《畢馬威（KPMG）：2025中國消費品零售業半年度報告（英文版）（74頁）.pdf》由會員分享，可在線閱讀，更多相關《畢馬威（KPMG）：2025中國消費品零售業半年度報告（英文版）（74頁）.pdf（74頁珍藏版）》請在三個皮匠報告上搜索。

1、1 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.2024 H2Semi-annual Report on

2、the Consumer&Retail Sector in ChinaCoverage of Chinas macro-economic environment,sector trends,deal scenarios and tax updates2 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated wit

3、h KPMG International Limited,a private English company limited by guarantee.All rights reserved.Macro-economic landscapeContentsSector impact of recent market dynamicsSub-sector trendsLuxury and fashionApparel and footwearHealth and beautyFood and beverageRestaurantsDeal scenariosBuzzwords among Chi

4、nese consumersForward-looking policies aim to boost consumptionAppendix041117384551566418222531342 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited

5、,a private English company limited by guarantee.All rights reserved.Recent tax updates in China3 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a

6、 private English company limited by guarantee.All rights reserved.In 2024,Chinas gross domestic product(GDP)growth exceeded expectations,and the consumer market expanded steadily driven by new business models and trends.Influenced by international oil prices,gold prices and pork prices,Chinas inflat

7、ion rate was relatively sound;the consumer price index(CPI)was generally stable on a year-on-year(YoY)basis;and the YoY decline in the producer price index(PPI)was milder than in the previous year.In December 2024,the USs inflation rate ticked upward by 0.4%month-on-month,which was higher than the 0

8、.3%increase recorded in November and marked the largest increase since March 2024.One of the main factors driving inflation in the US is the energy index.In the second half of 2024,cultural tourism remained popular,continuing a trend seen in the first half of the year.As a result of the National Day

9、 holiday,ice-and-snow tourism,and other factors,retail sales in transportation and travel services,tourism consulting and lease services grew rapidly,and the tourism market continued to thrive.Trade-in policies for consumer goods have been effective;and more and more market players,especially enterp

10、rises,are participating in these programmes,which are stimulating consumption and economic development while also enabling consumers to enjoy better products.As consumer confidence gradually recovered in the second half of 2024,the investment and financing market began to heat up.Going forward,China

11、 will make concerted efforts to promote the luxury,catering and wellness sectors,among other consumer fields,and enact policy packages to comprehensively drive consumption.Sub-sectors covered in the reportLuxury and fashionApparel and footwearHealth and beautyFood and beverageRestaurantsSummary4 202

12、5 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Macro-economic landscape4 2025 KPM

13、G Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.In 2024,Chinas economy rebounded in the

14、 wake of certain fluctuations.During the year,the efficiency and effectiveness of macro-controls were strengthened;and GDP exceeded CNY 130 trillion for the first time,representing YoY growth of 5%.With the effective implementation of existing and incremental policies,various economic metrics contin

15、ued to climb.In 2024,indicators such as national per capita disposable income,national per capita consumption expenditure,and total retail sales of consumer goods rose significantly.Among them,national per capita disposable income and national per capita consumption expenditure grew by 5.3%in nomina

16、l terms over the previous year,and total retail sales of consumer goods increased by 3.5%over the previous year.Throughout the year,economic sectors related to peoples livelihoods demonstrated stability and made progress.In general,in 2024,Chinas macro-economic governance became more systematic and

17、coordinated,and the countrys consumer market remained resilient and demonstrated significant potential.In light of its fundamentals and various supportive policies,Chinas economic recovery is expected to maintain strong momentum in 2025.5 2025 KPMG Advisory(China)Limited,a limited liability company

18、in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.2024 was a key year for achieving the goals and tasks of the 14th Five-Year Plan.During the

19、year,in the face of increasing external pressure and domestic difficulties,Chinas GDP reached CNY 134.9 trillion,exceeding CNY 130 trillion for the first time and representing an increase of 5%over 2023.This growth demonstrates that Chinas economic fundamentals and conditions have grown stronger,imp

20、roving the countrys ability to mitigate risks as it pursues further development.In terms of the three main factors driving economic development,consumer demand continued to expand,driving GDP growth by 2.2 percentage points;investment growth was generally stable,accounting for 1.3 percentage points

21、of GDP growth;and net exports made steady progress,boosting GDP growth by 1.5 percentage points.Going forward,the government will continue to promote the decisions reached by the Central Economic Work Conference,implement special measures to boost consumption,promote income growth for and reduce the

22、 burden shouldered by low-and middle-income groups,improve peoples willingness to consume,enable the development of innovative and diversified consumption scenarios,and expand consumption of services.Gross domestic product(GDP)Source:National Bureau of StatisticsChinas GDP growth,Q4 2022-Q4 2024(%)I

23、n 2024,Chinas disposable income per capita grew by 5.3%in nominal terms over the previous year and by 5.1%in real terms after excluding price factors.The rapid rise of wages and salaries and net business income is an important factor supporting the growth of residents income.From the perspective of

24、employment,the national surveyed unemployment rate in urban areas in 2024 remained stable,recording a slight decline.The average surveyed unemployment rate in urban areas was 5.1%,0.1 percentage points lower than in the previous year,providing security for the growth of residents wages.At the same t

25、ime,in 2024,demand for cultural and tourism activities continued to be strong,driving the development of wholesale and retail,accommodation and catering,transportation and other industries,and propelling YoY growth of 5.6%in the per capita net business income of residents.In the future,China will st

26、rive to balance stable growth,stable employment and reasonable price recovery;put more emphasis on promoting full,high-quality employment;implement employment support plans in key areas and industries,in urban and rural areas,and for small-and medium-sized enterprises(SMEs);promote employment for ke

27、y groups;and boost the income growth of residents.Disposable income per capitaSource:National Bureau of StatisticsDisposable income per capita,Dec 2022-Dec 2024(CNY）Chinas GDP exceeded CNY 130 trillion for the first time while residents income kept pace with economic growth2.9%4.5%6.3%4.9%5.2%5.3%4.

28、7%4.6%5.4%22Q423Q123Q223Q323Q424Q124Q224Q324Q436,883 10,870 19,672 29,398 39,218 11,539 20,733 30,941 41,314 Dec-22Mar-23Jun-23Sep-23Dec-23Mar-24Jun-24Sep-24Dec-246 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of i

29、ndependent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Retail sales growthSource:National Bureau of StatisticsIn 2024,the scale of Chinas retail market continued to expand.During the year,total retail sales of consumer go

30、ods reached CNY 48.8 trillion,reflecting an increase of 3.5%over the previous year and underscoring the global importance of the countrys market.In Q4,total retail sales grew by 3.8%YoY,1.1 percentage points faster than in Q3.Following the meeting of the Political Bureau of the Communist Party of Ch

31、ina(CPC)Central Committee on 26 September,a package of incremental policies was issued in order to drive development momentum,expand market demand,invigorate production,improve market activity and enhance development confidence.These measures played a decisive role in the economic recovery in the fo

32、urth quarter and helped the country achieve its annual economic goals.YoY retail sales growth,Dec 2023-Dec 2024(%)7.40 5.50 3.10 2.30 3.70 2.00 2.70 2.10 3.20 4.80 3.00 3.70 7 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organi

33、sation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The consumer goods market received policy support and gradually recovered in the second half of 2024.Although the overall market environment improved,retai

34、l sales of gold,silver and jewellery still faced significant pressure in the second half of the year and did not see a significant rebound.While monthly YoY sales for clothing,shoes,hats and knitwear declined,cumulative YoY sales still maintained positive growth,reflecting to some extent that overal

35、l demand remained stable in the wake of short-term fluctuations.Retail sales of cosmetics recorded a particularly strong performance in early Q4,mainly due to the promotion of the Double 11 Shopping Festival and the implementation of various policies and campaigns to promote consumption.Notably,cosm

36、etics experienced a whopping YoY growth of 40%in October.Overall,sales growth was strong across various categories in Q4.Grain,oil,food and beverage,as well as catering,maintained steady growth,reflecting the gradual recovery of consumer confidence.In contrast,beverage enterprises experienced slowin

37、g growth in the second half of 2024,which may be related to intensified market competition,changes in consumer purchasing power and seasonal factors.In addition,some beverage companies may have encountered challenges in product innovation and marketing strategies,negatively impacting their market sh

38、are.In general,in 2024,Chinas economy made progress while maintaining stability,and the countrys main development goals were achieved.Officials at the Central Economic Work Conference said that,in 2025,vigorously boosting consumption,improving investment efficiency and expanding domestic demand in a

39、n all-round way will be the first priority among their key tasks.They also said that,in the coming years,relevant policies will be rolled out in a timely,coordinated manner to stabilise and promote the continuous recovery of the economy.Source:National Bureau of StatisticsLuxury and fashionRetail sa

40、les of gold and silver jewellery,Dec 2023-Dec 2024(CNY 100 million,%)Retail sales of clothing,shoes,hats and knitwear,Dec 2023-Dec 2024(CNY 100 million,%)In the second half of 2024,the retail market for consumer goods achieved progress while ensuring stability Source:National Bureau of StatisticsApp

41、arel and footwear304 708 291 231 240 262 200 257 264 264 268 310 29.4%5.0%3.2%-0.1%-11.0%-3.7%-10.4%-12.0%-7.8%-2.7%-5.9%-1.0%Gold and silver jewellery（CNY 100 million）YoY（%）157625211182104811481237936994116913471480162926.0%1.9%3.8%-2.0%4.4%-1.9%-5.2%-1.6%-0.4%8.0%-4.5%-0.3%Clothing,shoes,hats and

