Is consumption really 'downgrading'? Or are we 'asking the wrong question'? Over the past year, 'sluggish consumption' has become a high-frequency term in observations of China's economy. From statistics to the streets, from national consumption-boosting policies to the performance anxiety of companies and brands, almost everyone is asking: 'Do consumers have no money?' But if we broaden our perspective and look at it from a more systematic angle, the answer may not be so simple. We observe a more fundamental trend: This is not 'no money,' but 'no feeling.' It's not that consumers lack spending power, but that supply fails to touch their hearts.

  • On one hand, we have the richest and most convenient supply of goods in history;
  • On the other hand, users are increasingly 'hard to move' and increasingly 'Buddhist-like' (indifferent). In other words, it's not that 'consumers can't afford to consume,' but that 'there's nothing worth consuming.' The underlying logic of this structural mismatch can be re-examined from two dimensions: 'supply vs. demand.' The diagram below is a simplified model that attempts to reveal the true root cause of the 'cooling of consumer desire' in China's consumer market: This model reveals a core issue: 'Consumption' is merely the intersection of supply and demand, and we are in an era where this intersection is shrinking. The structural transformation China's consumption is undergoing To understand the 'cooling' of consumption, we must first see what fundamental changes are happening to consumer 'demand' itself. This is not simply 'reduced income' or 'weakened expectations,' but rather—users' consumption motives, goals, and value expectations have fundamentally 'shifted.' This change can be broken down into three dimensions: 1. From 'satisfying material needs' to 'expressing self': demand is rapidly shifting to higher levels In the past few decades, the main theme of Chinese consumption was 'satisfaction'—satisfying basic living needs, functional needs, and cost-effectiveness. But now, as the material foundation for survival and security is gradually improved, the main consumer groups (especially the middle class, new youth, urban white-collar workers, and self-pleasing women) are shifting to the levels of 'esteem' and 'self-actualization.' This is the manifestation of higher-level needs in Maslow's hierarchy:
  • They no longer just buy 'useful things,' but hope to buy 'symbols that express attitudes';
  • They no longer just solve the problem of 'having or not having,' but care about 'Is this my style?' 'Will others approve of me?' 'Does it resonate with my life stage?' We see that consumer behavior is shifting from 'rational task-oriented' to 'emotional resonance-oriented.' This also explains why many classic brands have suddenly 'failed,' while some new brands with delicate expressions in visuals, language, and social circles are quickly embraced by young people. 2. From 'mass commonality' to 'circle segmentation': demand is showing a trend of differentiation and fission Today's consumer society is no longer an 'era of egalitarianism.' With enhanced information access and diversified lifestyles, consumers have formed distinct 'subcultural communities' and 'value-oriented circles': Consumption is no longer a 'unified market,' but a juxtaposition and competition of multiple 'micro-markets.' Only by accurately identifying the 'jobs to be done' and 'emotional channels' of a circle can a brand hit the mark precisely. 3. From 'result consumption' to 'process participation': users expect 'experiential co-creation' Consumers in the new era are increasingly dissatisfied with just 'purchasing behavior,' but pursue participation, creation, and resonance:
  • They hope to be part of product design (e.g., customization, beauty try-on, user voting decisions);
  • They hope brands are not just 'transaction providers,' but also 'lifestyle organizers' and 'value communication carriers';
  • They are willing to actively spread interesting, meme-worthy, and attitude-driven brands, but refuse rigid, one-way, preachy advertising. Consumption has evolved from a linear closed loop to an extendable emotional cycle. This means that in the future, brands are no longer 'producers and advertisers,' but must become entities that can stimulate 'cultural connection' and 'community resonance.' Essentially, what we are experiencing is not 'consumption downgrading,' but a paradigm shift in consumption motives. Consumers are no longer satisfied with 'having'; they need 'recognition'; they are not just 'buying a thing,' but 'becoming a certain kind of person.' And this is precisely the key that most brands, platforms, and even policies are currently overlooking. The collective mismatch on the supply side: Why can't we sell the products we make? In today's Chinese consumer market, there is an extremely ironic phenomenon: we manufacture more goods than ever before, but consumers' purchasing impulse is lower than ever. This is not a problem of supply quantity, but a mismatch between supply structure and consumption motives. The vast majority of enterprises are still using the old paradigm driven by 'function + price' to design products and do marketing, completely ignoring that users have entered a new era driven by 'emotion + value recognition.' We have summarized four typical manifestations of mismatch on the supply side: 1. Functional-oriented inertia: only 'solving problems,' not 'stimulating desire' Many enterprises still define product competitiveness by 'whether the function is strong,' 'whether performance is stable,' and 'whether the price is cheaper.' This logic was understandable in the 'era of material scarcity,' but in the face of today's user mindset of 'material surplus + attention scarcity,' it no longer works.
