent generously, often enrolling their children to signal both ambition and taste.

Golf, in particular, offered something beyond fitness: it was a networking tool, a stage for business deals. In 2021, when China just came out of the first wave of COVID, the appetite for these sports was still strong—activities that the international community deemed "cool" and "exclusive" held powerful sway in Chinese cities.

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But by late 2022 and into 2023, after enduring far stricter and longer lockdowns, urban consumers craved the outdoors—not just the prestige of a sport. Novel and outdoor experiences began to edge out expensive hobbies. Frisbee, camping, skiing, and hiking exploded in popularity, driven in part by their social-media-friendly aesthetics.

For many, these were first-time encounters: southern residents without winter snow traveled north to ski and snowboard; urbanites pitched their first tents on city outskirts.

When the 2023 snowboarding season opened in Beijing, I was even a bit frustrated to see an entire lane occupied by a snowboard club that had traveled all the way from Shanghai—a journey involving a four-and-a-half-hour high-speed train plus local shuttles. But it was also a vivid snapshot of the enthusiasm among Chinese willing to invest so much time, money, and effort to experience a sport that, for them, was entirely new.

Other upscale outdoor experiences were also eagerly sought after by China's middle class. For instance, I wrote about how camping became so popular in China by late 2022 that middle-class consumers were opting for "glamping"—short for glamorous camping—a luxury camping experience featuring stylish setups, beautiful aesthetics, and picturesque locations perfect for social media–worthy photos, while happily plunking down thousands of yuan on their weekend getaways.

But this boom was not uniform. For a portion of consumers, the enthusiasm was driven by the thrill of novelty and the desire to ride social trends. Once the "IT sport" moment passed, some dropped out—put off by high equipment costs or simply realizing the sport wasn't something they genuinely enjoyed. A smaller portion, however, discovered a real passion and stayed.

But the coming and going of such waves is telling. In a consumer market as large as China's, even short-lived fads can move billions in spending.

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From social display to personal fulfillment

In the slower economy of 2025, the middle class has become more selective. The social currency of sports—how "cool" they look in a feed—has lost its dominance. Instead, activities that provide personal fulfillment over public image are holding ground or growing.

Outdoor running and hiking have kept their momentum, appealing to those seeking a mindful escape rather than a performance for the camera. Marathon running is one such winner—I wrote about how marathon competition has become a sought-after activity among the Chinese middle class and affluent, who are willing to spend real money and time on specialized gear and personal training.

Continue reading to learn about the latest sales trends of sports brands such as Lululemon, Hoka, and On Running, along with broader implications for investors interested in equity market opportunities.

*Our parent company, BigOne Lab, collects online data via major e-commerce channels such as Tmall, JD, Douyin, and an offline panel of malls and specialty retail stores.

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"Chinese national enterprises"—the so-called 民族企业—have long been a staple of China's history textbooks. In modern Chinese history, they are remembered as heroic businessmen and entrepreneurs who thrived amid the chaos of the late Qing Dynasty and the Republic of China era, as well as during World War II.

In recent years, however, the term "Chinese national enterprises" has resurfaced with new layers of complexity. Nationalism has evolved beyond mere political propaganda and into a powerful business strategy. For today's companies, being recognized as a "true Chinese national enterprise" can win both the hearts and wallets of consumers. But one misstep can spark accusations of being unpatriotic, leading to devastating boycotts.

This is the new reality of China's consumer landscape—something I explored in last year's newsletter, Nationalism in China: A business strategy over political discourse.

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The problematic green card, foreign passports, and second-generation elites abroad

Following China's decades of rapid economic growth, it became common—almost standard practice—for successful entrepreneurs and affluent families to obtain foreign green cards or passports, most notably from the United States and Canada. It also became standard practice for business leaders to send their children—the so-called second generation—to study abroad, with the U.S. and Canada again being top destinations.

These were as much personal choices as strategic ones. For companies seeking global markets or planning to IPO overseas, registering in the Cayman Islands was considered a standard step for accessing foreign capital markets.

But in today's charged social atmosphere, these once-routine practices have become dangerous liabilities. Some consumers now question the national loyalty of business owners. A foreign passport or offshore holding company can be twisted into damning "evidence" of betrayal. Whether a company is a true "Chinese national enterprise" carries far more weight today than ever before.

For instance, Dong Mingzhu, Chairwoman and CEO of Gree (SHE: 000651), one of China's proudest home appliance brands, recently declared that Gree would no longer hire anyone who has studied or worked abroad. During Gree's April 2025 extraordinary shareholder meeting, she stated bluntly:

"Gree will never hire returnees (海归)—some of them are spies, and I don't know who is and who isn't."

Although her comment was quickly dismissed by state media, including People's Daily, the fact that such a bold statement came from the head of a publicly listed "national pride" brand speaks volumes about today's shifting social climate.

You may recall the nationalist backlash that hit Nongfu Spring (9633.HK) last year. One of China's largest bottled water brands found itself at the center of a public firestorm after netizens accused its "Oriental Leaves" green tea packaging of containing Japanese cultural elements—a vague but emotionally charged claim.

In March 2024, online nationalists accused the packaging of "Oriental Leaves," a green tea beverage by Nongfu Spring, of containing Japanese elements and being "unpatriotic" and pro-Japanese.

Things escalated quickly when people began questioning whether the founder's son held U.S. citizenship. Despite the company's efforts to assert that "Nongfu Spring will always be a Chinese company," the damage was done. (I wrote about this incident in last year's newsletter here.)

Boycotts followed. Netizens accused the company of being a "traitorous enterprise" that was "sending money to Americans"—phrases that went viral during the scandal. According to supermarket panel data we track, Nongfu Spring's market share materially declined after the crisis.

Ironically, it was during this period that Wahaha, a longtime rival, rose as the patriotic alternative. The company gained rapid market share and was hailed as the "true Chinese choice."

But who would have thought that in less than a year, Wahaha would find itself in an eerily similar PR disaster?

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The Wahaha family dispute

Just like Nongfu's founder, Wahaha's late founder Zong Qinghou was also from Hangzhou, long celebrated for his modest lifestyle. Known as the "billionaire in cloth shoes," he famously wore simple black clothes, flew economy, and reportedly spent under ¥50,000 yuan (~7000$) a year.