42、knitted textiles（CNY 100 million）YoY（%）8 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights

43、 reserved.Retail sales of cosmetics,Dec 2023-Dec 2024(CNY 100 million,%)Source:National Bureau of StatisticsRetail sales of grain,oil and food,Dec 2023-Dec 2024(CNY 100 million,%)Retail sales of the drink category,Dec 2023-Dec 2024(CNY 100 million,%)Source:National Bureau of StatisticsRetail sales o

44、f catering,Dec 2023-Dec 2024(CNY 100 million,%)Source:National Bureau of StatisticsRestaurantsHealth and personal careFood and beverageSource:National Bureau of Statistics323 678411 278 406 405 245 319 329 468 434 345 9.7%4.0%2.2%-2.7%18.7%-14.6%-6.1%-6.1%-4.5%40.1%-26.4%0.8%Cosmetics（CNY 100 millio

45、n）YoY（%）1,9063,6931,6901,5211,6151,8331,6191,6962,0371,8441,8942,1855.8%9.0%11.0%8.5%9.3%10.8%9.9%10.1%11.1%10.1%10.1%9.9%Grain,oil and food(CNY 100 million)YoY（%）2765412372302562982682673012542552637.7%6.9%5.8%6.4%6.5%1.7%6.1%2.7%-0.7%-0.9%-4.3%-8.5%-20.0%-18.0%-16.0%-14.0%-12.0%-10.0%-8.0%-6.0%-4.

46、0%-2.0%0.0%2.0%4.0%6.0%8.0%10.0%01002003004005006007008009001,000Drink category(CNY100 million)YoY（%）5,4059,4813,9643,9154,2744,6094,4034,3514,4174,9525,8025,54930.0%12.5%6.9%4.4%5.0%5.4%3.0%3.3%3.1%3.2%4.0%2.7%-80.0%-60.0%-40.0%-20.0%0.0%20.0%02000400060008000100001200014000Catering(CNY100 million)

47、YoY（%）9 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.In 2024,inflation in Ch

48、ina was generally stable,and inflation in the US was stable and trended downward,before showing signs of a rebound at the end of the year.China and US consumer price index YOY growth(CPI)(%),Dec 2023-Dec 2024 In 2024,Chinas consumer price index(CPI)was basically stable.Specifically:The decline in fo

49、od prices became sharper.In 2024,food prices declined by 0.6%,0.3 percentage points more than in the previous year,which was the main factor pushing CPI growth downward.It is worth noting that the price of pork and fresh vegetables,as important consumer goods in peoples shopping baskets,increased 7.

50、7%and 5.0%compared with increases of 13.6%and 2.6%in the previous year,respectively.These two daily consumer goods were the only ones that saw rising prices.Energy prices fell slightly.In 2024,energy prices decreased by 0.1%,which was 2.5 percentage points less than the decline recorded in the previ

51、ous year.The growth of core CPI was higher than that of CPI.Core CPIwhich excludes food and energy pricescontinued to rise moderately,with YoY growth of 0.3%to 0.7%in most months and average growth of 0.5%throughout the year.With the impact of existing policies and a package of incremental policies,

52、the economic recovery is strengthening;the recovery of consumer demand is accelerating;and conditions are growing more favourable for a moderate price recovery.CPI is expected to continue to rise in 2025.On the whole,in 2024,inflation in the US was stable and declined slightly,but there were signs o

53、f a rebound at the end of the year.In December,CPI again rose at a rate of 2.9%YoY,with a month-on-month increase of 0.4%,0.1 percentage points higher than in the previous month and the largest increase since March 2024.The rise in month-on-month inflation was mainly caused by energy and food prices

54、.Energy prices rose 2.6%month-on-month,within which gasoline prices rose 4.4%;this was the primary factor pushing CPI upward.The Federal Reserve has cut interest rates three times since September 2024.The recent inflation rebound may cause the US central bank to exercise prudence in cutting interest

55、 rates in 2025.Source:National Bureau of Statistics of China and Bureau of Labor Statistics of the USInflation in China was generally stable,while it showed signs of rebounding in the US-0.3%-0.8%0.7%0.1%0.3%0.3%0.2%0.5%0.6%0.4%0.3%0.2%0.1%3.4%3.1%3.2%3.5%3.4%3.3%3.0%2.9%2.5%2.4%2.6%2.7%2.9%Dec-23Ja

56、n-24Feb-24Mar-24Apr-24May-24Jun-24Jul-24Aug-24Sep-24Oct-24Nov-24Dec-24ChinaUS10 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English

57、company limited by guarantee.All rights reserved.In 2024,Chinas producer price index(PPI)fluctuated at a low level,and US PPI rose steadily.China and US producer price index YOY growth(%),Dec 2023-Dec 2024Source:National Bureau of Statistics of China and Bureau of Labor Statistics of the USOverall,i

58、n 2024,Chinas PPI decreased by 2.2%YoY,which was 0.8 percentage points smaller than the decline recorded in 2023.From a month-to-month perspective,the YoY decline in PPI narrowed from January to July;the decline expanded from August to September;and then the decline steadily narrowed from October.Th

59、e movement of PPI was mainly caused by decreases in the prices of energy and raw materials-related industries;prices in certain consumer goods equipment and consumer goods manufacturing industries also declined.In addition,Chinas industrial transformation and upgrading has had a certain stimulative

60、effect on PPI.In 2024,Chinas new quality productive forces developed steadily,and the demand for nonferrous metals grew due to improvements in the performance of certain high-tech products,as well as improvements in electrification levels.These factors pushed prices higher and effectively narrowed t

61、he decline in PPI.In the US,PPI rose YoY and reached its highest level for the year in December,but it was still below market expectations.The rise in commodity prices,especially the 3.5%increase in energy prices,has become the main factor driving the increase in prices.Meanwhile,service prices rema

62、ined the same in December compared with the previous month,while food prices declined slightly by 0.1%.-2.7%-2.5%-2.7%-2.8%-2.5%-1.4%-0.8%-0.8%-1.8%-2.8%-2.9%-2.5%-2.3%1.1%1.0%1.6%2.0%2.3%2.5%2.9%2.4%2.1%2.1%2.6%3.0%3.3%Dec-23Jan-24Feb-24Mar-24Apr-24May-24Jun-24Jul-24Aug-24Sep-24Oct-24Nov-24Dec-24Ch

63、inaUS11 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Sector impact of recent

64、 market dynamics11 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Chinas consu

65、mer sector remained strong in H2 2024.During this period,the country introduced targeted policies to boost domestic demand and consumption.In addition,the 2024 China International Import Expo,which is playing a key role in accelerating the process of“turning exhibits into commodities,”was held;and t

66、he booming ice-and-snow economy generated excitement among consumers.Overall,consumers have been shifting their focus towards quality and wellness offerings.Artificial intelligence(AI)has helped drive consumption in the food and beverage sector,indicating that the consumer sector is embracing techno

67、logy to meet more diversified and personalised needs.In addition,a growing number of food and beverage companies have been expanding into overseas markets,as they look to go global in the long term.In terms of other sub-sectors,the luxury market saw slow growth as its supply structure continued to a

68、djust and improve,and luxury experiences and the duty-free market made a greater contribution in driving consumption.The apparel and footwear sector recorded remarkable online sales,propelled by soaring sales of outdoor sportswear and cold-protective garments amid the growing popularity of light out

69、door activities and the burgeoning ice-and-snow economy.Meanwhile,enterprises in the beauty and personal care sector have increasingly been using“short drama marketing”as a branding tool,enabling them to better address consumer needs that are becoming more varied and diversified.12 2025 KPMG Advisor

70、y(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Very negativeVery positiveNegativeNeutralPositiv

71、eMarket dynamicsLuxury and fashionImpactaEconomic activitiesIn 2024,while Chinas economy remained stable and improved in general,the consumer sector underperformed.Due to a slowdown in personal income growth,consumers lacked spending power and confidence,which resulted in tighter budgets and more pr

72、udent spending.-According to the 2024 Research on the Global Luxury Market report,global luxury sales in 2024 were expected to reach almost EUR 1.5 trillion,basically the same as in 2023,with YoY growth falling between-1%and 1%.However,in China,as consumers became less confident and increasingly cho

73、se neighbouring countries and Europe as their travel destinations,the consumer sector remained sluggish in 2024,with luxury sales expected to drop by 20%to 22%for the year before recovering in H2 2025 1.-As reported in November 2024,luxury sales fell by 16%in Q3 2024 across Asia(excluding Japan).In

74、a notable exception,Japan actually saw growth in luxury sales,as the weak JPY attracted a large number of Chinese tourists.However,the growth rate of Japans luxury sales dropped sharply to 20%in Q3 from 57%in the previous quarter2,due to upward price adjustments carried out by major brands in the co

75、untry.-As reported in November 2024,the financial performance of luxury groups declined,due to multiple factors such as geopolitical tensions and local economic developments in regions where they were operating.From a regional perspective,Asia Pacific(APAC)was hit the hardest,especially in China whe

76、re many major luxury brands experienced significant declines in performance due to weak high-end consumption.On the other hand,luxury sales remained relatively strong in Japan and South Korea,with many luxury groups recording impressive results.The Europe,Middle East and Africa(EMEA)region also perf

77、ormed relatively well,with sales growing across its markets3.-However,according to the CFO and deputy CFO of LVMH Group,the Group will not change its current strategy and will continue to invest in the Chinese market through marketing campaigns4,as the demand for high-end consumer goods is still str

