---
title: "New Distribution Zhao Bo: The Curtain Has Risen on China's Third Consumption Era"
description: "By examining the evolution of the first two consumption eras, we can discern historical patterns and gain insight into the unique characteristics of the third consumption era. This marks the beginning of a new era and a sign of a mature society, where people's behaviors and needs have undergone profound changes. The narrative aims to be straightforward and simple, drawing on Japanese consumption research perspectives, combining cases and data to paint a comprehensive picture for China's FMCG industry. The first consumption era (1979-1999) was a time of transition from scarcity to basic material satisfaction, beginning in 1979..."
author: "赵波"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2025-01-02"
language: "en"
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---

# New Distribution Zhao Bo: The Curtain Has Risen on China's Third Consumption Era

> By examining the evolution of the first two consumption eras, we can discern historical patterns and gain insight into the unique characteristics of the third consumption era. This marks the beginning of a new era and a sign of a mature society, where people's behaviors and needs have undergone profound changes. The narrative aims to be straightforward and simple, drawing on Japanese consumption research perspectives, combining cases and data to paint a comprehensive picture for China's FMCG industry. The first consumption era (1979-1999) was a time of transition from scarcity to basic material satisfaction, beginning in 1979...

By examining the evolution of the first two consumption eras, we can not only see historical patterns but also gain insight into the present—**the unique characteristics of the third consumption era**. This is the beginning of a new era and a sign of a mature society, where people's behaviors and needs have undergone profound changes.
In terms of narrative style, we strive to be straightforward and simple, while drawing on Japanese consumption research perspectives, combining cases and data to paint a comprehensive picture for China's FMCG industry.

**First Consumption Era (1979-1999)**

**From Scarcity to Basic Material Satisfaction**

In 1979, China's reform and opening-up took its historic first step. The entire country was like a giant just awakening, exploring the path forward in the transition from a planned economy to a market economy. At that time, China's urbanization level was just starting, with less than 20% of the population living in cities. The vast majority still relied on agriculture, working day after day in the vast fields. The national per capita GDP was less than 500 yuan, and the economic gap between urban and rural areas clearly defined consumption levels—**in cities, black-and-white TVs and Forever bicycles were luxuries for a few families; in rural areas, the issue of food and clothing remained the core of most people's lives**. During this period, agricultural reform, like a trickling stream, gradually permeated the fabric of China's economy. The household contract responsibility system allowed farmers to see direct returns from their labor for the first time. Markets gradually opened, and more goods appeared at fairs, but overall materials remained scarce. Consumer demand was highly focused on the most basic survival needs, with food, cloth, and daily necessities accounting for most expenditures. The entire society was under a "thrift-first" consumption culture, where purchases of durable goods often required saving up, and planned and rational consumption became the mainstream.

> **1979-1989**
> Population: approximately 980 million in 1979, 1.13 billion in 1989
> Education level of main employed population: mainly junior high school and below
> Urban population ratio: approximately 19% in 1979, 26% in 1989
> National GDP: approximately 406 billion yuan in 1979, 1.7 trillion yuan in 1989
> Main economic structure: high proportion of primary industry, secondary industry gradually increasing
> Urban per capita income: approximately 343 yuan in 1979, 1,374 yuan in 1989
> Main drivers of national economy: agricultural reform, light industry development
> Main consumption structure: dominated by basic living needs, such as food and clothing
> People's consumption needs: meeting basic living needs
> People's consumption behavior: thrifty, highly planned
> Major consumer brands born: Feiyue, Forever bicycles, Butterfly sewing machines
>
> Iconic consumption events of the era: color TVs, refrigerators, and other home appliances entering ordinary households

Entering 1989 to 1999, China's economy moved towards a more mature stage under the push of reform and opening-up. With the acceleration of foreign investment inflows and the establishment of an export-oriented economy, China's GDP grew rapidly to nearly 9 trillion yuan in ten years, and per capita income rose to nearly 6,000 yuan. At the same time, the urbanization rate increased to 31%, with more people moving from rural to urban areas, and urban life gradually became more common.