But following Mr. Zong's passing in February of last year, his private life—and immense offshore wealth—was exposed in a dramatic family dispute.

On July 12, 2025, three children born out of wedlock to Wahaha Group founder Zong Qinghou—Zong Jichang, Zong Jieli, and Zong Jisheng—filed parallel lawsuits in the Hong Kong High Court and Hangzhou Intermediate People's Court. They are seeking to divide a 29.4% stake in Wahaha Group and approximately $2.1 billion in offshore trust assets previously held by the late Zong. The total value of the disputed assets is estimated at RMB 35 billion (around $4.8 billion).

Court documents revealed a web of luxury real estate and global holdings, shattering the image of Zong as a humble entrepreneur. More controversially, it was discovered that his chosen successor, daughter Zong Fuli, had held a U.S. passport for years and had used it to buy property in Hong Kong in 2009 under the name Kelly Fuli Zong.

Although official records show that she renounced her US citizenship in 2010, the revelation still touched a nerve among many Chinese netizens. Under Chinese law, dual citizenship is prohibited, and the exposure of the Zong family's privileges clashed with the public's long-held perception of Wahaha as a national brand for the 'common people.'

Netizens finally realized that the supposedly frugal billionaire actually had a complex family and enormous wealth overseas — the public persona of a modest, patriotic entrepreneur had collapsed.

While many netizens indeed support Zong Fuli for her recent leadership and philanthropic initiatives—such as donating ¥100 million to establish a food science school at Xi'an Jiaotong University—many still feel disillusioned. Comments like "Turns out the whole family is American" and "Wahaha is sending money to America" began to circulate—ironically echoing the same language once used to attack Nongfu.

Suddenly, the company that benefited from a nationalist backlash was facing the same scrutiny.

Although it is nonsensical to judge whether a company deserves support solely based on the nationality of its core management or where it is registered, nationalism remains a powerful reality for many Chinese people today—not everyone, but certainly a sizable portion of the population.

These sentiments are already having real impacts on businesses. On social media, nationalism is one of the most traffic-generating topics, sustaining countless content creators—many of whom lack genuine patriotic conviction and simply prey on consumer sentiment. But in a country of over 1.4 billion people, even a small fraction of maliciously deployed nationalist sentiment can inflict outsized damage on companies and public figures.

Public sentiment dynamics

So what impact has this latest crisis had on Wahaha's business—and that of its peers like Nongfu Spring (9633.HK)? Have we seen a repeat of last year's market share collapse?

We've analyzed millions of social media posts to trace the trajectory of online sentiment, as well as offline sales up until July 22 — and here are our preliminary findings on the evolving public opinion:

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It naturally raises the question: what kind of subcultures and social values will take root among today's young Chinese in an economy that feels eerily similar to Japan's stagnation?

Since COVID, time seems to have passed almost without notice. Now in its third year post-lockdown, China often feels caught in the same repeating narrative. So the question is: are young Chinese really giving up?

The answer, surprisingly, may lie in something as simple as what they're wearing.

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The "boom-era vibe"

A term has recently gone viral on Chinese social media: 经济上行风, or "boom-era vibe."

On the surface, it's a fashion trend. To Chinese netizens, the so-called "boom-era vibe" is a nostalgic revival of the early-2000s optimism, when dressing up boldly, not modestly, was a declaration of self-worth and ambition.

On Chinese social media, typical looks of a booming economy often feature high-saturation colors, bold makeup, heels to the office—these once-faded aesthetics are being reinterpreted by a new generation of young professionals.

On Douyin and Xiaohongshu, discussions about the “boom era”—mostly nostalgic reflections on the energetic vibe and fashion of China’s economic heyday—have surged since April this year.

In fact, this style has less to do with actual financial prosperity and more to do with projecting energy and upward momentum. It's about dressing not for the job you have, but for the life you want—even if your bank account isn't there yet.

Different from the more affluent consumers who are adopting the "quiet luxury" trend to stay low key, young professionals are embracing an aesthetic that says: I still believe in striving—even if it's hard.

As one post puts it: "Even if you're only making a few thousand yuan a month, dressing like it's a boom year helps remind yourself that you're still moving forward."

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For many young Chinese in their 20s and 30s, the so-called "booming economy" style is more than just a look—it's a quiet psychological shift, a subtle pushback against the gloom of the "lying flat" era.

Many young people first heard the term "booming economy vibe" during casual conversations with older colleagues, who would mention how generous the benefits and how positive the work environment used to be when the company was at its peak. Even when the business underwent changes, there were no layoffs—employees were simply reassigned to different roles.

Xiao Ni, a 22-year-old newcomer to Shanghai, couldn't help but feel a sense of envy and longing when she first heard these stories. But she soon came to a realization: the essence of the "booming economy vibe" isn't material wealth, but a belief in upward momentum. "In any era, there are people who thrive and people who struggle. But those who succeed usually share one thing in common—they believe they'll eventually break through." [三联生活实验室; Life Weekly]

That belief—optimism in the face of uncertainty—has become a quiet form of resilience. For many, it shows up in small things: decorating a dining table with care, putting on a bright outfit, or simply treating daily life with more intention. It's not just nostalgia for a better economy, but a choice to live as if things can still get better.

The death of the It-Bag?

The shift is also changing what people carry—literally.

On the ground, luxury spending is cooling. Our in-store payment data from May shows that most luxury brands continued their downward trend—except for Hermès, which, although long seen as the more resilient one, grew by just 4%.

The pattern reflects a broader consumer mindset: a shift away from conspicuous consumption, and toward more intentional—or less performative—forms of self-expression.

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From logos to canvas totes

One of the most unexpected winners of this shift? The humble canvas tote bag.

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I’ve been tracking China’s “new consumption” story for a while now. Last week, I wrote about Pop Mart’s collectible Labubu craze, and before that, Laopu Gold, which brought traditional craftsmanship to investors' attention. One thing is clear: China is no longer just producing affordable staple goods with only utility value. Its homegrown discretionary consumer brands are increasingly poised to create products that culturally resonate with consumers, both domestically and globally.