78、ong in the country despite muted consumer confidence.TravelAs consumers shifted their focus to travel and social activities,luxury experiences maintained a strong allure,and consumers increasingly chose personal care,healthcare and other experiences over physical luxury goods.In addition,high-net-wo

79、rth individuals showed stronger interest in experience-based products,especially high-end products such as yachts,cars and jets1.In 2024,shopping enthusiasm recovered rapidly among Chinese tourists,thanks to recent visa-free policies and other factors,with duty-free shopping posting a recovery rate

80、of 62%in the first 10 months of 2024 compared to 2019.Meanwhile,that recovery rate for APAC as a whole reached a staggering 204%compared to 20195.Duty-free market During 2024,Haikou Customs supervised offshore duty-free sales of CNY 30.94 billion across 5.683 million purchases and 33.082 million ite

81、ms purchased.For the peak tourist consumption season that traditionally comes at the turn of the year,various duty-free consumption vouchers were issued across Hainan.According to the Haikou Municipal Bureau of Commerce,CNY 26 million of duty-free coupons have been issued since December 2024,and mor

82、e promotional activities were being planned for the upcoming Spring Festival.In addition,the Sanya Municipal Bureau of Commerce announced a plan to invest CNY 74.5 million in consumer coupons from the end of December 2024 to February 20256.In 2024,the Notice on Improving the Policy for Downtown Duty

83、-Free Shops was issued by the State Council.Effective from 1 October 2024,it is expected to further stimulate duty-free consumption in China and bring new growth opportunities for duty-free retailers.The luxury sector grew slowly,with consumers showing a preference for luxury experiences while new g

84、rowth drivers emerged for the duty-free sectorFestival celebrationsIn H2 2024,luxury goods performed remarkably well across all categories,with a surge in turnover during the Double 11 Shopping Festival.-Surprisingly,in H2 2024,outdoor sports products and high-end home furnishings drove significant

85、growth in the luxury goods category on Tmall,with turnover growing 110%and 240%YoY,respectively7.-During the Double 11 Shopping Festival,consumer financial service providers introduced the“interest-free instalment”payment method,which proved useful for many luxury brands and enabled them to grow the

86、ir transaction volumes.As a special form of consumer finance,interest-free instalment plans allow consumers to optimise their spending without additional burden,and enterprises can use small discounts to generate significant growth in sales8.Note:a.KPMG analysis13 2025 KPMG Advisory(China)Limited,a

87、limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The apparel and footwear sector saw remarkable online sales,with c

88、onsumers showing a preference for functional items that offer both aesthetics and utilityVery negativeVery positiveNegativeNeutralPositiveMarket dynamicsApparel and footwearImpactaWhile the consumer sector experienced steady growth in 2024,domestic demand for clothing,shoes,hats and knitwear was mut

89、ed.-In 2024,domestic sales of textiles and clothing in China slowed down.Retail sales of clothing,shoes,hats and knitwear of units above the designated size grew by a mere 0.3%YoY,which was significantly lower than the growth rate in 2023,reflecting the need to stimulate domestic demand.Given increa

90、singly fierce competition online and a high YoY growth rate in 2023,online consumption of textiles and clothing was sluggish,with online retail sales of clothing products increasing by only 1.5%YoY,down 9.3 percentage points compared to the growth rate in 2023.-In 2024,personal expenditure on clothi

91、ng per capita stood at CNY 1,521,up 2.8%and accounting for 5.4%of total consumer spending per capita.However,the growth rate of this category was down 5.6 percentage points compared to 2023.With the rising popularity of light outdoor activities,lightweight outdoor styles with both aesthetics and uti

92、lity that are suited to a variety of daily living scenarios drove sales growth for outdoor-related clothing.-Outdoor clothing styles,including Urban Techwear,Mountaincore,and Gorpcore,have made headway in womens clothing,mens clothing,sports clothing and other daily wear categories,expanding choices

93、 for consumers and marking new trends in urban wear 9.-From January to October 2024,outdoor clothing retailers experienced rapid growth in online sales,with total turnover of CNY 13.612 billion on Tmall,up 14.5%YoY,and CNY 17.484 billion on Douyin,up 75.5%YoY10.-Mid-range and high-end brands saw fas

94、ter growth online.One high-end outdoor brand generated turnover of CNY 1.228 billion on Tmall and Douyin from January to October 2024,up more than 220%YoY.Meanwhile,one mid-range brand achieved online sales of CNY 779 million,reflecting a YoY increase of nearly 175%.These figures reflect that consum

95、ers are now prioritising a quality wearing experience over other factors10.Festival celebrationsIn 2024,the lengthened Double 11 Shopping Festival further stimulated consumers shopping demand,and apparel and footwear recorded the highest sales among all sub-categories.-According to Syntun,sales of c

96、lothing categories reached CNY 166.4 billion across integrated e-commerce platforms,up 21.4%YoY and accounting for 14.1%of total sales for all categories,demonstrating strong growth momentum11.-According to data released by Douyin e-Commerce for the first 3 days of its Double 11 Festival,both turnov

97、er and order volumes grew more than 90%YoY for clothing brands.Riding this momentum,during this period,about 100 major brands generated CNY 10 million or more in turnover,and 480 major brands saw their turnover grow more than 200%YoY12.Economic activitiesShift in trendsTravelWith ice-and-snow touris

98、m and outdoor sports becoming more popular in autumn and winter,consumers purchasing activity in respect of clothing largely reflected their desire to stay warm and weather the cold.As a result,consumers tended to choose utility items such as sports down jackets and outdoor jackets.-According to the

99、 China Outdoor Sports Industry Development Report(2023-2024)issued by the General Administration of Sport of China,from a consumption perspective,the average annual expenditure by outdoor enthusiasts in China remained high in 2023 and 2024,with the average annual expenditure on individual outdoor ac

100、tivities reaching CNY 2,000 to 5,000;in terms of age groups,the“post-80s”and“post-90s”segments were the core of the outdoor sports consumer base.-According to the Ministry of Industry and Information Technology,in 2023,the number of companies operating in ice and snow equipment-related industries gr

101、ew to approximately 900(compared to 300 in 2015),with total sales revenue of CNY 22 billion(compared to less than CNY 5 billion in 2015)14.Note:a.KPMG analysis14 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of inde

102、pendent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.In the beauty and personal care category,new R&D initiatives were launched,short drama marketing took off as a branding tool,and the desire for overseas expansion remain

103、ed strongVery negativeVery positiveNegativeNeutralPositiveIn H2 2024,as part of the effort to further stimulate personal consumption and the consumer market,China introduced a package of incremental policies and issued batches of consumption vouchers to accelerate the recovery of the health and beau

104、ty market.-Since July 2024,Taobao has held various promotional activities each month,including discounts,coupons and other promotional measures,with a view to unleashing consumer demand and expanding the beauty and personal care market.In 2024,retail sales of cosmetics for units above the designated

105、 size reached CNY 435.7 billion,up 5.2%YOY compared with 2023.New e-commerce models,such as livestreaming and instant retail,continued to evolve and played a significant role in driving online consumption.To meet the demand among the new generation of Chinese parents for more refined and professiona

106、l skincare products for their children,brands have begun to conduct research and develop products that are more gentle,safe and effective.-In September 2024,Curl,which is part of Kao Group,a Japanese cosmetics group,announced its plan to launch a childrens skincare line in China that will target chi

107、ldren with sensitive skin and serve as a new growth driver15.-A Chinese brand called Hi!papa launched a technology-based anti-acne product line to provide skincare solutions for teens with oily or sensitive skin and acne,marking a breakthrough in the field of skincare for teens16.As medical cosmetol

108、ogy grows as a share of Chinas beauty market,consumers are increasingly expecting personal care products to contain ingredients that will maintain the results of medical cosmetology treatments.Therefore,“effective”skin care brands are increasingly aiming to expand into the pre-and post-care space fo

109、r medical cosmetology,with a view to gaining early-mover advantages in this new space.-In August 2024,as part of its plan to expand into the medical cosmetology and light medical beauty fields,LOreal acquired a 10%stake in Galderma,a Swiss skincare group,to explore the medical beauty market and gene

110、rate growth for the brand17.In 2024,domestic beauty companies started to embrace short drama marketing as a branding tool to drive traffic and user fission on e-commerce platforms.Brands such as KANS received wide acclaim and grew in popularity after launching short dramas that told their brand stor

111、ies and included links to their products18.Festival celebrationsAs reported in November 2024,beauty products delivered a remarkable performance in 2024,with gross merchandise volume across integrated e-commerce platforms growing by 27%compared to the prior year19.This performance was partly driven b

112、y the introduction of significant discount policies,coupon issuance and the distribution of red envelopes in livestreaming sessions during the lengthened Double 11 Shopping Festival.-Local brands such as Winona,Kefumei and Chando gained spots on Tmall Beautys Top 20 list due to their strong sales.Of

113、 course,mature brands that offer impactful,quality products can gain significant advantages over their competitors in the current environment,as local beauty brands are delivering a remarkable performance by prioritising their quality-to-price ratio.Economic activitiesShift in trendsNote:a.KPMG anal

114、ysisExpansion into overseas marketsGiven the increasingly fierce competition in the domestic market,domestic cosmetics companies are looking to the global market for further growth.Data released by General Administration of Customs of the Peoples Republic of China shows that cosmetics exports are st

115、eadily rising,with total exports reaching CNY 7.2 trillion in 2024,as companies continue to expand overseas.-According to the 2024 Guangzhou Cosmetics Industry White Book released during the second Guangzhou Cosmetics Week,as of 30 November 2024,Guangzhou was home to 56%and 30%of all cosmetics manuf