> **1989-1999**
>
> Population: approximately 1.26 billion in 1999
>
> Education level of main employed population: increased proportion of junior high and high school graduates
>
> Urban population ratio: approximately 31% in 1999
>
> National GDP: approximately 8.9677 trillion yuan in 1999
>
> Main economic structure: increased proportion of secondary industry, tertiary industry beginning to develop
>
> Urban per capita income: approximately 5,854 yuan in 1999
>
> Main drivers of national economy: foreign investment, export-oriented economy
>
> Main consumption structure: increased demand for durable consumer goods
>
> People's consumption needs: pursuing a higher quality of life
>
> People's consumption behavior: beginning to pay attention to brands, consumption concepts gradually opening up
>
> Major consumer brands born: Haier, Lenovo, TCL
>
> Iconic consumption events of the era: 1998 housing system reform, rise of commercial housing market

**Main differences in consumption habits compared to the previous decade:**
**1. Shift from meeting basic needs to pursuing quality of life**
**2. Beginning to focus on brands and product quality**
**3. More open consumption concepts, willing to try new things**

During this stage, demand for durable consumer goods increased significantly. Refrigerators, washing machines, and other home appliances entered more and more ordinary households, and consumers began to shift from meeting basic needs to pursuing quality of life. At the same time, brand awareness gradually strengthened, and local brands like Haier, Lenovo, and TCL began to emerge in the market. The housing system reform was an important turning point in this period. In 1998, the rise of the commercial housing market made urban household consumption more diverse and also drove the development of related industries such as home decoration and home appliances.

**In the first consumption era (1979-1999), people's behavior and needs were centered on meeting "survival" needs. Consumer behavior mainly focused on purpose-rational behavior (e.g., purchasing basic necessities) and traditional behavior (e.g., fixed planned consumption habits).**

However, after 1989, people's incomes improved significantly, and consumption habits in this stage changed markedly compared to the previous generation. Consumers became more open-minded, willing to try new things, and their attention to product quality and brands also increased. **From meeting basic needs to pursuing quality of life, China's consumer society gradually shifted from a "survival" core to a stage that placed more emphasis on personal quality of life and convenience.**

**Second Consumption Era (1999-2019)**

**Moderately Prosperous Society and Diversified Consumption**

Entering 1999, China was in the midst of a wave of rapid economic development. After twenty years of reform and opening-up, the national GDP had exceeded 8 trillion yuan, per capita income had risen significantly, and more and more families began to shift from "survival" to "living." During this period, urbanization accelerated, with more people moving from rural to urban areas. The urban population ratio increased from less than 30% at the beginning of the reform to nearly 50%, and the consumption atmosphere in cities became increasingly vibrant.

The period from 1999 to 2008 was a critical time for China's consumption development. With sustained economic growth, GDP grew to approximately 31 trillion yuan in ten years, and the urbanization rate further increased to 46%. During this stage, the influx of foreign capital and the success of the export-oriented economy made coastal areas an important base for global manufacturing. The comprehensive advancement of industrialization enriched product variety and supply chains. At the same time, the rise of the internet changed consumers' shopping methods. In 2003, the launch of Taobao marked the beginning of China's e-commerce era. Online shopping gradually became a new consumption model, and consumers' choices became more diverse.

Consumer demand underwent a clear transformation during this stage. Increased brand awareness made consumers more inclined to choose products and services with quality assurance. The housing system reform drove the prosperity of the commercial housing market, and household demand for home appliances and furniture grew rapidly. Meanwhile, information consumption emerged, and the proportion of service consumption gradually increased. Companies like Alibaba, Tencent, and Baidu emerged as important brands of this period.

> **1999-2008**
>
> Population: approximately 1.33 billion in 2008
>
> Education level of main employed population: increased proportion of high school and college graduates
>
> Urban population ratio: approximately 46% in 2008
>
> National GDP: approximately 31.4045 trillion yuan in 2008
>
> Main economic structure: secondary industry dominant, tertiary industry developing rapidly
>
> Urban per capita income: approximately 15,781 yuan in 2008
>
> Main drivers of national economy: exports, investment, domestic demand
>
> Main consumption structure: rising proportion of service consumption, emergence of information consumption
>
> People's consumption needs: pursuing personalization and diversification
>
> People's consumption behavior: increased brand awareness, beginning to shop online
>
> Major consumer brands born: Alibaba, Tencent, Baidu
>
> Iconic consumption events of the era: 2003 Taobao online launch, rise of online shopping

From 2008 to 2019, China's economy entered a more mature stage, with GDP reaching nearly 99 trillion yuan in 2019 and the urbanization rate rising to 60%. **This stage's consumption characteristics placed more emphasis on quality and personalization.** Consumers shifted from purely physical purchases to experiential consumption, and the popularity of mobile payments changed consumption methods. The "Double 11" shopping festival, founded in 2009, continuously broke global shopping records and became a representative event of China's digital economy.