This is exactly why “new consumption” deserves attention — not as a macro beta play, but as a hunt for alpha. It’s about finding those rare, structurally advantaged opportunities that can deliver outsized returns and long-term growth in China. And that’s what this newsletter series is about.

Today, I want to talk about another brand that’s emerging from this wave: Chagee (霸王茶姬) (NASDAQ: CHA), which just went public this April. If you’ve been to a Chinese city in the past two years, you’ve likely seen its minimalist tea houses popping up everywhere. The company was founded in 2017 in Yunnan province and quickly scaled with a strong franchise model. Its product focus is clear: high-end freshly brewed tea—especially "milk teas" that offer a healthier alternative to sugar-heavy bubble teas or jittery espresso. Its positioning sits somewhere between traditional culture and modern lifestyle branding.

*This post is not sponsored by Chagee; Please subscribe and stay tuned for more explainers on China’s “new consumption” opportunities in upcoming posts.

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How the “traditional culture” card works in Chagee’s favor

In recent years, the revival of traditional Chinese culture has become a major trend. “Tradition meets modernity” is arguably the most popular branding strategy in China today—but pulling it off well is easier said than done. Many brands claim ties to ancient recipes, color palettes, or craftsmanship legacies, but often it’s just surface-level marketing.

Chagee is no exception in playing this card—but unlike many, it actually makes it work. As Chinese consumers increasingly seek to reconnect with their cultural roots, Chagee offers a brand experience that feels authentic.

Its name, “Chagee,” pays tribute to the classic Chinese opera Farewell My Concubine. (霸王别姬; In Chinese, these two phrases are phonetically similar.) The brand’s logo is also inspired by the traditional Dan (旦) role in Chinese opera (Dan is the general name for leading female roles in Chinese opera), and its store interiors are filled with elements from opera and traditional Chinese aesthetics: wood textures, seal-script wall designs, and traditional facial makeup patterns in opera.

Chagee's flagship store in Shanghai features a C-shaped decorative installation that pays tribute to Tang Sancai, a type of Chinese pottery characterized by its lead-based, tri-color glazes—typically in shades of green, amber (or brown), and white.

Even its beverage names draw from historical and literary references—like “Bo Ya breaking the Qin strings” (伯牙绝弦), which is a Chinese legend about the profound bond between two friends and the value of true understanding.

This year, while many western brands struggled to design a “Year of the Dragon” special edition that genuinely connects with Chinese consumers (often ending up with dragons that look like lizards in red), Chagee nailed it. Their Year of the Dragon packaging was inspired by the Hongshan Jade Dragon—the oldest jade dragon relic from the Neolithic period, unearthed in Inner Mongolia in 1971 and now housed in China’s National Museum.

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How Chagee fits into the modern lifestyle

When the “Guochao” (国潮) trend—loosely translated as "China chic"—first emerged, many brands simply pasted traditional motifs onto modern products. A good example is the revival of Hanfu (traditional Chinese clothing) in recent years. While culturally meaningful, Hanfu often felt too costume-like for everyday wear.

Chagee took a different route. Its branding blends traditional culture with modern aesthetics. The design is clean, minimal, and geometric—clearly borrowing from contemporary and western aesthetics, which resonate more with today’s young consumers.

And, most importantly, the product itself—brewed tea with less sugar—fits into the fast-paced modern lifestyle of young consumers who are seeking caffeine in a healthier way.

In my opinion, Chagee is positioned to become a serious challenger to Starbucks in China.

In my previous newsletter, "Why Starbucks is failing big in China", I’ve written about how Starbucks has struggled—from poor localization to a declining price-for-value in an increasingly competitive market. Luckin Coffee has already captured the daily coffee crowd with more affordable pricing, while high-end boutique stores appeal to younger consumers with unique interiors and artisan service. Starbucks, stuck somewhere in the middle, is becoming increasingly irrelevant to this new generation.

Chagee plays an entirely different game. It sells caffeine too—but in a way that’s tailored to Chinese tastes and habits.

For instance, take me as an example, after a decade of living abroad and being deeply immersed in the daily coffee routine, I’ve recently switched back to tea as my go-to caffeine source. Tea gives me a calmer, more sustained focus—without the jitters that coffee often brings. And I’m not alone. Many of my peers—especially in their late 20s and 30s—are making the same shift.

We all grew up watching our grandparents drink tea every day, but many of us didn’t start appreciating the ritual until we became adults. In China, this moment of rediscovery even has a name among young netizens in China: 血脉觉醒—“ancestral blood awakening.” It’s that emotional moment when something that once felt old-fashioned—something only our grandparents did—suddenly clicks with you in a deeply familiar way.

Chagee's going abroad story

Among Chinese brands that have successfully expanded globally, most have a very diluted national identity. For instance, Pop Mart and Miniso are two such examples—an average consumer likely wouldn’t realize they are Chinese brands, as they lack obvious cultural characteristics associated with China.

But what’s interesting about Chagee is that it’s expanding globally while retaining a distinct Chinese cultural heritage—and I personally believe that might be its edge abroad. Its packaging, store design, and tea culture all carry visible traces of Chinese aesthetics. Yet, it doesn’t come across as old-fashioned. Instead, it feels elevated and modernized—almost like how Japanese matcha culture was introduced to the West years ago.

Chagee has opened 148 overseas stores by 2024, mostly in Southeast Asia, with plans to expand to the US, Japan, and Korea. In the US, Chagee has attracted local customers to visit its tea truck and opened its first flagship store in Los Angeles this April, where lines outside the store have started to resemble its launch days in China.

On platforms like TikTok and Instagram, consumers are actively sharing their impressions and experiences with Chagee. What stands out is that many of them don’t come from a traditional tea-drinking culture—yet they’re praising the taste and making comments like “You had me with the packaging.” It’s a sign that Chagee’s distinct Chinese cultural identity is resonating and giving the brand a real edge.

Compared to Luckin, Chagee’s global play actually makes more sense to me. Coffee is native in most Western markets, so it’s hard to bring in something new. But tea—especially Chinese tea, presented with a twist—is both culturally relevant in Southeast Asia and still niche in the West. There’s novelty. There’s identity. There’s room to grow.

