---
title: "The Essence of Consumption Upgrade"
description: "Mao Shengbo, partner at Panda Capital, defines consumption upgrade not as buying more expensive or better-quality goods, but as people valuing their time more and being willing to pay for products and services that save time, enhance time utilization, or add meaning to their lives. He identifies four manifestations: doing two things at once, using purchases to label oneself, paying for time-saving services, and faster trend cycles."
author: "毛圣博"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2017-06-10"
language: "en"
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---

# The Essence of Consumption Upgrade

> Mao Shengbo, partner at Panda Capital, defines consumption upgrade not as buying more expensive or better-quality goods, but as people valuing their time more and being willing to pay for products and services that save time, enhance time utilization, or add meaning to their lives. He identifies four manifestations: doing two things at once, using purchases to label oneself, paying for time-saving services, and faster trend cycles.

_Mao Shengbo: Partner at Panda Capital, co-founded Panda Capital in 2015. Previously, he served as Vice President at Qiming Venture Partners, where he was deeply involved in investments in Xiaomi Technology and its supply chain._
_Mao Shengbo has conducted in-depth research in areas such as smart hardware, cloud computing, enterprise services, and consumption upgrade. His representative investments include Mobike, Face++, Atzuche, Qiniu Cloud, Roborock, Insta360, among others. Prior to that, he also participated in investments in Xiaoyi Technology, Unisound, Yuntaili Automation, and Tongdun Technology. He currently focuses on consumption upgrade, sharing economy, social networking, and IT technology._
_In 2017, Mao Shengbo was named one of the "Top 30 Early-Stage Angel Investors in China 2016" by ChinaVenture and Hurun, and one of the "40 Under 40 Investors" by Entrepreneur magazine in 2016. In 2016, he also received honors such as the "Most Promising Venture Capital Star Under 35" by Zero2IPO._
**The following is the transcript of his speech:**
Since last year or even the year before, the industry has been talking about consumption upgrade for a long time, and many startups in this space have emerged.
**Today, we are discussing a very fundamental topic: how to define consumption upgrade?**
Some people talk about it from the perspective of product quality, others from price and brand. My understanding may differ from these.
**I believe that consumption upgrade is not simply about selling more expensive or better-quality products.** Whether it's the growth of a consumer category, the popularity of a phenomenal consumer product, or the quality and brand that people talk about most, these all approach consumption upgrade from the dimension of the product itself.
**I prefer to understand consumption upgrade from the perspective of people, or more precisely, from the perspective of demand.** Because all consumption decisions are made by people, and decisions are driven by demand, which is determined by people's most fundamental psychological needs. Factors like quality, brand, and cost-effectiveness are more like surface manifestations of these deeper needs.
**Therefore, my understanding of consumption upgrade is that people's time is becoming more valuable. They are willing to pay for things that save time, improve time utilization, or give more meaning to their time.**
There is a Japanese author named Mitsuru Sakurada who wrote a book called "The Fourth Consumption Era," and there is a quote from it that I particularly agree with: **"The ultimate meaning of consumption is how to live a more fulfilling life."**
This sentence may seem simple, but it is a profound insight that can aptly explain the current consumption upgrade trend in China.
I would like to share with you four manifestations of consumption upgrade in terms of time and user labels:
**"Whether it's for pleasure or to fill time, it's about doing two things at the same time. Essentially, they want to live a more fulfilling life."**
From my observation of the consumption upgrade trend, the first manifestation is: Can I do two things in the same amount of time?
For example, take transportation.
It's simple: going from point A to point B. Previously, when we rented a car, we just wanted a car, and even then, we often rented a standard Santana. Now, with various car rental services like Atzuche and Shenzhou, consumers think: Should I rent an Audi TT or a 911? If I go off-roading, can I rent a Wrangler?
The same is going from A to B, but what has changed behind this?
Previously, users thought more about reaching the destination. Now, users think: Can I experience more beauty in the same time? Besides being useful, it should also be fun.
This is a higher demand from today's post-80s and post-90s users. For example, while being useful, they buy products with higher aesthetic appeal. A simpler example: a user wants to buy sunglasses to block the sun. That's a need at the useful level. But now, young people first think: Why not buy trendy sunglasses? They can block the sun and also be more fashionable. This is a demand that goes beyond usefulness to also bring joy to body and mind.
**These consumption upgrade changes, whether for pleasure or to fill time, are about doing two things at the same time. Essentially, they want to live a more fulfilling life.**
**"He will make a corresponding consumption decision based on what kind of person he wants to become. Continuously upgrading consumption and making purchases is like constantly labeling himself."**
The second manifestation of consumption upgrade is that items are not necessarily better if they are more expensive, nor is it enough to have good cost-performance. Consumers care more about the user label behind the purchase decision.
At one point, I noticed that friends in my WeChat Moments were posting about their Dyson vacuum cleaners. Why are people willing to post about buying a Dyson vacuum but not about buying other brands?
I tend to explain this phenomenon from two aspects.
**First, from the perspective of consumption upgrade of the product itself.**
From the perspective of usefulness and user experience, compared to vacuum cleaners costing a few hundred yuan, Dyson vacuums are indeed significantly better at cleaning hair and particles. Dyson vacuums, including hair dryers, are also more expensive, basically about 10 times the price of ordinary brands, achieving consumption upgrade in both price and user experience.