116、acturers in Guangdong province and China,respectively,with 1,841 cosmetics manufacturers based there.The citys cosmetics industry also ranked first in China in terms of its annual output value,which stood at more than CNY 100 billion and accounted for over 70%of the industrys total annual output val

117、ue in the province.In the first three quarters of 2024,cosmetics manufacturing in Guangzhou maintained strong growth momentum,and its industrial added value increased by 46.6%21.Market dynamicsHealth and beautyImpacta15 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland

118、 and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Very negativeVery positiveNegativeNeutralPositiveEconomic activitiesAs consumers shift their focus towards qual

119、ity and wellness offerings,the food and beverage sector is embracing innovative AI-driven technologiesNote:a.KPMG analysisFestival celebrationsAccording to Syntun,during the Double 11 Shopping Festival in 2024,cumulative sales across integrated e-commerce platforms and livestreaming platforms reache

120、d CNY 1,441.8 billion,up 26.6%YoY,with sales of food and beverages reaching CNY 64 billion,accounting for 5.4%of total sales,up 11.6%YoY23.-Sales of liquor during the Mid-Autumn Festival and National Day holiday met expectations.Peak times for consumption occurred prior to the holiday,when consumers

121、 began purchasing gifts,holding banquets and gatherings,and engaging in other holiday activities.As a result,sales peaked during the run-up to the holiday;and consumption remained relatively stable during the holiday,when most consumers were travelling24.Shift in trendsA growing shift towards sugar-

122、free,low-fat and gluten-free products has been driving innovation in the beverage sector.As new flavours,experiences and concepts stimulate demand,opportunities are being created to integrate new and existing industries.-In a survey focusing on Chinese consumers awareness of additives,about 70%of re

123、spondents said they held a negative attitude towards additives in food,and were even concerned that they might be buying products that contain additives24.The application of new quality productive forces is improving product efficiency and quality,allowing customers to enjoy more personalised and cu

124、stomised goods and services.-According to a survey on the state of AI conducted by McKinsey in 2024,the number of AI use cases grew significantly in the past year.72%of organisations reported that they use AI in at least one business function,significantly higher than the figure of 50%reported in th

125、e past six years25.-A global survey conducted by TraceGains showed that,in 2024,most food and beverage brands were attempting to integrate AI technology into their operations to gain a competitive edge.Specifically,36%of brands had already tested the technology in their R&D of new products,and 53%of

126、 brands were considering using AI in the purchase and development of ingredients and formulas25.Government functions and policiesIn 2024,China introduced a number of policies to provide specific guidance for the development and innovation of the food and beverage industry.-In September 2024,the Stat

127、e Council issued the Opinions on Implementing the“Big Food”Concept and Building a Diversified Food Supply System,which outlined the need to build a diversified food supply system and the goal of improving the countrys food supply chain,food varieties,supply diversity and food quality by 2035 in orde

128、r to meet the increasingly diverse demand for nutritious and healthy food.-In October 2024,the State Administration for Market Regulation held a meeting to deliver administrative guidance on food safety amid the emergence of new types of business and business models.The guidance prioritised food qua

129、lity and safety,promoted the healthy development of Chinas platform economy,and laid out plans to cultivate a diversified supply system to improve the quality of consumers goods and provide new growth momentum.In 2024,Chinas food and beverage market continued to recover,with grain,oil and food;bever

130、age;and tobacco and alcohol product sales growing 9.9%,2.1%and 5.7%,respectively,with basic daily necessities showing robust growth.In 2024,domestic demand for food and beverages rebounded and continued to grow,with beverage sales of units above the designated size reaching CNY 320 billion,up 2.1%Yo

131、Y,and retail sales of grain,oil and food of units above the designated size reaching CNY 2,173.7 billion,up 9.9%YoY.In 2024,liquor companies faced mounting pressure due to various factors.Wind data shows that as of 31 December 2024,the liquor sector in the A-share market had fallen 17.19%during the

132、year22.-Almost all of the 19 liquor companies listed in the A-share market experienced share price declines and saw their market capitalisation shrink.As market demand remained sluggish,several liquor companies responded by reducing their annual business goals for 2024.In addition,given high levels

133、of inventory and price fluctuations,liquor companies had to resort to price adjustments22.Market dynamicsFood and beverageImpacta16 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliate

134、d with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Food and beverage consumption rebounded,driven by cultural tourism and holiday celebrations;and Chinese F&B brands took part in a wave of expansion overseasIn H2 2024,as a result of targeted policies

135、,innovative business models and the countrys appealing local cultures,China saw an upsurge in consumption during the Mid-Autumn Festival and National Day holiday,especially in cultural tourism,which is integrating traditional Chinese culture with modern leisure tourism.-During the Mid-Autumn Festiva

136、l and National Day holiday,specific events were planned and carried out to promote local cultures across China,including large light shows in the classical gardens of Suzhou,local cultural shows at West Lake in Hangzhou,and a food festival in Changsha.These events showcased traditional cultures and

137、provided tourists with an exciting new experience,while also raising the notoriety of these cities.In addition,the“Double Festival”effect served as a catalyst for brands to update their offerings,and many of them launched new products focusing on the Mid-Autumn Festival and National Day.-Catering br

138、ands launched a variety of new products during the 618 and Double 11 periods.For example,Haidilao Hot Pot launched six new winter products,such as“extra strong fungus soup hot pot,”as well as dishes consisting of mutton-chops from Inner Mongolia white cashmere goatsa national geographical indication

139、 product of Chinamutton rolls from the Loess Plateau and Chinese yams from Hongdian,Wenshan,Yunnan29.Economic activitiesChinas active cultural tourism market has been driving consumption in food and beverage,transportation,entertainment and other related sectors.According to the National Bureau of S

140、tatistics,food and beverage companies in China generated revenue of CNY 5.6 trillion in 2024,up 5.3%YoY.-According to the World Federation of Chinese Catering Industry,from a regional perspective,first-tier cities experienced a slowdown in food and beverage sales,while second-tier cities saw notable

141、 growth.In terms of revenue,Chongqing and Chengdu ranked first and second,each with revenue exceeding CNY 140 billion,cementing the two cities status as powerhouses in the food and beverage sector.They generated a combined revenue of CNY 332.17 billion in the first three quarters of 2024,accounting

142、for 8.4%of total food and beverage revenue in China26.In 2024,the consumer market strengthened following the issuance of a new round of coupons.The coupon initiatives proved to be a key driver for the prosperity of the food and beverage industry.-At a press conference,Guangzhou announced a plan to i

143、ssue consumption coupons worth CNY 100 million under the“Eating in Guangzhou”initiative,with a view to sustaining steady growth and boosting consumption27.-The Shanghai Municipal Government issued CNY 500 million in coupons for use in restaurants,hotels,movie theatres,sports facilities and other ven

144、ues28.Festival celebrationsNote:a.KPMG analysis2024 was a key year for Chinese food and beverage brands as an increasing number of enterprises accelerated their efforts to“go global.”During the year,many domestic food and beverage companies announced plans to expand into overseas markets and go glob

145、al in the long term.-Jasmine Milk White opened its first store in Sydney,which marks its third overseas store following openings in New York City and Bangkok.The company also launched a customised cinnamon-based bubble tea for Australian consumers.-Fish with You held a grand opening for its first st

146、ore in Singapore,which is its second location in Southeast Asia after its location in Malaysia.-To mark the 2-year anniversary of the opening of its first store,Cotti Coffee announced that the brand had more than 10,000 stores around the globe,with its 10,000th location having opened in the Pearl Is

147、land,Doha,Qatar30.Government functions and policiesExpansion into overseas marketsIn 2024,China implemented an array of policy measures to support continuous development and innovation in the food and beverage industry:-In July 2024,the State Council issued the Opinions on Promoting the High-Quality

148、 Development of Services Consumption,which outlines the need to improve the quality of catering and accommodation services and promote traditional Chinese cuisine.Established brands at home and abroad are encouraged to set up flagship stores in China.-In June 2024,five departments including the Nati

149、onal Development and Reform Commission(National Development and Reform Commission)and the Ministry of Commerce jointly issued the Measures on Creating New Consumption Scenarios and Cultivating New Growth Points,which is designed to cultivate new consumption scenarios and sub-sectors and encourage la

150、rge-scale food and beverage store chains to expand in third-tier cities or below.The Measures also provide support for technology-based upgrading and the digital transformation of the industry.Very negativeVery positiveNegativeNeutralPositiveMarket dynamicsFood and beverageImpacta17 2025 KPMG Adviso

151、ry(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.17 2025 KPMG Advisory(China)Limited,a limited l

152、iability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Sub-sector trends:Luxury and fashionIn 2024,the growth rate of the consumer

153、 market as a whole slowed down,and consumer confidence declined in relation to high-end purchases,reflecting a more rational and prudent attitude among consumers.Against this backdrop,the government has implemented visa-free policies,optimised immigration and enacted other policies to strengthen the

154、 rebound in duty-free sales,tap the potential of the market and ultimately boost consumption of luxury goods.Recently,consumers have shown more interest in experience-oriented luxury goods as opposed to physical luxury goods.Products that retain their value have become the new favourites of many con

155、sumers,which indicates that more pragmatism could take hold in the market in the future.In terms of duty-free shopping,the implementation of the“closed customs”policy in Hainan should drive a rebound in domestic luxury consumption,increase inbound tourism consumption from abroad,make duty-free shopp