For investors to know

But of course, the tea beverage itself isn't a high-barrier business. There are dozens of competing milk tea brands in China, and their average selling price per cup is higher than many competitors. At the end of the day, taste matters more than the cultural message, especially in the Chinese domestic market.

Paid subscribers get access to our exclusive Discord community, where we share timely trade ideas, equity research, and data points related to understanding and investing in China. It's also a space to connect and network with like-minded readers from around the world.

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The verdict? Risks remain. Hiring is in a seasonal slump, and macroeconomic headwinds are causing demand to shrink rapidly, hitting small and micro enterprises—the backbone of job creation—the hardest. The property market is a tale of two cities: first-tier metros are cooling off, while second-tier cities are still bustling.

On the consumption front, while numbers look surprisingly good, it's largely due to government subsidies and shopping festivals that pulled future spending forward. The economy's internal growth engine still lacks sufficient power.

Recruitment: seasonal slowdown and diverging confidence dampen hiring

China's job market shows distinct signs of deceleration, weighed down by an off-peak hiring season and lingering macroeconomic uncertainties. Small and micro enterprises (SMEs) are the primary drag.

BigOne tracked data reveals a significant slowdown in active job listings on BOSS Zhipin in May 2024. While listings grew 5.6% year-on-year (YoY), this represents a sharp deceleration from April's robust +18.8% YoY growth. Sequentially, listings contracted 10.7% month-on-month (MoM).

Average openings per company edged up 3.2% YoY, but platform retention rates weakened, with the 6-month active employer retention rate falling 5.3 percentage points (pp) MoM to 81.3%, and the 12-month rate dropping 3.5 pp MoM to 71.7%.

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Stark divergence by company size: Demand stability hinges on scale

• Megacorporations (10,000+ employees): Relatively resilient, with job listings up 13.5% YoY (flat vs April) and a slight +0.8% MoM increase. Their 6-month retention rate dipped 4.2 pp MoM to 81.7%.

• Small & Micro Firms (<100 employees): Experienced a pronounced slowdown, with job listings growing just +5.2% YoY – a steep decline from April's +20.9% YoY pace – and shrinking 12.3% MoM. Their 6-month retention rate also saw a significant decline (-5.4 pp MoM to 80.8%).

Sector-wide deceleration: Hiring momentum cooled across major industries. Despite positive YoY growth in most sectors, MoM contractions were pronounced

• Manufacturing: +5.9% YoY, -10.8% MoM

• Construction: -2.0% YoY, -8.9% MoM (only sector with negative YoY growth)

• Accommodation & Catering: +12.9% YoY, -8.5% MoM

• Wholesale & Retail: -3.1% YoY, -14.4% MoM

• Education: +3.8% YoY, -11.7% MoM

• Finance: +2.3% YoY, -13.0% MoM

• Information Technology: +6.7% YoY, -10.9% MoM

• Real Estate: +11.8% YoY, -8.8% MoM

Salary expectations: Core wages hold steady, high-pay roles in short supply

Our data confirms two divergent trends:

1. Core wage stability for current roles (LFL growth anchored at ~4%), suggesting employers value workforce retention.

2. Chronic softness in premium job creation (negative Mix Change), reflecting caution toward high-cost hires and slower expansion in tech/finance sectors.

China’s property market flashes mixed signals as stabilization plays out

(Data Source: Beike, based on the data of the week ending June 14, 2025; Data collected and curated by BigOne Lab)

Secondary home sales in Week 24 (June 8-14) rebounded 16% year-on-year (YoY), recovering from Dragon Boat Festival distortions. Yet the growth rate slowed when compared to pre-holiday momentum – the 18% YoY surge in Week 21 (May 18-24) – confirming a broad moderation trend since early May.

Notably, the rebound split sharply along city tiers: Tier-1 cities managed just +4% YoY growth, down sharply from +19% in Week 21. New Tier-1 cities held steady at +7% YoY. Tier-2 markets surged +42% YoY, accelerating from +36%

Demand visibility improved as viewing appointments jumped 13% YoY nationwide. But post-holiday normalization dragged WoW metrics down -4%, hinting at sustained caution. Tier patterns persisted: Tier-1 (+7% YoY); New Tier-1 (+8% YoY); Tier-2 (+27% YoY).

Supply & Pricing: New listings net adds across 17 key cities contracted 3% WoW. Tier-1 asking prices inched up 0.1% WoW. New Tier-1 and Tier-2 markets saw prices decline -0.2% WoW.

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Consumption surprises on the upside, but lacks organic growth momentum

China’s retail sales surge 6.4% in May, defying expectations

China’s consumer sector delivered a robust rebound in May, with retail sales climbing 6.4% year-on-year – sharply exceeding market forecasts of 4.9% and marking the fastest expansion since mid-2024, according to the National Bureau of Statistics. The surprise surge, up from April’s 5.1%, reflects potent policy tailwinds and favorable calendar shifts, though underlying demand fragility lingers.

Policy engine drives demand

The national "trade-in" initiative proved instrumental in revitalizing big-ticket purchases. Household appliance sales soared 53.0% year-on-year—a 14.2 percentage point acceleration from April—while telecom equipment surged 33.0%. Furniture and stationery, buoyed by the policy, contributed 1.9 percentage points to headline growth, up 0.5 points from April.

Seasonal catalysts amplify gains

Two transient factors further lifted May’s figures, according to Huachuang Securities:

1. Major e-commerce platforms launched annual "618" festival promotions on May 13—earlier than historical cycles—pushing online retail growth to 8.2% year-on-year, well above the 5.8% January-April average.

2. Additional statutory holidays boosted consumption demand, with May containing 12 rest days versus 10 in 2024. Catering revenue growth accelerated to 5.9%, while alcohol sales increased 11.2%, both notably outperforming year-to-date trends.

Beneath the headline strength, non-subsidized segments weakened. Building materials, gold, jewelry, and other discretionary categories slowed materially. While trade-in policies drove white goods and furniture sales, the National Bureau of Statistics noted that these targeted sectors accounted for virtually all net growth contributions.

The May rebound offers temporary relief to policymakers but underscores the economy’s continued reliance on state support. "The numbers demonstrate stimulus efficacy when precisely targeted," said Zhang Wei, chief economist at Orient Securities, "but self-sustaining consumption recovery requires broader income growth and confidence building." As trade-in subsidies gradually taper and calendar effects normalize, June data will test whether China’s consumption engine can maintain momentum absent extraordinary supports.