**Second, is it because they are expensive and show off wealth? Not necessarily.**
For example, there are very expensive phones, like those studded with diamonds costing tens of thousands or even hundreds of thousands. But even very wealthy people who can afford such phones wouldn't buy them; they would still buy an iPhone. They think that buying such a phone would label them as nouveau riche, foolish, or lacking taste.
**There was an article in the industry about the popularity of the middle class, where sparkling water, marathons, coffee machines, and Dyson vacuums became standard equipment for middle-class identity. Behind this is actually labeling oneself.**
A typical example is that many women like to post photos of themselves at the gym. I observed that those who post frequently are not hardcore fitness enthusiasts, but rather women who have just joined the fitness trend and bought a gym membership. They are more motivated to post photos of themselves at the gym.
After posting such a photo, they label themselves. In contrast, hardcore fitness enthusiasts label themselves differently; for example, they prefer Under Armour's tight-fitting clothes, which represent professionalism, rather than more mainstream sports brands like Nike or Adidas.
People don't necessarily buy expensive things, but they buy goods and services that represent their identity labels. Why is there such a difference?
**I tend to believe that from the perspective of social motivation, if people cannot label themselves, they won't actively show off.**
Simply put, young people who grow up on social platforms make consumption decisions to label themselves. They will make corresponding consumption decisions based on what kind of person they want to become. Continuously upgrading consumption and making purchases is like constantly labeling themselves. The label may be complex and multi-dimensional, such as: I am cool, I like technology, I have good taste, and I am wealthy.
Regardless of the label, **in essence, consumption upgrade is superficially about buying better things, but at a deeper level, it satisfies people's psychological needs.**
**"People are increasingly paying to save their time, wanting to 'upgrade themselves' and caring more about the value of their time. Even more, people are particularly willing to buy products that save time."**
**The third manifestation of consumption upgrade is that people are increasingly paying to save their time, wanting to 'upgrade themselves' and caring more about the value of their time.** They use the saved time for other things, to enrich and improve themselves. They even spend time on "useless" beautiful things.
For example, in purchasing choices, people are becoming more "selfish" and picky. An interesting phenomenon is that previously, people mostly bought household consumer goods like refrigerators, washing machines, and rice cookers. Now, they tend to buy personal consumer goods like razors, hair dryers, and facial cleansing brushes to upgrade themselves. In meeting personal needs, users are becoming more picky and consider more dimensions in their decisions.
Moreover, consumption upgrade is not only in goods but also in services. For example, people pay for video websites to avoid ads. This kind of time-saving consumption upgrade is already widely accepted by young people. People can hire cleaning services, designated drivers, and ride-hailing services, all to save their own time.
**Even more, people are particularly willing to buy products that save time.**
Recently, there was an interesting thing: IKEA launched a "Time Retail Store" project on its official website. The core idea is to categorize common items like clothes, jewelry, and snacks through storage solutions, saving more time for users to go out on dates, spend time with family, and do other interesting things—exchanging space for time.
**"The rapid succession of internet-famous cosmetics and restaurants bears the mark of consumption upgrade trends."**
Another manifestation of consumption upgrade is that the speed of trend changes is accelerating, and the time is shortening.
For example, a few years ago, "My Love from the Star" popularized YSL lipstick. After a while, people moved on to other things. "Descendants of the Sun" popularized Laneige's two-tone lipstick, and young women started favoring Korean products. Now, "Ode to Joy" is popular, and young women are rushing to buy the same bags as the characters Andy and Qiu Yingying.
There are also internet-famous restaurants. For example, now Heytea is popular, and people queue up to buy it. I believe that soon, the next popular restaurant will come quickly.
These rapid changes in internet-famous cosmetics and restaurants all carry the mark of consumption upgrade trends. Young people's pursuit of consumption trends is accelerating, and they gain freshness by constantly updating trends, making their lives more fulfilling. This is also a form of consumption upgrade.
**Finally, how do we view investment opportunities in consumption upgrade?**
Let me give an example: the Xiaomi robot vacuum I invested in.
In terms of scale, the robot vacuum market, when I invested, according to Taobao data, had grown 30 times in sales over the past year, showing its market potential.
In terms of value, robot vacuums replace human labor, save time, and also protect privacy. This actually satisfies the time dimension, the deep user demand dimension, and also the psychological need for high aesthetics and looking cool at home. Such products are worthy of VC investment.
Of course, the consumer industry itself is complex, and it's hard to determine at once whether we should sort investment targets by category or use financial models. It requires more specific industry and product analysis.
**New Distribution's "7th B-end E-commerce Study Tour" is now recruiting!**
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> 19th: Check in at designated hotel in Suzhou; 20th: Visit Suzhou Medline; 21st: Visit Shanghai Hd; 22nd: Visit Hangzhou Wangcang; 23rd: Return or free time for sightseeing;
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**6th B-end E-commerce Study Tour group photo, from top to bottom: Zhongke Shangruan, Shuhai Supply Chain, Yunmei Co., Ltd., Yishang Logistics.**
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**1st B-end E-commerce Study Tour group photo, from top to bottom: Piduoduo, Beiquan, Yishang.**
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