156、ing more appealing,and provide the high-end retail industry with greater development space.As luxury brands become increasingly polarised,in the future,most traditional brands likely will withdraw from the luxury camp and become high-end consumer goods,which would lead to a market in which luxury br

157、and customers are more clearly divided into different levels.18 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited

158、by guarantee.All rights reserved.Products that retain their value are finding favour,and the duty-free luxury market is expected to recoverFaced with macro-economic pressure and muted consumption,in 2024,Chinas luxury market continued to be sluggish.As a result,consumer demand for value-retaining an

159、d low-unit-price products grew,and luxury consumer goods such as jewellery,cosmetics and glasses have become popular choices because of their unique investment value and fashion attributes.Going forward,thanks to the continuous optimisation of the policy environment and increasing inbound and outbou

160、nd tourism,the duty-free luxury goods market is expected to usher in a new growth cycle.Consumers prefer products that retain their value,and the duty-free luxury market is expected to recoverRevenue forecast for luxury markets in major jurisdictions(USD billion)Source:StatistaThe Japanese market st

161、ands out in the differentiated global luxury marketAccording to data from Statista,China,the US and Japan were the top three luxury markets in the world in 2024,with a scale of USD 101.7 billion,USD 96.4 billion and USD 28.3 billion,respectively,accounting for 48%of the total global market.Chinas mi

162、llennials number about 400 million,which is five times the total of their American counterparts.In the future,they may become the key driver of the global luxury market.However,the luxury market is subject to consumption spillover due to weak domestic demand and the recovery of outbound tourism.Sinc

163、e 2019,the US market continues to lead the pack(Data as of December 31,2024).Despite macro-economic pressure and fluctuations in consumer confidence,the countrys luxury market revenue is still expected to reach USD 96.4 billion in 2024.Japan has benefited from the depreciation of the JPY and an infl

164、ux of international tourists,which has promoted the growth of tourist retail consumption.Revenue in Japans luxury market is expected to reach USD 28.3 billion in 2024 and experience significant growth over the next five years.Europes luxury market has enjoyed support from inbound tourists,especially

165、 in first-tier cities and resorts in southern Europe,but its growth rate has begun to slow.In particular,the UK and Germany have limited growth potential.2019-2024CAGR2024-2029CAGR5.8%3.4%1.7%3.0%3.3%6.9%6.6%7.1%4.4%1.9%3.7%2.2%6.0%3.1%76.6101.7143.281.696.4119.426.028.331.10.020.040.060.080.0100.01

166、20.0140.0160.020192024E2029EChinese MainlandUSAJapanFranceUKHong Kong SARSingapore19 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private Eng

167、lish company limited by guarantee.All rights reserved.Products that retain their value have become the new favourites of consumers,indicating that more pragmatism could appear in the market in the futureIn the face of uncertain economic prospects,consumers are showing a more cautious attitude toward

168、s spending.As a result,value-retaining and low-price products have become their first choice.Many fashion and luxury brands had low expectations for 2024,but high-end jewellery and rare gemstones were still popular investments among consumers.These segments were a focus area for consumers looking fo

169、r stable investments,allowing them to continue to find success in the changing market.According to data from Statista,in 2024,luxury watch and jewellery revenue was about USD 157.6 billion,representing an increase of 4.65%over 2023 and accounting for about 33%of global luxury revenue31.Enterprises t

170、argeting high-end luxury goods market may be able to capitalise on gold price fluctuationsIn recent years,gold prices fluctuated,and consumers became more cautious about buying gold jewellery,leading to lower demand in the gold market.According to data from the China Gold Association,total domestic

171、gold consumption in the first three quarters of 2024 was 741.732 tons,down 11.18%from the same period last year.Within this amount,consumption of gold jewellery fell sharply,down 27.53%YoY.Conversely,demand for gold bars and coins trended upward,recording YoY growth of 27.14%and reaching 282.721 ton

172、s in total.These contrasting figures show that while overall gold consumption has declined,interest in gold as an investment is still exuberant32.For example,by focusing on high-end gold products and unique gold inlay designs,Laopu Gold is attracting high-end consumer groups,and the company is expec

173、ted to gain a larger share of the market amid fierce competition33.Although overall gold consumption is decreasing,the high-end market is growing steadily.With the continuous expansion of the luxury market,especially in China,this trend has become increasingly clear.The growth of the high-end market

174、 represents a huge development opportunity for gold enterprises that are committed to shifting their positioning towards the high-end market and transforming into luxury brands.Forecast of global luxury sub-category revenue,2023-2029(USD billion)200.90169.8090.7883.0833.190.0050.00100.00150.00200.00

175、250.00Luxury watchesand jewelleryLuxury andfashionLuxury leatherproductsPerfume andcosmeticsLuxury glasses20232024E2029ESource:Statista20 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms aff

176、iliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Hainans“closed customs”policy could expand the duty-free economy and drive the recovery of the luxury marketThe implementation of the“closed customs policy in Hainan could drive the return of d

177、omestic luxury consumption,increase foreign inbound tourism consumption,enhance the appeal of duty-free shopping,and present the high-end retail industry with greater development space.Hainans luxury market is rapidly growing.In the list of Chinas core cities for luxury consumption in 2023,Sanyas lu

178、xury consumption surpassed that of Guangzhou,ranking third in the country behind Shanghai and Beijing.Important tax incentives such as the offshore duty-free policy,duty-free stores in Sanya,and tax refunds on departure will continue to promote the diversified development of tax exemption and rebate

179、 operations,which would effectively drive consumption by domestic and foreign tourists and provide greater momentum for Hainans duty-free luxury market.In the overall plan for the construction of Hainan Free Trade Port released in 2020,the tax policy after customs closureparticularly zero tariffs an

180、d the simplified tax systemhas proved to be very attractive to taxed retailers.oZero tariffs:With the implementation of the“closed customs”policy and simplified tax system across the island,imported goods that are not included in the import tax list are allowed to enter Hainan Free Trade Port withou

181、t being subject to import tariffs.oSimplified tax system:As part of the island-wide“closed customs”initiative,existing VAT,consumption tax,vehicle purchase tax,urban maintenance and construction tax,education surcharges and other taxes will be combined in a simplified manner in accordance with the l

182、aw,and sales tax will be collected for the retail sale of goods and services.After customs is closed for the free trade port,imported consumer goods will enjoy zero tariffs,and the sales tax rate in the retail sector will be lower than the current VAT rate.This policy makes the tax burden of taxed r

183、etail brands opening stores in Hainan Free Trade Port similar to that of offshore duty-free operators,enabling taxed retail brands to operate at a price level close to that of duty-free stores.Difference in tax cost between regular retailers and offshore duty-free stores in HainanOverseasHainanBefor

184、e customs closureAfter customs closureOverseassuppliersHainan Centralised Purchase center in the comprehensive bonded zoneOverseassuppliersHainan Centralised Purchase center inside/outside the zoneExemption from tariffs,import VAT,consumption taxTariffs,import VAT,consumption tax leviedDuty-free lic

185、ensedstore Retail businessstore 4%franchise fee for duty-free goodsNo VAT leviedTariff exemptionNo sales taxesB2B:No sales tax13%VATMinistry of FinanceTourists,local residentsDuty-free licensedstoreRetail businessstore4%franchise fee for duty-free goodsNo sales taxes levied B2C X%sales taxMinistry o

186、f FinanceTourists,local residentsSource:Administrative Measures of the State Taxation Administration of The Peoples Republic of China on Value-added Tax and Consumption Tax Exemption for Duty-free Goods Sold by Offshore Duty-free Stores in Hainan,Announcement of the General Administration of Customs

187、 on Offshore Duty-free Shopping Policies in Hainan for Visitors,Guoyuan Securities(Hong Kong)21 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a

188、private English company limited by guarantee.All rights reserved.Differentiation in brand price strategy could lead to a market in which luxury brand customers are more clearly divided into different levelsReports in November 2024 indicated that,in the context of the overall sluggish performance of

189、the luxury industry,some second-tier luxury brands have been trying to regain market share by reducing prices,while first-tier luxury brands are still steadily raising prices.-According to financial reporting,in Q3 2024,the revenue of LVMH Group dropped 3%YoY to EUR 19.08 billion,and Hermes Groups c

190、omprehensive sales revenue reached EUR 11.2 billion in the same period,representing an increase of 11%YoY,which was slower than in the same period in 202334.According to the 2024 Research on the Global Luxury Market report,due to frequent price increases by several luxury brands,to some extent,globa

191、l luxury consumers have become listless,which has led to a gradual reduction in luxury spending and shrunk the global luxury consumer base by about 50 million in the past two years.In particular,young consumers and middle-class individuals were more likely to leave the market.As luxury brands become

192、 more polarised,in the future,most traditional brands could withdraw from the luxury camp and become high-end consumer goods.A small number of ultra luxury brands may maintain their brand positioning and move to an even more premium level,serving only high-net-worth consumers,resulting in a market i

193、n which luxury brand customers are more clearly divided into different levels.The demand for mass customisation of luxury goods is forcing leading brands to re-examine existing manufacturing processesWith the rising demand of high-net-worth consumers for high-end customised products,luxury brands ar

194、e re-examining their existing manufacturing processes.Historically,they have been considered lacking in technological innovation,but luxury goods manufacturers have recently taken the initiative to adopt a series of cutting-edge digital technologies,such as 3D printing,data analysis and material sci

195、ence research,while also integrating augmented reality(AR)technology and AI,in order to improve their production processes.Brands are now using digital technology to simulate the in-store shopping experience on e-commerce platforms,and also enhance the physical store experience.AI is currently the m