China’s E-Commerce Festival evolution: simplification and premiumization

Trend 1: The "Decomplexification" Mandate

This year’s 618 festival marked a strategic pivot toward simplicity, replacing layered discount mechanics with a straightforward 15% instant price cut across participating products. The shift addressed systemic flaws in legacy promotion structures: Complex coupon stacking previously incentivized consumers to bundle unnecessary purchases for discounts, then return unwanted items – distorting brands’ operational metrics. Industry sources noted luxury retailer Ralph Lauren suffered a over 90% return rate during 2024’s Double 11 festival under traditional rules, severely damaging inventory efficiency and profit margins. By eliminating artificial purchase thresholds, platforms aimed to boost genuine purchase intent while reducing costly post-festival returns.

Trend 2: Douyin’s Strategic Pivot Toward Premium Brands

The short-video platform leveraged its upgraded ecosystem to capture high-value shoppers. Based on BigOne Lab's data, global beauty leads growth: International prestige labels (+21% YoY GMV) dramatically outperformed domestic brands (+12%) on Douyin in May. High-ticket leaders La Mer (+66% YoY) and SK-II (+97% YoY) drove outsized gains as Douyin prioritized exposure for luxury segments.

Per Jumeili, international beauty giants are increasingly topping charts, echoing the 2018–2020 Tmall Double 11 shift from domestic to international brands. An insider explained that as platforms stabilize, pioneers like domestic and emerging brands clear the path. Platforms and top influencers then favor big spenders—international groups with strong brand power and budgets, which proves more cost-effective and reliable amid limited traffic.

Another source noted that international brands, having learned from Chinese brands' Douyin success, are adapting to online rules and gaining traction, causing ranking shifts. Liu Bin added that Douyin's media-ad model and algorithm allow rapid brand virality and bestseller boosts, especially during promotions. With consistent investment and solid operations, international beauty giants remain highly competitive across platforms.

Trend 3: Price wars are giving way to merchant support and collaboration

Platforms are rolling out support for merchants. On May 29, Douyin announced that as of June 6, it will reduce the cost of freight insurance for eligible merchants/creators by 5%–15% below the regular price. This initiative is expected to save merchants over 10 billion yuan in operating costs over the next year. Meanwhile, during the 618 shopping festival, major platforms such as Taobao and Tmall are shifting from competition to collaboration. Taobao and Tmall have introduced a “pre-order after sold-out” feature, allowing consumers to pre-order sold-out items. Sellers can gain an additional 7–10 days for shipping based on the number of pre-orders, providing them with a longer timeline for delayed payments while ensuring consumers don’t have to wait too long during promotions.

Additionally, this year’s 618 shopping festival has seen less rivalry among major platforms, with a shift from “competition” to “collaboration”. Taobao and Tmall are deepening their integration with Xiaohongshu by adding an “ad link” feature to Xiaohongshu notes, allowing users to jump to the Taobao app for purchases. JD.com is now accepting Alipay and integrating its logistics with Taobao and Tmall systems. WeChat also enables direct link openings for Taobao and Tmall to place orders.

In the following content, I will break down the performance of the four major e-commerce platforms, including Tmall (BABA), JD.com (JD), Douyin (unlisted), and Kuaishou (1024.HK), during this year's 618 shopping festival. I'll also provide an early glimpse into the Q2 results (based on April-May data). These insights are exclusively available to our paid subscribers.

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While investors continue to question the strength of Chinese consumption amid lingering deflationary pressures, it's ironic that some of the best-performing stocks in the past year have been in so-called “new consumption” — discretionary consumer brands that resonate deeply with Gen Z and younger demographics.

They’ve even outshone China’s media darlings of 2024 — the “Six little dragons,” a group of Hangzhou-based AI startups led by DeepSeek. But in the secondary market, the real winners are arguably the “Three sisters”: a trio of such new consumption brands that have surged on the Hong Kong Exchange — Mixue, Pop Mart, and today’s spotlight, Laopu Gold. (We’ve written about every one of them over the past year.)

This is exactly why “new consumption” deserves attention — not as a macro beta play, but as a hunt for alpha. It’s about finding those rare, structurally advantaged opportunities that can deliver outsized returns and long-term growth in China. And that’s what this newsletter series is about.

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Today, let's talk about Pop Mart -- but not through a DCF model. To understand the billion-dollar secret behind Pop Mart, you don’t need a calculator—you need to understand the strange, obsessive psychology that drives a global frenzy for a mischievous, buck-toothed creature named Labubu, a toy that has A-listers like BLACKPINK's Lisa, Rihanna, and even the Beckham family clamoring for more.

The company's rise began quietly back in 2024, while most headlines were still focused on China’s “gloomy macro.” Suddenly, Pop Mart became one of the best-performing Chinese stocks, and more surprisingly, one of China’s most successful “going global” stories. At one point, some even called it the next Disney. In the face of that ambitious goal, the CEO answered with an even bolder vision: "We hope that people don't call us China's Disney, but one day, the world's Pop Mart."

Since we first spotlighted it in our newsletter last August, Pop Mart has jumped over 590%. But when any stock moves that fast, skepticism kicks in. Investors — myself included — began to question the business model. After all, how can a company selling plastic toys with no backstory command this kind of market attention?

What is Pop Mart

Calling Pop Mart a plastic toy company, like aforementioned, is probably unfair.

Last week, I wrote about Laopu Gold, another rising star among China's "new consumption" brands, and explained why it's not a real luxury brand, despite comparisons to China's Hermès.

In contrast, Pop Mart looks much more like the real thing. Its margins were ~60% in 2023 and ~67% in 2024 — right in line with international luxury houses like Hermès (~70%) or LVMH (~67–68%).

And yet, it sells plastic toys, not precious metals.

So how does Pop Mart achieve luxury-like margins?

Pop Mart sells mystery boxes, or blind boxes — a type of product where the buyer doesn’t know which figurine they’ll get until they open the box. That Schrödinger mix of surprise and disappointment is the secret that hooks consumers. It keeps them coming back, again and again, to complete a set, or to chase that one favorite design edition.