> **2008-2019**
>
> Population: approximately 1.4 billion in 2019
>
> Education level of main employed population: significantly increased proportion of university graduates and above
>
> Urban population ratio: approximately 60% in 2019
>
> National GDP: approximately 99.0865 trillion yuan in 2019
>
> Main economic structure: tertiary industry proportion exceeding secondary industry
>
> Urban per capita income: approximately 42,359 yuan in 2019
>
> Main drivers of national economy: consumption, innovation-driven
>
> Main consumption structure: continuous increase in service consumption proportion, rapid growth of emerging consumption
>
> People's consumption needs: pursuing high quality, personalization, experiential consumption
>
> People's consumption behavior: integrated online and offline consumption, widespread mobile payment
>
> Major consumer brands born: Xiaomi, Huawei, Douyin
>
> Iconic consumption events of the era: 2009 "Double 11" shopping festival founded

**Main differences in consumption habits compared to the previous decade:**
**1. Consumption places more emphasis on personalization and experience**
**2. Online consumption becomes mainstream, mobile payment widely used**
**3. Consumption upgrade, pursuit of quality life**
**4. Rise of sharing economy, diversified consumption methods**

Brands like Xiaomi, Huawei, and Douyin rose rapidly during this stage, winning market share with innovative technology and unique user experiences. The sharing economy emerged, and consumers' consumption methods became more diversified. From food delivery to shared bikes, these services penetrated every corner of daily life.

**Second Consumption Era (1999-2019): With rising incomes and the pursuit of quality of life, consumption behavior shifted towards value-rational behavior, gradually reflecting the needs for "safety" and "love/belonging." For example, consumers focused on cost-effective products and brands, while also showing emotionally driven consumption characteristics in online shopping and festival promotions.**

**The essence of consumption in this stage moved from "diversification" to "quality."** Consumers not only pursued higher quality products and services but also paid more attention to shopping experience and personal feelings. The deep integration of online and offline made consumption more convenient and efficient, and digitalization became the core driver of consumption upgrade.

**Third Consumption Era (2019-Present)**

**Affluent Society and Polarized Consumption**

In 2019, China's total economic output exceeded 100 trillion yuan for the first time, and per capita GDP crossed the $10,000 threshold. This was a historic juncture connecting the past and the future. Along with economic transformation and comprehensive improvement in living standards, China officially entered an affluent society.

> **2019-2023 (Pandemic Period)**
>
> Population: approximately 1.41 billion in 2023
>
> Education level of main employed population: further increase in proportion of bachelor's and master's degrees
>
> Urban population ratio: approximately 65% in 2023
>
> National GDP: approximately 121.0207 trillion yuan in 2023
>
> Main economic structure: further increase in tertiary industry proportion, rapid development of digital economy
>
> Urban per capita income: approximately 49,283 yuan in 2023
>
> Main drivers of national economy: domestic demand-driven, technological innovation
>
> Main consumption structure: increased proportion of health consumption and smart consumption
>
> People's consumption needs: focus on health, safety, and intelligence
>
> People's consumption behavior: further popularization of online consumption, rise of stay-at-home economy
>
> Major consumer brands born: Pinduoduo, Meituan, ByteDance
>
> Iconic consumption events of the era: live-streaming e-commerce becoming a new consumption model

However, during this period, the consumer market underwent significant changes under the impact of the pandemic. The consumer market during the pandemic showed a trend of polarization. **On one hand, people paid more attention to value for money**, with consumers becoming more price-sensitive, and platforms like Pinduoduo expanded rapidly through a "low price + high efficiency" model; **on the other hand, emotional consumption exploded in certain areas, with live-streaming e-commerce becoming a landmark consumption phenomenon**. From "Li Jiaqi" to the rise of countless small and medium-sized streamers, consumers obtained not only products through live-streaming rooms but also the joy of interaction and a sense of community belonging. This new consumption model not only met the demand for instant shopping but also provided strong support for the stay-at-home economy.