196、ost popular technology in the luxury sector because brands can use it to enhance the customer experience and reach a wider audience.At the same time,enterprises are increasingly using virtual reality(VR),augmented reality(AR)and other technologies in commerce to enrich the overall consumer experienc

197、e and bring high-quality content to online marketing.Meanwhile,3D printing is becoming increasingly popular in the field of luxury fashion,where enterprises are using it to create complex design elements without the need for moulds31.22 2025 KPMG Advisory(China)Limited,a limited liability company in

198、 Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.22 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a memb

199、er firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Sub-sector trends:Apparel and footwearIn 2024,domestic demand and consumption slowed down for the apparel sub-sector.Howev

200、er,enterprises recorded impressive online sales,as innovative online retail models helped them better promote consumer spending.On one hand,during the year,consumers shifted their focus towards functional items,especially outdoor clothing items that are suitable for a variety of scenarios and warmth

201、-retaining products,which became the go-to items for people who were travelling.On the other hand,by adopting omni-channel marketing and enhancing their supply chains,apparel and footwear manufacturers seized new opportunities to transform and upgrade.In 2024,clothing products that incorporate techn

202、ological and brand elements became a bright spot in the consumer market.Meanwhile,many enterprises pursued a blue ocean strategy and expanded into overseas markets by launching stores and engaging in cross-border e-commerce,which helped them expand their popularity among consumers at home and abroad

203、.23 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Benefitting from product di

204、versification and omni-channel marketing,the apparel and footwear sector achieved high-quality developmentProduct diversification and omni-channel marketing were two key growth driversIn the face of increasing competition in the marketplace,Chinas apparel and footwear brands expanded their product o

205、fferings to meet the diversified needs of consumers.By adopting an omni-channel approach,they were able to reach both in-store consumers and online users and enhance consumer coverage and engagement.Meanwhile,apparel and footwear brands continued to optimise their domestic and global supply chains t

206、o improve productivity and product quality,providing strong support for their sound and sustainable development.Omni-channel marketing and enhanced supply chains helped drive industrial upgradingBy engaging in omni-channel marketing and enhancing their supply chains,apparel and footwear manufacturer

207、s seized new opportunities to transform and upgrade.By integrating online and offline sales channels,brands can reach a wider range of customer groups and provide a better user experience.In addition,as a result of their effort to enhance supply chains,they were able to improve productivity,shorten

208、product turnaround times and enhance inventory management,while also reducing operating costs.Bellea well-established apparel and footwear group in Chinawas recently able to successfully maintain steady growth across its group by adopting a multi-brand strategy and omni-channel approach and engaging

209、 in digital transformation.Belle attributed its success to these three key factors35.In addition,Belle leveraged its own sales channels such as its WeChat mini-programme and the Belle shopping app to enhance customer stickiness.Through its efforts both online and offline,Belle cultivated a stream of

210、 private domain traffic through its stores on various e-commerce platformsincluding Tmall,JD,and Vipshopas well as through livestreaming sessions.A fast fashion e-commerce platform has used a new technology-driven digital model to transform the traditional garment supply chain.This flexible,on-deman

211、d“Small Order,Quick Response”model enables the company to balance supply and demand and quickly respond to customers.As a result,the company has significantly improved its competitiveness,capital efficiency and productivity and reduced prices,and it has been able to share gains with its customers36.

212、According to Statista,in 2023,Chinas e-commerce brands JD and Vipshop ranked first and fifth,respectively,in global fashion e-commerce platform sales,thanks to their robust operating and supply chain management capabilities.Source:StatistaGlobal fashion e-commerce platforms by net sales in 2023(USD

213、million)202310,81712,06212,33828,22531,275EnterpriseVipshopNikeWalmartSHEINJD24 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English

214、company limited by guarantee.All rights reserved.Companies looking to expand overseas are increasingly focusing on technology and brandingNearly two years after the pandemic,Chinese apparel brands are rushing to go global.-According to Winds Shenwan textile and garment manufacturing data,in recent y

215、ears,foreign sales have accounted for around 25%of the total sales of Chinas listed apparel companies.Foreign sales as a share of total sales have fluctuated and mostly risen since H1 2021,climbing from 20.1%in H1 2021 to 25.3%in H1 2024.At the end of 2023,according to a survey of Chinas“100 key tex

216、tile and garment brands”conducted by the Ministry of Industry and Information Technology,among 46 consumer brands surveyed,32.6%had opened a brick-and-mortar store overseas,and 21.7%were operating in overseas markets through cross-border e-commerce.Due to its proximity to China,Southeast Asia was a

217、preferred target market for Chinese fashion brands expanding overseas,while the European and American markets,with their deep foundations in the fashion industry,were also attractive destinations due to the sectors popularity and loyalty among consumers39.-For example,in H1 2024,Hailan Home generate

218、d revenue of CNY 161 million,up 25.44%YoY,from its 68 overseas stores,including nearly 60 across Malaysia,Thailand,Singapore,Vietnam,the Philippines and other Southeast Asian countries.These markets,with their significant spending power and potential,have become key targets in Hailan Homes overseas

219、expansion plans40.-According to GlobalDatas recent 2028 Garment Market in Germany report,SHEIN became the fourth-largest fashion brand in Germany in 2023,and it is expected to climb in the rankings in 2024 based on its fashionable and cost-effective products and digital,on-demand,flexible supply cha

220、in41.Share(%)of foreign sales for listed textile and garment companies in China(2021-H1 2024)Source:WindFitness and outdoor recreation became new hotspots,and demand for sports clothing grew more diverseAccording to Tianyancha,as of 3 December 2024,China had 257 outdoor clothing-related companies,an

221、d from January to November 2024 alone,19 were newly incorporated,4 more than the number incorporated during the entirety of 2023.-According to data released by Tmall,during the Double 11 Shopping Festival,sales of bicycles,cycling outfits and cycling equipmentthe“three major areas of cycling”each in

222、creased by more than 100%,including 300%sales growth for road bicycles,230%for bicycle meters and accessories,and 210%for cycling goggles37.-According to the 2023 China Fitness Industry Data Report released by the General Administration of Sport of China,in 2023,55.41%of fitness consumers were women

223、.This group has become a major contributor to overall fitness consumption,reflecting modern womens pursuit of a healthier life;and their unique choices and preferences are having a significant impact in the field of consumption38.20.12%24.89%25.50%28.50%23.94%26.04%25.25%2021H120212022H120222023H120

224、232024H125 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.25 2025 KPMG Advisor

225、y(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Sub-sector trends:Health and beautyIn 2024,China

226、s cosmetics market experienced an overall slowdown,but the shopping festivals carried out on online e-commerce platforms helped boost consumption and drive rapid growth in gross merchandise value(GMV)for cosmetics products.Chinese brands increased their investment in R&D to meet consumer demand,espe

227、cially the growing demand for better skincare products for children and for medical beauty products.They also adopted short drama marketing as a branding tool to drive user fission.During the year,many domestic cosmetics companies explored overseas markets and implemented strategic plans to expand t

228、heir market presence abroad.Intensifying competition led to greater polarisation in the beauty and personal care market,with super high-end brands and affordable brands dominating the market based on their premium service and higher cost performance,respectively,squeezing the space for brands in the

229、 middle.In terms of raw materials,consumers tended to focus more on core ingredients rather than just being able to try the product and feel it.As a result,products that used healthy and environmentally-friendly sources stood a better chance at winning over customers.26 2025 KPMG Advisory(China)Limi

230、ted,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The beauty market rebounded due to the significant incentive

231、s that were offered during the Double 11 Shopping FestivalIn 2024,with the beauty market experiencing a slow down and sluggish consumer confidence,beauty brands looked to the Double 11 Shopping Festival to boost their sales.To this end,they offered significant discounts and provided better touch poi

232、nts to mobilise consumers and encourage them to spend.-According to data released by Syntun,during the Double 11 Shopping Festival from 2022 to 2024,sales of beauty products fluctuated and grew.Notably,in 2024,the market for beauty products experienced a robust recovery,growing more than 20%YoY comp

233、ared with 2023.Purchases grew significantly due to effective incentives,including a prolonged pre-sale period,issuance of consumption vouchers and distribution of red envelopes42.Source:SyntunThe beauty and personal care sector grew beyond expectations amid the rise of domestic brands and consumers

234、heightened focus on product sustainabilityDomestic beauty brands gained popularity,and product sustainability drew consumers attentionIn 2024,sales of cosmetics during the Double 11 Shopping Festival exceeded expectations,and skincare became the fastest-growing sub-category.Domestic brands appeared

235、frequently on lists of the best-selling beauty and personal care products42.Many beauty brands increased their investments in initiatives to develop innovative,environmentally-friendly skincare products in response to consumers growing preference for natural and green ingredients and their pursuit o

236、f a sustainable lifestyle.Taobao&Tmall remained popular,and Douyin became a mainstream platform for the sale of personal care productsAs reported in November 2024,according to data released by Qingyan,beauty products saw double-digit growth in GMV across the three major domestic platforms,with YoY g

237、rowth of 25.8%for Taobao&Tmall,21.6%for Douyin and 10.5%for JD43.-The GMV YoY for makeup products on Taobao&Tmall was twice as high as that on the other two platforms.However,among the three platforms,Douyin enjoyed a clear lead in the field of personal care products,with the highest growth in GMV.G

238、oing forward,Taobao&Tmall are still predicted to be the leading platforms in the beauty and personal care subsector.Meanwhile,as a rising star,Douyin also has the potential to become a key sales channel in the beauty and personal care space,if the platform continues to pursue the operational and dev