Pop Mart has rallied more than 200% year-to-date, but debates are swirling: is this another short-lived bubble, or the real deal — a sustainable, global brand in the making?

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Three debates & possible misconceptions

1. People just buy out of curiosity for the mystery box model. That novelty will fade.

The business model isn’t new. Pop Mart didn’t invent the blind box — it originated in Japan and has been popular for decades in China.

Most Chinese born in the '80s and '90s remember collecting cards or badges from Japanese anime. Just like Pop Mart, those collections had hidden rares that kept people buying repeatedly. (Even if one wasn't personally into it, chances are one had a classmate who was obsessed). For many, it was like how the previous generation born in the 60s and 50s in China collected stamps or commemorative coins — not just for fun, but with obsessive dedication.

Pop Mart's core product is hardly new, but the 87s-born CEO has grown up to make Pop Mart the first public company that has pushed such a model to extreme success. This sets it apart from numerous other private companies that have been pursuing similar models for the past decade, though none of these rivals have become as renowned as Pop Mart.

Pop Mart has been selling to a consumer base that has largely been present.

2. Why would anyone buy a toy with no story behind it? Isn’t that just mindless hype that will die down?

This was my biggest hesitation with Pop Mart last year. I couldn’t sympathize with people who would spend so much on a doll with no backstory.

Then, early this year, a good friend challenged me: “Weren’t you obsessed with Lina Bell too? How were you different from the people you claimed to be completely out of their minds?” (Lina Bell, Disney's pink fox IP, became hugely popular in China. The character was so sought-after that during pandemic lockdowns, people anecdotally traded food for Lina Bell dolls.)

She had a point. LinaBell, the pink Disney fox with the persona of a "curious detective," went viral in China, but has absolutely no movie, no show, no books — just vibes. I’ve always considered myself rational enough to resist commercialism, yet I bought 20 LinaBells. That’s when I immediately realized: just because we can’t relate to someone else’s pleasure — which is inherently subjective — doesn’t mean their affection isn’t real.

The same goes for BE@RBRICK, the Japanese-designed figurines with bear-like heads and modular bodies. No storyline, yet collectors in China went wild over limited editions, paying thousands of dollars. At one point, these collectibles were even seen as a symbol of affluence, just like a luxury Chanel or Hermès bag.

There are plenty of other examples. IPs with no storylines have been trending in China for years.

I came to realize that for many buyers, a storyline isn’t necessary. In fact, the absence of one might make these characters even more appealing. You can project anything onto them — your personality, your mood, your values. It will never go out of its character (unlike many human idols who might one day upset their fans).

Labubu, Pop Mart’s current superstar IP, is a perfect example. Our friend Yaling Jiang wrote an excellent piece in her newsletter Following the Yuan that explains this phenomenon: Labubu is intentionally ambiguous — genderless, raceless, expressionless. You can’t tell if it’s happy, sad, cheeky, angry — or even what animal it’s supposed to be. That ambiguity makes it universally relatable. With no fixed identity, anyone can see themselves in it.

3. Labubu’s resale prices are insane — this must be a Ponzi.

It does look wild: some Labubu figures now resell at 30x their original price on second-hand platforms.

The most extreme case was a recent auction at Yongle on June 10 — China’s premier auction house specializing in classical and contemporary Chinese art — where a minty green Labubu sold for a whopping 1.08 million RMB.

So it’s reasonable to ask: Is this only hype around manufactured scarcity?

Even if the affection is understandable, spending 30 times the original price to get one on the second-hand market? The utility just doesn’t add up. (This was my second hesitation with Pop Mart.)

At one point, I wondered if people were only buying them out of a sense of vanity driven by perceived scarcity. That may be true for some. But when you actually observe how people engage with these toys, you start to see something different.

For instance, last night, after dinner with a friend, we accompanied her little sister—who just turned 19—to wander around a shopping mall. She ended up buying seven mystery boxes in one evening (not Pop Mart, though). When she opened the one with her favorite figure (I thought it was a penguin with blue hair; I'm too old to tell), the smile on her face was so genuine that I realized I hadn’t seen that kind of joy in a while, at least not among people in my own circle (unfortunately).

After leaving the mystery box store, I saw around twenty young girls sitting just outside the mall, sorting through their purchases and hoping to trade the figurines they didn’t like for ones they preferred. When they spotted my friend’s little sister, they casually said hi and asked if she wanted to trade. What followed was a cheerful exchange of thoughts on why each of them loved—or didn’t love—a particular character.

That was the moment I understood: while the appeal of collecting figurines may not resonate with me personally, it offers genuine joy to its enthusiasts. In a nation of 1.4 billion, it only takes one "compulsive collector" per thousand people to create a formidable consumer market the size of a small country.

I chatted with her a bit. She owns a sizable collection of limited-edition figurines (which is also common among her friends), and some have tripled or even quadrupled in price since she bought them, but she never considered selling. Utility was never part of the equation.

And going back to Labubu, I tried to put myself in the shoes of those who love it — and honestly, why not? To some, it might look “ugly” in a harmless, almost goofy way. But those who love it, love it unconditionally — without needing a reason or utility to justify it. Isn’t that exactly the kind of emotional value many grown-ups are missing in today’s society?

It’s also become a form of self-expression. There's now a whole new "industry" around making clothes for Labubu — and it's actually a profitable niche in China. On Red Note, tons of creators handcraft outfits for it and sell them for premium prices.

As I see it, Pop Mart taps into what psychologists call simple pleasures — small, immediate sources of joy that give us emotional relief in an otherwise stressful, hyper-performative world. Our lives today are overly curated, too polished. We’re constantly managing impressions and optimizing outcomes. But Labubu, with its “rough beauty” — a face many say is ugly — offers a kind of freedom. It’s weird, unapologetic, and doesn’t ask to be understood. That in itself is relaxing. It lets people project their quirks, moods, even frustrations onto it.

(But of course, this is me trying to rationalize others' affection. I would love to hear what my audience genuinely feels about Labubu, especially the non-Chinese consumers.)

Even if, at the end of the day, it’s just the pursuit of vanity — isn’t that still a genuine emotional need of being human that can be monetized?

