The process of consumption upgrading is just beginning. As a user, what direct experiences have you had with consumption upgrading? Consumption upgrading has become a new trend in venture capital and entrepreneurship. Whether as entrepreneurs, investors, or ordinary users, everyone is seeking opportunities in consumption upgrading, and at the same time, they are part of this wave. On one hand, new products replace old ones, and some products are gradually dying out; on the other hand, new lifestyles are constantly emerging and spreading to the masses. From the improvement of material quality to the satisfaction of spiritual needs, consumption upgrading is also giving birth to new consumer brands, where people find their own values or spiritual identity. Setting aside the industry perspective, from 2006 to 2016, think back: what was consumption upgrading like in the decade we experienced? What were its specific manifestations? Let's look at the answer from He Mingke, a data enthusiast on Zhihu. 1. Must keep up with trends For example, in transportation, bicycles have been fully upgraded to cars. In Beijing, once known as the bicycle capital, bicycles have almost disappeared from the roads within a few years; bicycles are no longer a means of transportation but more a way to exercise. Other examples include the comprehensive upgrade from knockoff phones and PHS (Personal Handy-phone System) to smartphones, and the full transition from cash payments to credit cards and mobile payments (even leading the world in mobile payments). 2. Knockoffs decline, genuine brands rise In 2015, China's outbound tourism shopping market reached 684.1 billion RMB. From the per capita and per transaction figures in the chart below, the target is genuine luxury goods. In 2015, China's outbound tourism shopping market reached 684.1 billion RMB. From the per capita and per transaction figures in the chart below, the target is genuine luxury goods. 3. Less settling, more refinement The most obvious is the decline in sales of Giffen goods (e.g., potatoes, instant noodles, etc.). Even these products, which were created for settling, are constantly striving to upgrade. The increase in the unit price of instant noodles reflects this trend; simply filling the stomach no longer satisfies consumers. Giffen goods are a special type of inferior goods. As inferior goods, the substitution effect of Giffen goods moves in the opposite direction to price, while the income effect moves in the same direction as price. Simply put, the higher the income, the lower the sales; the lower the income, the higher the sales. Domestic instant noodle sales have been declining for five consecutive years since 2010, and because the instant noodle category has been innovating to raise prices (the right side of the chart shows the trend in unit price), sales revenue has been declining for three consecutive years since 2012. This trend clearly shows that people are becoming less willing to settle for a meal. 4. Away from piracy, pursuing experience This mainly refers to pirated content products, which are somewhat different from counterfeit goods. No matter how counterfeit goods are promoted as super A-grade or factory-direct, buyers ultimately know they are different from branded goods, and sharing them with others always feels inferior. Pirated products are different; they are essentially no different. The high-definition American TV series downloaded via BitTorrent are exactly the same as those on Tencent Video, and BT downloads even offer better offline playback and subtitles, among other experiences; when sharing, no one cares whether you watched it in a cinema or on a video website. The decline in sales of pirated products is partly due to stricter national laws and regulations, which also indicates the protection and increased returns for creative workers; on the other hand, it shows that consumers pay for convenience, indicating that they value their time more and don't mind spending a little money. This precisely reflects the pursuit of more virtual experiences by consumers over the past decade. Accompanying this consumption upgrading is the skyrocketing box office in China, as shown in the chart below. 5. Foreign phoenixes return to the chicken coop. Once upon a time, any foreign brand that came to China was regarded as luxury or trendy, even if it was low-end or common in its own country, like KFC or Walmart. Thus, the opening of a KFC or McDonald's in a place (in fourth- or fifth-tier cities in the early 21st century) became a major festival for local consumers, attracting crowds dressed up to attend. This also led to the creation of brands like American California Beef Noodles, which packaged authentic domestic food as foreign brands to attract users. With the opening of the Chinese market and the going-out of Chinese people, the worship of foreign goods and brands has returned to rationality and normalcy. McDonald's and KFC have become fast food and ordinary items in China, and Starbucks is no longer a tool for showing off. The chart below shows the per capita consumption trends for KFC and all restaurants. While the per capita consumption of all restaurants has been rising year by year, KFC has maintained a steady lag behind the average. 6. "Simplify the spirit, strengthen the body." Whether orthodox religions or various other types of spiritual products (including qigong, success literature, etc.), they more or less help people forget the dissatisfaction and pain of mortal life, maintain fantasies or dreams, and seek liberation and peace in the spiritual world. There is a negative correlation between wealth and the proportion of religious believers: the wealthier the country, the fewer religious believers, with only China and the United States as exceptions. Clearly, over the past decade, the number of people practicing qigong and following various cults has decreased because people have become wealthier and no longer need the comfort and solace of spiritual products, while an increasing number of people are focusing on fitness. Seeing these manifestations, everyone can relate to them to some extent. It should be said that the process of consumption upgrading is just beginning. As a user, what direct experiences have you had with consumption upgrading? In the future, which areas do you think still have investment and entrepreneurial opportunities in consumption upgrading? [This article was written by He Mingke, reposted from Qingshan Capital (ID: cyanhillvc). Compiled by: i黑马. 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