239、elopment strategy that enables it drive GMV,enhance consumer stickiness,and expand its customer base and traffic.Source:QingyanSales of beauty products during Double 11 from 2022 to 2024(CNY 100 million)YoY GMV growth(%)for beauty and personal care products on Chinas main e-commerce platforms during

240、 Double 11 in 202482276996320222023202427.00%31.70%14.90%38.60%12.90%11.30%0.00%20.00%40.00%60.00%80.00%Taobao&TmallDouyinJDSkincareMakeup27 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms

241、affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Average ROIC(%)across different tiers of companies in the beauty and care sector(2019-2023)Source:WindNote:Based on the Shenwan Index for the beauty&care field,companies have been ranked by

242、market capitalisation(after removing outliers)across three tiers,each of which includes 10 companies.Source:WindNote:Enterprises have been divided into four tiers based on health industry data from CSI.The tiers are leaders,robust players,companies facing pressure and companies falling behind,which

243、correspond to the top 25,26th-45th,46th-75th,and 76th-100th enterprises,respectively,in the ranking of market capitalisation in the sector.Average ROIC(%)across the health sector(2019-Q3 2023)Leading beauty brands proved the most resilient,and SMEs needed to adjust their strategy in response to mark

244、et volatilityAccording to analysis by Wind,from 2019 to 2023,given sluggish economic growth in China,leaders in the beauty and skincare industry tended to experience declines in return on invested capital(ROIC),indicating that even highly-recognised brands struggled with performance amid economic pr

245、essure.However,these brands were more resilient during this period as they had stronger brand impact,profitability and risk management capabilities.In contrast,middle-and lower-ranked companies experienced greater setbacks,with their ROIC rebounding briefly in 2020 before falling into negative terri

246、tory(about negative 6.5%)in 2022.In 2023,as domestic demand rebounded,middle-and lower-ranked companies saw the most significant recovery in ROIC,highlighting both the flexibility and vulnerability of these enterprises.Overall,industry leaders significantly outperformed other firms both in terms of

247、stability and long-term growth,while SMEs needed to pursue product innovation and make enhancements to cost management and channel planning so as to achieve growth amid market volatility.The health sector made significant investments but experienced declining returnsThe health industry traditionally

248、 relies on huge investments,especially in medical equipment and services.According to Wind,the overall ROIC of the health industry declined over the past 5 years.In 2021,the ROIC of the“companies falling behind”tier stood at only 4.2%,reflecting high R&D,compliance and promotional costs,limited spen

249、ding power in the grassroots market,and low use of high-end equipment.In addition,with profits being squeezed by tighter regulations and the introduction of centralised procurement policies,combined with strong competition from foreign brands in the high-end market,local companies faced profitabilit

250、y pressure.Nevertheless,in the future,the“Healthy China 2030”initiative is expected to benefit the industry.Going forward,health companies that can enhance the added value of their products,improve their cost structures,penetrate into grassroots markets and expand their income models should be able

251、to improve profitability while driving the growth of the industry as a whole.-1001020304020192020202120222023LeadersCompanies facing pressureCompanies falling behind0510152020192020202120222023LeadersRobust playersCompanies facing pressureCompanies falling behind28 2025 KPMG Advisory(China)Limited,a

252、 limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The beauty and personal care market has become polarised,with bra

253、nds in the middle facing greater pressure Recently,the beauty and personal care market has grown more polarised.The two sides consist of super high-end brands that have strong brand impact,innovative capabilities and service quality that can attract consumers who are pursuing a premium luxury experi

254、ence,and affordable brands that have won the favour of the mass market for their cost performance.On the other hand,brands in the middle are being squeezed from both sides and facing difficulties in maintaining their existing market share,let alone expanding it.This development reflects a shift in c

255、onsumer demand and poses new challenges and opportunities for the development of the beauty and personal care sector going forward44.Market share of skincare brands by tier(%)(2022-2023)Source:NIQs retail research dataAI use cases are expanding and emerging as a new growth driver for the beauty sect

256、or Advancements in AI are introducing profound changes to the beauty industry,including in terms of how enterprises develop and market their products and provide personalised service.According to InsightAce Analytic,the value of the global AI beauty and cosmetics market is estimated to reach USD 16.

257、01 billion by 2031,reflecting a compound annual growth rate(CAGR)of 20.1%between 2024 and 2030.AI algorithms are being used to help customise skincare products based on consumers personal skin needs and preferences,as well as environmental factors46.This personalised skincare approach helps consumer

258、s better understand their own unique needs and enables companies to enhance consumer engagement and loyalty and offer personalised skincare solutions.Using AI models,beauty companies can gain better insights into consumer preferences and needs,more accurately predict and recommend products,and devis

259、e more efficient marketing plans.In addition,during the biological R&D stage,beauty companies can use AI models to discover ingredients with new biological functions,verify the efficacy of ingredients more accurately,improve R&D results,design and research proteins,simplify the R&D process for prote

260、in raw materials,and promote the biosynthesis and industrialisation of protein active ingredients.The 2024 Nobel Prize in Chemistry was awarded for work related to proteins that made use of AI technology.The winners successfully used an AI model to predict the structures of almost all known proteins

261、the building blocks of lifeand they successfully built new kinds of proteins.As life sciences AI gradually makes its way into the beauty sector,more and more enterprises in the beauty industry could harness this technology to pursue innovation.20.30%20.50%3.40%2.80%19.80%17.40%56.40%59.10%0.00%20.00

262、%40.00%60.00%80.00%100.00%FY2022FY2023Super high-end brandsHigh-end brandsMass-market brandsAffordable brands29 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG Internat

263、ional Limited,a private English company limited by guarantee.All rights reserved.With more ESG elements being integrated into beauty products,sustainability is becoming a key differentiator for beauty brands As the challenges posed by climate change become more challenging,and the importance of envi

264、ronmental protection and sustainability topics grows,consumers are becoming increasingly aware of the importance of green consumption to the sustainability of society as a whole.According to KPMGs recent report Beyond the noise:Orchestrating AI-driven customer excellence,53%of consumers are willing

265、to pay more for sustainable products,which indicates that consumers are becoming more focused on the importance of ESG issues47.Beauty brands are continuing to develop sustainable cosmetics as a key differentiator to attract consumers with ESG preferences,and this trend is only expected to grow in t

266、he future.According to Statista,the scale of the global natural cosmetics market was USD 13.86 billion in 2024,and it is expected to reach USD 18.64 billion in 2029,reflecting an expected CAGR of 6.11%between 2024 to 2029.In 2024,a collection of beauty brands collaborated globally to create the Trac

267、eability Alliance for Sustainable Cosmetics(TRASCE)to help address destructive events across the cosmetics supply chain.Relatedly,Chinese beauty brands have been adopting similar practices,with a number of brands joining forces to form the Beauty Sustainability Coalition to share resources and exper

268、iences across the industry,in a joint effort to address resource and environmental issues while exploring new ways to drive sustainability in Chinas beauty industry47.As health awareness rises,consumer demand for products with healthy sources is growingAs disposable income per capita and peoples hea

269、lth awareness rise in China,and population aging continues,there has been a growing demand for health products that protect and improve health,and health spending has become the new“holy grail”of the consumer market.-According to a survey conducted in 2024 on new consumer trends and characteristics,

270、health and wellness,healthy food,home health,and other health-related areas have become new hotspots in the consumer market.Increasingly,consumers are focused on buying healthcare products and supplements for nutritional purposes,and more people are choosing natural or organic food and buying produc

271、ts with pure,natural and additive-free ingredients48.Survey of consumer preferences in health spending in 2024(%)Source:Peoples Daily Online48.80%48.10%38.20%33.90%27.20%4.90%0.00%10.00%20.00%30.00%40.00%50.00%60.00%Respondents with a consumptionpreference for health&wellnessRespondents with a consu

272、mptionpreference for healthy foodRespondents with a consumptionpreference for medical healthRespondents with a consumptionpreference for home healthRespondents with a consumptionpreference for fitness andexerciseRespondents with a consumptionpreference for emotional healing30 2025 KPMG Advisory(Chin

273、a)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Innovation achievements are encouraging beauty and hea

274、lth companies to go overseas,and they are expanding their presence in the global market through multiple channelsInnovation in ingredients and formulas enables beauty companies to expand their product lines,and achievements in this area are also bringing new opportunities for the“big health”industry

275、 in China.For example,Chinese herbs,natural extracts and other ingredients are being widely used not only in functional skincare products,but also in healthcare products and medical products.Especially in overseas markets,products with these innovative,effective and safe ingredients and formulas are

276、 gaining popularity among consumers.According to the 2024 White Paper on the Overseas Beauty Market released by Magic Mirror Insight,Chinese beauty brands operating in overseas markets generated online sales of CNY 187.8 billion from 2023 to H1 2024,up 8%YoY,on Amazon,the main sales channel for beau

277、ty and skincare products.While North America was the stand-out market,Europe and Japan also became key targets for Chinese beauty brands given the environmental protection trends in these regions50.During the year,the“big health”industry continued to expand overseas.While Chinese medical and healthc

278、are companies are typically drawn to Europe and the US due to their sound regulatory environments and high product pricing,more companies are also exploring emerging markets,such as the Middle East and South America,due to their growing populations,and Southeast Asia and Central Asia,due to their ge

279、ographical advantages and involvement in the Belt and Road initiative.In addition,as the EU has relaxed restrictions on the sale of cordyceps products,Chinese companies have been attracting more attention in the Nordic countries healthcare product markets51.Personal care starts with“haircare”:consum