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Signs of overheated hype

That said, there are definitely signs of overheating.

At this point, quite a lot of opportunists have already made a living by selling second-hand Labubu figures online. Scalpers are pulling all-nighters to wait for the store's opening, and using technology, like automated scripts, to secure products immediately upon release. They’re just hype riders, acting purely out of speculation.

Others don’t even like it but buy it as a safe gift option — a kind of social currency, especially after celebrities started posing with Labubu next to their luxury bags.

Yesterday, I noticed that all the second-hand luxury stores in my neighborhood had replaced their Hermès and LV displays with Labubu figures in their storefront windows. Later that evening, I passed a Pop Mart vending machine where two guys were being pulled apart by security — one of them looked like a scalper trying to hoard the last boxes of Labubu, except they were already sold out.

So yes, it’s overheated.

These are hype chasers — and they’ll be the first to exit when the buzz dies down. What’s more concerning is that hype chasers are starting to outnumber the genuine fans, creating artificial scarcity in the market.

How is Pop Mart doing so far? A look at our tracked sales data

The real question isn't whether the mystery box model or IP monetization is sustainable — it likely is, because these business models have existed for decades. What really matters is whether Pop Mart can continue launching new hit IPs in the long run — or even expand into content creation and develop stories that deeply resonate with people, like Disney did.

Some claim Pop Mart is nothing more than a capital-manipulated scam, which is bound to fade eventually. And sure, that’s not entirely wrong. But to some extent, every idol—whether human or virtual—is some combination of creativity and capital operation. Most will fade eventually. But that doesn't mean they can’t bring genuine joy to fans (and return on investment) in the meantime.

In many ways, Pop Mart operates just like an idol agency in the entertainment industry. Each figurine has a limited lifespan, and the company needs to constantly scout and “train” the next superstar.

From that perspective, Pop Mart’s model isn’t new. It blends three well-established concepts: mystery box mechanics, IP fandom, and heavy marketing. What is new is that Pop Mart is the first company to successfully package this model for the capital markets — a space where, percentage-wise, more people follow an analytical mindset and tend to prioritize rationality and utility. That’s precisely why some may have initially overlooked Pop Mart’s rally — myself included.

Earlier this year, I seriously considered shorting Pop Mart. But if your short thesis hinges on the idea that people will eventually wake up and realize they're paying for "plastic with no value," you might want to think twice.

My personal view is that I wouldn’t go long Pop Mart right now — it’s too clear to assume that the company can sustainably produce IPs as successful as Labubu going forward. At current prices, the risk-reward just isn’t compelling.

To be honest, I still don’t personally buy into this business model for the long run (if no further product/content innovation)— it could end up like another BE@RBRICK or celebrity-backed NFT. That said, shorting it outright is risky too, because the hype doesn’t seem to be dying down anytime soon.

According to our tracked offline sales data:

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On the Dragon Boat Festival, I spotted Empress Wu Zetian throwing rice dumplings in a mural

In a Sogdian mural from the 7th century in Samarkand, I spotted Empress Wu Zetian. Because she was so important, she was painted bigger than everyone else. In the mural, Wu Zetian and her crew were on a boat. A bunch of fish in the water were gathered around a center. Turns out, it was the Dragon Boat Festival, and Wu Zetian was tossing rice dumplings into the water to feed the fish. (The Dragon Boat Festival is all about commemorating the poet Qu Yuan, who drowned himself in a river. People throw food into the water on this day to stop fish from eating Qu Yuan’s body.) On the right side of the mural, a few cavalrymen were hunting leopards. It’s thought that Emperor Gaozong of Tang, Li Zhi, was hunting in the royal hunting ground.

As historians reckon, these murals were originally in the Sogdian king’s private residence. Apart from Chinese scenes, they also show envoys from different countries offering gifts to the Sogdian king. There’s even a wall that’s thought to depict India. To me, this royal private mural has a global perspective. It shows pride in their own culture and national might, as well as an imagination of foreign places.

In a miniature painting shop in Bukhara’s old town, the shop owner put down the brush used for coloring and looked up from the intricate paintings. We noticed a painting themed on the Silk Road. Starting from China, it went through Samarkand, Bukhara, Khiva, and finally to Venice. The Chinese representative figure was Zhang Qian from the Han Dynasty. Behind Zhang Qian, there was a three-story wooden building, which was a modern Uzbek folk painter’s take on what China might look like.

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Close trade ties: "I need to fly back to Almaty tomorrow because the governor of Jiangsu Province is coming," A Chinese businessman says.

We flew from Almaty, Kazakhstan, to Tashkent, the capital of Uzbekistan. Even before landing, it was clear that Uzbekistan and China have a close partnership. On the flight, there were many Chinese merchants and workers traveling in groups. It was easy to tell them apart: the merchants were usually in business suits and carrying laptop bags, while the workers wore work clothes; some carried a large bag of naan bread, and others had paint splatters on their trouser legs.

The man sitting next to my friend said he worked in supply chain management for a Chinese state-owned enterprise. He proudly showed my friend photos of his company's dormitories and cafeteria. He also mentioned that he had to fly back to Almaty the next day because the governor of Jiangsu Province was coming for a visit.

When we arrived at the airport, the sense of close cooperation was even stronger. The airport signs had Chinese translations, and there was a billboard in the walkway advertising the "UZ-China Silk Road Free Trade Special Zone."

As the taxi sped along the highway into the city, I could tell where the Chinese workers from the plane were headed. Chinese cargo and work vehicles were everywhere on the roads.

Strolling through Samarkand's alleyways, a man greeted us with a smile and asked in Chinese, "Are you Chinese?" After some chat, we learned he was from Xinjiang, doing trade here. As a Hui ethnic, he said Xinjiang and Central Asia share similar languages, and he's now settled in Uzbekistan.

While we didn't meet any locals in Uzbekistan who'd been to China, in Kazakhstan, we met a Kazakh girl with fluent Chinese. We joined a day tour to the lakes and canyons near Almaty. With many Chinese tourists in our group, she translated for us when we couldn't understand the guide. She studied in Chongqing(*) and worked in Yiwu, Zhejiang province (*), where her Chinese boss ran a company exporting goods from China to former Soviet countries like Moscow, Azerbaijan, and Central Asian cities.