  • Today's consumers are not unaware of these products;
  • But they have no reason to 'must buy.' It's no longer enough to solve problems; you must solve 'users' emotions' and 'identity anxiety.' 2. Decision-making is still based on 'past data,' not 'future insights' Many brands still rely on historical sales data and channel sell-through data to make product selection, advertising, and supply chain decisions. The problem is—data can only tell you 'what happened,' but cannot tell you 'what hasn't happened yet but is about to explode.' Future supply must be driven by 'task insights' and 'emotional prediction':
  • Not who buys more, but who is 'secretly searching' but not yet satisfied;
  • Not who has high repurchase, but who has strong unmet expectations at the 'spiritual level.' If you don't update your decision-making model, enterprises can only chase trends, never create them. 3. Content and expression failure: brand language cannot penetrate user minds In new content ecosystems like Douyin, Xiaohongshu, and Bilibili, many brands still use 'standard scripts,' 'slogans,' and 'traditional selling points' for communication. The result is—users simply don't buy it, and algorithms don't give traffic. Why?
  • You speak 'product language,' but users want 'life language';
  • You talk about 'superior performance,' but users want to hear 'what do you have to do with me?' Content expression is undergoing a 'language shift': From 'what I am' → 'who you are' → 'what do we have in common' A brand's expressiveness determines whether supply can be 'emotionally recognized' and thus converted into consumption action. 4. Weak trust mechanisms: even if you move them, it's hard to convert Even if your product hits the emotional chord, sometimes it still doesn't sell—because of the lack of a trust path. Modern consumers are full of interest in 'new brands,' 'internet-famous products,' and 'co-branded IPs,' but also full of vigilance. They need 'verification mechanisms' to reduce decision anxiety. The problem is that most brands are extremely crude in trust mechanisms:
  • Lack of real user usage scenarios;
  • Lack of high-trust endorsement carriers (influencers/communities/stores);
  • Lack of after-sales and service systems to support 'secondary conversion.' Without a 'weak-center trust network,' even if your supply is precise, you cannot complete conversion smoothly. We are not incapable of making products, but 'incapable of making products that move people's hearts.' To upgrade from 'product thinking' to 'value thinking,' the supply side must reconstruct the following three capabilities: Five-Quadrant Model: Redefining Consumer Behavior and Supply-Demand Relationships To understand the fragmentation and cooling of the current consumer market, it is far from enough to rely solely on a single-dimensional 'demand' or 'supply' perspective. What can truly penetrate the essence is: the reconstruction of supply-demand matching structure. We take the hierarchy of consumer needs as the Y-axis and the market supply capability as the X-axis, constructing a two-dimensional matrix analysis framework to locate the supply-demand status of different categories, brands, and scenarios: The diagram divides the current consumer market into five core quadrants, each representing a typical 'supply-demand structural relationship' and 'market performance characteristic.' Quadrant 1: Shrinking Zone (low supply × low demand)
  • Representative formats: township small general stores, cheap appliances, outdated home decoration, non-standard industrial products
  • Typical characteristics: consumers are indifferent, brands lack innovation, market has no growth
  • Market performance: stock competition, severe involution, continuous outflow of capital and attention
  • Brand strategy: retreat + consolidation + slimming down This quadrant is the 'consumption freezer zone,' with both supply and demand low. It is the main battlefield for elimination and compression, and sustained investment is not advisable. Quadrant 2: Opportunity Zone (low supply × high demand)
  • Representative tracks: mental health, silver economy, men's skincare, children's nutrition products
  • Typical characteristics: strong user demand, but few supply options and high trust barriers
  • Market performance: demand explosion, heated content discussions, but brand supply is extremely unsystematic
  • Brand strategy: first movers reap the dividends This is the 'value gap zone' for structural opportunities, ideal for entrepreneurship, brand breakthroughs, and niche boutique brands to break out. Quadrant 3: Involution Zone (high supply × low demand)
  • Representative tracks: white-label snacks, basic personal care, fast-food chains, live-streaming low-price bestsellers