At the same time, scenario-based consumption and diversified consumption gradually became mainstream. Consumer demand shifted from single product functions to more complex scenario experiences. Platforms represented by Meituan and ByteDance integrated dining, entertainment, shopping, and other services, building a more complete consumption ecosystem. Smart and health consumption also rapidly became popular during the pandemic, with smart home devices, wearable devices, and online health management services being highly favored, further enhancing consumers' pursuit of quality of life.

> **After 2023 (Post-Pandemic Era)**
>
> Population: expected to remain stable or slightly decline
>
> Education level of main employed population: further increase in higher education penetration rate
>
> Urban population ratio: expected to reach over 70%
>
> National GDP: expected to continue steady growth
>
> Main economic structure: increased proportion of digital economy and green economy
>
> Urban per capita income: expected to continue growing
>
> Main drivers of national economy: innovation-driven, high-quality development
>
> Main consumption structure: increased proportion of high-quality service consumption and cultural consumption
>
> People's consumption needs: pursuing sustainable, environmentally friendly, high-quality life
>
> People's consumption behavior: intelligent and personalized consumption becoming mainstream
>
> Major consumer brands born: brands in new energy, artificial intelligence, and biotechnology fields
>
> Iconic consumption events of the era: metaverse consumption, virtual reality experience consumption emerging

**Main differences in consumption habits compared to 5 years ago:**
**1. Greater emphasis on health, environmental protection, and sustainable development**
**2. Intelligent and digital consumption becoming the norm**
**3. Pursuit of high-quality spiritual and cultural consumption**
**4. Increased demand for personalized customized consumption**
**5. Cross-border integrated consumption experiences favored**

After the pandemic, with domestic demand-driven and technological innovation becoming the main drivers of the national economy, the consumer market gradually entered a new development stage. The rapid development of the digital economy provided consumers with more personalized services, and recommendation algorithms and artificial intelligence technologies made shopping experiences more tailored to individual needs. Brands like Pinduoduo, Meituan, and ByteDance, with their technological and scenario innovations, became representatives of this period.

**Third Consumption Era (2019-2039): This is a consumption era in an affluent society, where people's needs move towards "respect" and "self-actualization." Consumer behavior is more emotional and intelligent, with attention to brand social responsibility and sustainability.**

**The current consumer market presents several distinct characteristics:**
**1. Coexistence of value-for-money and emotional consumption:** Consumers pay more attention to cost-effectiveness for big-ticket items, but are willing to pay for emotional experiences in entertainment and social fields.
**2. Scenario-based and diversified:** Whether it's online convenience or offline immersive experiences, consumption scenarios are more diverse, meeting needs at different levels.
**3. Intelligent and ecological:** Green consumption and intelligent services become mainstream, and consumers pay more attention to environmental responsibility and social value when choosing products.

Consumer behavior in this stage **not only reflects the impact of the pandemic on consumption concepts but also marks Chinese consumers redefining the meaning of life in a changing environment.** In the future, with the further integration of digital technology and the consumption ecosystem, China's consumer market will continue to demonstrate strong vitality and adaptability.

**Final Thoughts**

China's per capita income has been continuously increasing over the past forty years, and the Engel coefficient has been declining. This means that the Chinese people have a strong perception that life is getting better day by day. It was not until the pandemic that Chinese consumers began to truly examine their consumption behavior, plan for their future, and view consumption rationally. However, from a development perspective, comparing China and Japan, China still has significant room for consumption potential. Therefore, Chinese FMCG companies should not be overly anxious but should **truly understand the logic and changes in consumer behavior in the third consumption era.** From a historical development cycle perspective, a major shift in consumption concepts was originally expected to occur in 2029, but due to the pandemic and the subsequent sharp decline in income, consumption concepts matured about 5 years earlier, catching Chinese FMCG companies off guard. But no matter how things change, the major trends will not change in a short time. **In the next article, the author will deeply explore the changes in consumer demand in the third consumption era.**

**【New Order · Symbiosis】**

**The 10th China FMCG Innovation Conference**

**Time: March 17-19, 2025**
**Location: Chengdu, China**


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