This made me feel that trade between China and Central Asia is largely a one-way flow, from China to Central Asia, with China's economic influence in the region being substantial.

*Chongqing is a bustling metropolis famous for its spicy hotpot and hilly landscape, while Yiwu is a global trading hub renowned for its massive wholesale market of small commodities. A fun fact: Yiwu International Trade City is the largest small commodity market in the world, exporting over 20,000 types of Christmas products to more than 100 countries, with Europe and the Americas being the primary markets.

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Three stories about the consumer market: "Pants bought on Pinduoduo," "The best Li-Ning," and Chinese-style cosmetics never seen in China

A young man on the subway slapped his thigh and said, "These pants are from Pinduoduo." On the metro, a young man offered us his seat, saying, "A man with good manners will never let ladies stand." So we chatted, and he shared his love for shopping on Pinduoduo. He said the same items there cost 1/7 to 1/6 of local prices in Almaty. Even with a $3–4 delivery fee, it's still cheap, and delivery takes about two weeks.

Why are prices in Almaty so high? One reason is the Russia-Ukraine war. Our art-history student guide, a 26-year-old Kazakh girl, explained that many Russians have moved to Almaty to avoid military service. This influx has disrupted the housing and consumer market, pushing prices up. I asked if these newcomers were mostly wealthy, but she said no—they're mostly ordinary people; the wealthy go to "better" places.

Interestingly, when asked if locals can spot Russians, everyone said, "Of course! Their speech (though both in the Russian language) and dress are so different."

Anta, Lining, and Xtep stores in Tashkent's most modern shopping mall

At the Tashkent City Mall, the premier shopping destination in Uzbekistan's capital, I was surprised to find stores for well-known Chinese sportswear brands Anta, Li-Ning, and Xtep all located in close proximity.

I decided to explore the Anta store first. Picking up a pair of PG 7 running shoes (the PG 7 refers to the midsole technology), I noticed the price tag read 1,103,000 Uzbekistani som (approximately 612 Chinese yuan, US$87), which is significantly higher than the price in China (where it's around 200-300 yuan, US$29–43 on Tmall). However, the store currently has a promotion: buy one pair and get the second at 50% off (effectively 459 yuan per pair, US$66) or buy two pairs and get the third free (bringing the cost down to 408 yuan per pair, US$58). Even with the discounts, the price is still higher than in China. When I asked the store manager if Anta is considered a premium brand in Uzbekistan, he confirmed it is. Surprised, I inquired if only the wealthy can afford it. He explained that due to the popularity of digital payments, many people, especially the youth, opt for installment plans.

Buying Anta on installment? This reminds me of when Starbucks and Häagen-Dazs entered China. Back in my student days, sipping coffee at Starbucks or indulging in Häagen-Dazs was worth a social media post. Contemplating their current status in China makes me reflective...

Li-Ning’s store was bustling with activity due to its attractive discounts. New products like Soft Cool and Soft Go, priced at around 1,108 yuan (US$162), are much higher than in China (250–350 yuan, or US$35–49). But with a buy-one-get-two-free offer, the effective price drops to about 369 yuan (US$51), a better deal than Anta’s.

A staff member, an 18-year-old boy, said such discounts are rare, mainly for promoting new items. Li-Ning has 10 stores in Tashkent and is still expanding. Chatting with him, he shared that he prefers Li-Ning shoes for their unbeatable quality. When asked about other brands, he mentioned wearing New Balance replicas (originals are too pricey), highlighting Chinese brands’ edge of offering great value at low prices.

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Chinese goods, yet nowhere to be found in China?

Another odd thing is that Central Asia has many Chinese-made beauty and skincare products that aren't available in China.

An example is "Shanghai Song," with packaging featuring a classic Chinese vintage design. The brand's slogan states: "Inspired by myths and legends, it's about Shanghai in the Song period, which ruled one of China's most glorious cultural eras in the long-flowing Eastern cultural river."

I found this puzzling. First, the specific myths or legends that served as inspiration aren't clear, giving it a mysterious and abstract feel. Second, to the best of my knowledge, during the Song Dynasty, the economic and cultural centers of the Northern Song were in Kaifeng, and those of the Southern Song were in Hangzhou, not in Shanghai. Perhaps "Shanghai Song" represents a blend of the modern and the classical, or maybe the company behind the brand has a special affection for Shanghai.

When I picked up a bottle of cream and examined it closely, I found that the company is based in Guangzhou. Well, it's likely that "Shanghai Song" is a brand from Guangzhou that embodies what Chinese people think Central Asians imagine about China and the East.

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International trade is not a broad and smooth road, but a complex web

As researchers and data analysts, we're trained to focus on major contradictions and key factors, often overlooking minor elements. These key factors may be large countries, industries, or companies. People tend to focus on grand narratives, like the US-China rivalry, where Central Asia rarely features in it. But on visiting Central Asia, I saw how trade permeates everyday life, much like water seeping into every corner, and how commerce and products influence ordinary people's lives.

Our imagination of the Silk Road often depicts it as a broad, flat continent. In reality, it's a vast network of countless paths and stations. We tend to think of Silk Road trade and traders as large-scale and high-value. However, this isn't always the case. In the preface to the book From Dunhuang to Samarkand, it's mentioned that Chinese archaeologists discovered an ancient tomb near Turpan. Inside, they found a document recording the testimony of a Hu merchant living in China around 670 AD. The merchant asked the court to help him recover 275 bolts of silk owed to his deceased brother. This case reveals that actual trade volumes on the Silk Road were quite small. In this instance, just seven animals carried all the merchant's goods, including two camels, four oxen, and a donkey.

History is woven from countless minor events and overlooked characters. Without visiting Central Asia yourself, it's easy to mistakenly view history and global dynamics as simplistic and grandiose narratives.

On the last day of the trip, we were looking for the museum in Tashkent that houses the world's oldest Quran. Most of the area was cordoned off for renovation, making it hard to find. Suddenly, we passed several stacked containers, one of which read "China Shipping Group". Uzbekistan is a doubly landlocked country, meaning it has no sea access, and neither do any of its neighbors. It's one of the countries farthest from the sea. One can only wonder how the container of China Shipping Group made its way here.

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