  • Typical characteristics: price-sensitive, low demand elasticity, severe user fatigue, high homogeneity
  • Market performance: worsening price wars, heavy channel dependence, high conversion costs
  • Brand strategy: reduce volume + restructure + seek emotional added value This is the representative quadrant of 'fake growth': although sales exist, there is no profit, no brand loyalty, and no user emotional identification. Quadrant 4: Main Battlefield (high supply × high demand)
  • Representative tracks: functional beverages, pet economy, self-pleasing beauty, maternal and infant necessities
  • Typical characteristics: strong supply and demand, extremely fierce competition, high brand-building barriers
  • Market performance: high-frequency bestsellers, stable repurchase, IP competition dominates
  • Brand strategy: systematic approach + brand moat construction + content strategy This is the 'main battlefield' of the consumer market, with huge opportunities, intensive resources, and the most severe involution. Survival depends on 'system capability.' Central Intersection Zone: Consumption Stimulation Zone (perfect supply-demand match)
  • Representative phenomena: a few super brands that truly achieve 'resonant supply'
  • Typical characteristics: precisely hit consumer tasks and emotions, forming high stickiness
  • Market performance: high word-of-mouth, high premium, high fission, low returns
  • Brand strategy: build a user co-creation business model This is the true 'brand singularity zone,' with the potential to transcend cycles, and it is also the target area for brand reconstruction. Strategic Choices for Enterprises in the Five Quadrants: The significance of understanding the five-quadrant structure is: Don't ask 'Is there still an opportunity in this category?' but rather 'Which quadrant is this category in? Is its supply-demand structure still healthy?' Brand Reconstruction Task Map: How to 'Recreate Resonance'? Task 1: Reconstruct User Insight — From 'Demographic Profiling' to 'Job-to-be-Done Identification' Root of the problem: Most brands remain stuck on surface-level profiles like age, gender, and income, unable to deeply identify users' true purchase motives and psychological paths. Reconstruction direction: Upgrade user understanding from 'who you are' to 'what you want to solve,' i.e., the 'job-to-be-done' perspective. Implementation methods:
  • Use 'event + emotion' for user segmentation: e.g., 'the need to unwind after overtime,' 'anxiety relief on the way with kids'
  • Build a 'demand map' + 'scenario task map'
  • Establish a cross-departmental insight mechanism (market + content + product co-creation) Task 2: Reconstruct Product Structure — From 'Functional Benchmarking' to 'Emotional Supply' Root of the problem: Product logic is still 'what I can do,' not 'why users need me.' Reconstruction direction: Shift from satisfying functions to stimulating emotions, from technical feasibility to carrying emotional value. Implementation methods:
  • Three-level product development model: functional core → emotional shell → social fuse
  • Establish a 'differentiated SKU system': standard + emotional + limited co-creation
  • Optimize display and recommendation: strengthen scenario, matching, and symbolic sense Task 3: Reconstruct Brand Language — From 'Saying Who I Am' to 'Saying Who You Are' Root of the problem: Brand communication is still 'I am good,' not 'you deserve it.' Reconstruction direction: Brands should no longer be spokespersons, but empathizers, guides, and companions. Implementation methods:
  • Replace 'brand grammar' with 'user language': authentic, colloquial, life-oriented
  • Strengthen 'symbolic design': visual anchors, emotional markers
  • Build brand stories from user stories in reverse: resonance > persuasion Task 4: Reconstruct Trust Mechanisms — From 'Brand Endorsement' to 'Weak-Center Social Trust' Root of the problem: Users don't trust ads, nor do they easily trust planted content; they trust 'users in their circle.' Reconstruction direction: Build a 'decentralized trust network': real users + weak-tie diffusion Implementation methods:
  • Select real user seeds to start private domain or KOC deep co-creation
  • Strengthen the 'trust bridge' on platforms like Xiaohongshu, Bilibili, and Douyin
  • Build offline trust points: experience stores, sales guides, community activity scenarios Task 5: Reconstruct Platform Collaboration — From 'Advertising Space' to 'Co-creation Ecosystem' Root of the problem: Platforms are seen as traffic venues, but their user relationship field and content co-creation value are overlooked. Reconstruction direction: Shift from 'traffic transactions' to 'user asset co-building' with platforms. Implementation methods:
  • Co-build user data assets with platforms for long-term user value operation
  • Initiate 'content co-creation tasks': users/influencers participate in brand narrative together
  • Use platform scenarios to create brand lifestyle experiences (e.g., Douyin Life Festival, Xiaohongshu IP activities) Brand reconstruction is not 'changing a batch of copy,' but 're-doing the brand's underlying protocol.' The five tasks are interconnected, forming an evolvable brand growth model: These are not marketing tactics, but strategic tasks for brand-side structural reform. Supply-Demand Reconstruction Is the Core Solution to Survive the Consumption Winter Today's China, consumption appears sluggish, but in reality, it is undergoing a profound 'structural transformation.' It's not that consumers can't afford to buy, but that what you offer 'is not worth buying'; It's not that spending power has truly disappeared, but that the original supply-demand logic has completely failed:
  • Enterprises are still stuck in the old thinking of 'price competition,' while users have entered a new era of 'value consciousness';
  • Brands are still playing the traditional combination of 'exposure + conversion,' while consumers already demand deep connections of 'resonance + trust';
  • Platforms are still talking about GMV and ROI, but what is truly scarce is 'sustainable relationship assets.' The real problem is not 'consumption downgrading,' but 'value degradation.' When the meaning of a brand no longer holds, when supply cannot reach people's spiritual level, when products are reduced to 'parameter stacking' and 'price wars,' consumption will naturally stagnate. This is the fundamental logic behind our proposal of 'supply-demand reconstruction':
  • From 'rigid push' to 'user task trigger'
  • From 'inventory bestsellers' to 'circle co-creation'
  • From 'platform advertising' to 'trust network'
  • From 'product transactions' to 'long-term relationships' True growth lies in 'deep user connections' In this era of uncertainty, the only asset a brand can be certain of is whether it has established an 'emotional supply-demand coupling' with users. Those brands that can understand people's real anxieties, real motives, and real desires will become the winners of the next cycle. They may not have the largest advertising budgets, but they will have the firmest user trust; They may not start with a splash, but they will eventually occupy a long-term place in consumers' minds. Three Era Reminders for Brand People

  1. Stop being a 'functional supplier'; you must become a 'provider of meaning';

  2. Stop staring at 'conversion rates'; you need to start paying attention to 'emotional recognition rates';

  3. Stop betting on 'bestseller dividends'; you need to build 'structural repurchase.' If 'supply-demand mismatch' is the root cause of this consumption winter, then 'redefining the supply-demand relationship' is the only path for all brands to break through. This is an era that seems cold but actually harbors enormous new momentum. It belongs to brands that understand people's hearts. Final Thoughts In the past, we always discussed 'consumption downgrading,' but the real problem has never been 'no money,' but 'no feeling.' Supply-demand mismatch is the underlying cause of the consumption cooling. When the values, consumption motives, and choice paths of the main consumer groups undergo fundamental changes, if brands and channels remain stuck in functional supply and price competition, they are destined to be abandoned by the times. China's consumer market is shifting from 'having or not' to 'worth it or not,' from 'who is cheaper' to 'who understands me.' The supply side must complete not just product upgrades, but a comprehensive reconstruction of 'user needs—consumption scenarios—value expression.' The 2025 China FMCG Conference is precisely for this purpose. With the theme 'New Demand · New Supply,' we have invited Hou Xiaohai, former Chairman of the Board of China Resources Beer (Holdings) Company Limited; Tao Shiquan, Chairman of Pingzi Planet Group; Du Guoying, Founder & Chairman of Xiaoguancha; Meng Fanzhong, Chairman of Biyoute; Li Jingyao, Vice President of China Resources Vanguard Group; Zhang Peiyan, Founder of Every Day Convenience Store, and other leading FMCG brands, retailers, distributors, and industry chain participants. Together, we will explore: In the midst of the major changes of demand paradigm shift, supply-demand relationship reshaping, and channel ecosystem fission, how can all parties in production, supply, and marketing find the next wave of certain growth paths? If you are also looking for answers, we'll see you at the conference. 🔺