280、ers are focusing more on hair healthWhen it comes to personal care,in recent years,consumers who previously focused only on traditional facial and body care have been shifting their attention to hair and scalp care.This trend has been driving the demand for more refined personal care products in the

281、 market.In the haircare field,consumers have moved towards haircare solutions that integrate hair cleaning and care rather than just cleaning,and they have also developed more specific preferences in terms of the effects they are looking for.In 2023,the value of Chinas haircare market stood at CNY 5

282、5.9 billion,representing steady YoY growth of 13.4%,and the market is expected to reach the CNY 70 billion mark by 2026.As the pace of modern life quickens,many people are experiencing hair loss,hair breakage and other hair issues due to irregular schedules and other reasons.As a result,consumers in

283、creasingly prefer to buy haircare products that can help control these issues.In addition,as personal consumption rises,more people aim to improve their overall appearance,which is driving the beauty economy as a whole,and particularly demand for hair products.Hair growth devices,hair straighteners

284、and other hair beauty appliances have become widely popular among young consumers because of their unique efficacy.Going forward,scalp care could become a key area in haircare,as consumers become more interested in haircare products that solve a variety of scalp and hair quality problems and improve

285、 their scalp health 49.Value of Chinas haircare market(CNY 100 million,%)(2022-2026)Source:Qingyan0.00%2.00%4.00%6.00%8.00%10.00%12.00%14.00%16.00%0100200300400500600700800202220232024E2025E2026ESales(cny 100 million)YoY growth31 2025 KPMG Advisory(China)Limited,a limited liability company in Chines

286、e Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.31 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm

287、 of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Sub-sector trends:Food and beverageFor the food and beverage sub-sector,consumption growth in 2024 was relatively stable.Compared

288、 with normal periods,the Double 11 Shopping Festival featured an array of promotional activities that stimulated the market for daily consumer goods,which helped consumer demand recover and drove rapid sales growth.Meanwhile,with health awareness improving,consumers are favouring sugar-free,low-fat

289、and gluten-free products,and AI is increasingly being used to support peoples health planning.Amid the transformation of digitalisation and the development of AI technology,many enterprises are selling products through a multi-channel model that combines modern and traditional channels.Under this ap

290、proach,they are expanding their product sales channels in different ways,and coordinating development online and offline to drive steady sales growth.32 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent m

291、ember firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Food and beverage brands are focusing on high-quality raw materials,functionality and personalised trends to drive innovative developmentSource:iiMedia ResearchIn recent years,wi

292、th increases in peoples disposable income and improving awareness of the importance of a healthy lifestyle,the demand for balanced and healthy food options has expanded rapidly.According to data from iiMedia Research,the scale of Chinas functional food market increased from CNY 99.3 billion in 2013

293、to CNY 298.9 billion in 202253,reflecting a CAGR of 12%.From 2018 to 2022,the value of the market increased by nearly 60%,and this development trend is expected to continue over the next several years.In the China market,functional foods that can help strengthen immunity and relieve fatigue are part

294、icularly valued.At present,the boundaries of the health food industry are expanding.The sector no longer simply emphasises functionality;it now covers the entire food production processfrom crop cultivation to final product packagingto ensure the traceability and integrity of the supply chain.Master

295、 Zong Beverage Company plans to launch a series of high-quality water and tea drinks,including“Master YipinNutrition Lightness,”“Master QuanNatural Snow Mountain Mineral Water”and other health drinks.By offering these products,which also have medicinal features,the company aims to provide consumers

296、with a wider range of healthy drink options54.Driven by health trends,the functional food market expanded steadilyThe food and beverage sector posted a strong recovery and is expected to maintain its momentum in 2025On 30 July 2024 at a meeting of the Political Bureau of the CPC Central Committee,po

297、licymakers emphasised that the focus of economic policy should shift to improving peoples lives and promoting consumption.Against this backdrop,the food and beverage industry has recorded a strong recovery.According to Wind data,the food and beverage sector index declined slightly in the first half

298、of the year,and then rose by 24.61%in September,with various sub-sectors such as meat processing,alcoholic beverages,dairy beverages,seasonings and snacks all enjoying varying degrees of growth52.In 2025,the food and beverage industry is expected to continue to experience robust development and unde

299、rgo transformation and upgrading towards high-quality and diversified products.With consumers focusing on health and nutrition,the development of functional foods and health foodsparticularly those that are natural,organic,low-sugar,and high-proteinhas accelerated.In order to adapt to this developme

300、nt,enterprises are sparing no effort in R&D,with a view to creating new healthy food products that are rich in plant protein and trace elements.Forecast of the scale of Chinas functional food market,2013-2027(CNY 100 million)05001,0001,5002,0002,5003,0003,5004,0004,500CARG+12%33 2025 KPMG Advisory(C

301、hina)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Liquor delivered a strong performance,and marketing

302、 strategies were more focused on the C-endIn 2024,China Alcoholic Drinks Association regained momentum after undergoing an adjustment,and the market entered a transition period.Consumers focused on cost performance,causing liquor sales to fluctuate based on price changes.In the high-end and secondar

303、y high-end markets,although price sensitivity was high,demand still grew.According to the report in November 2024,the China Alcohol Association(CADA)expects that more and more companies will invest resources in the C end of the liquor industry in the future,triggering a new round of consumer centere

304、d competition55.In the first three quarters of 2024,Kweichow Moutais revenue reached CNY 120.776 billion,up 16.95%YoY.In Q3 2024,the total revenue of listed companies in the liquor sector rose to CNY 96.5 billion,reflecting the sectors overall growth trend.Awareness of consumer sovereignty is rising

305、,and the basic elements of the industrysuch as brand,quality,flavour,price and channelhave been restructured.At the same time,implicit needs related to areas such as experience,culture,health,and environmental protection are becoming more prominent,which has prompted liquor companies to move towards

306、 the C-end to attract and retain consumers.For example,Kweichow Moutai upgraded the Moutai Fan Festival to the Moutai Fan Carnival;during the Spring Sugar Festival,Wuliangye carried out activities such as card draws,games that involved matching ancient poems,and photo opportunities with the young ve

307、rsion of the famous ancient poet Su Dongpo;and Luzhou Laojiao held its“Jiaozhu Festival of Luzhou Laojiao”in several cities,including Chengdu,Qinhuangdao,Hangzhou,and Shenzhen.Digital transformation and AI technology are unstoppableAmid the digital transformation of global industries,AI is bringing

308、new changes to the food and beverage industry.According to data from Mordor Intelligence,the scale of AI in the food and beverage market in 2020 was USD 3.07 billion,and it is expected to reach USD 29.94 billion by 2026,representing a CAGR of more than 45.8%57.With the help of AI,enterprises are imp

309、roving supply chain efficiency,providing personalised services,promoting sustainable development and achieving autonomous operations,which enables them to reduce costs,boost efficiency and enhance their market competitiveness.Improving supply chain efficiency:Using AI-driven big data analysis and ma

310、chine learning,enterprises can make more accurate predictions and optimisations,such as predicting demand for materials,planning transportation routes,and adjusting the temperature and humidity of storage environments,thereby reducing losses,decreasing expenses and enhancing efficiency.Providing per

311、sonalised services:AI can generate highly customised product recommendations based on each consumers dietary preferences and purchasing behaviour.Such highly personalised services not only enhance user experience,but also drive sales growth.Promoting sustainable development:Using AI,enterprises can

312、improve resource allocation,reduce waste and optimise distribution networks,allowing them to reduce emissions and save costs.Companies can use smart sensors and Internet of Things(IoT)devices to monitor resource usage,and they can harness machine learning to optimise process flows and reduce waste.A

313、utomated operations:Advances in AI technology enable the automation of a number of strenuous and repetitive tasks,delivering significant benefits for automated assembly lines,unmanned logistics centers and intelligent cleaning systems.These capabilities lower labour intensity and boost production ef

314、ficiency.Strengthening omni-channel strategiesIn the future,enterprises will probably continue to pursue omni-channel strategies,with the aim of coordinating the development of online and offline operations.In online channels,companies will continue to make services more convenient,personalised and

315、customised;and in offline channels,they will focus on improving the consumer experience and shaping their brand image.At present,enterprises in the food and beverage industry are actively integrating into various e-commerce platforms(such as Taobao,JD and Pinduoduo)and social media platforms(such as

316、 WeChat applet,TikTok store and Kwai e-commerce)to expand their sales channels.At the same time,they are also working to build their own online stores and integrate them with their physical stores,with a view to enhancing customers shopping experience and brand awareness.In addition,emerging models

317、such as new retail,community group buying,and cross-brand alliances are becoming key drivers of industry development.Hybrid business models such as Hema Fresh allow consumers to conveniently purchase healthy beverages,and promotional efforts in content marketing and on video platforms are boosting s

318、ales of these products.Community group buying,with its unique word-of-mouth characteristics,has quickly risen in popularity.Platforms such as Pinduoduo are attracting large numbers of users from grassroots markets through group buying activities.Meanwhile,Yunji is recruiting merchants and using dist

319、ribution mechanisms to reach areas that have not been covered by traditional e-commerce platforms.34 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limit

320、ed,a private English company limited by guarantee.All rights reserved.34 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company

321、 limited by guarantee.All rights reserved.Sub-sector trends:RestaurantsChinas restaurant sub-sector recorded a robust recovery in 2024,thanks to the improvements in the overall consumer market and various cultural events and travel coupon initiatives.In recent years,healthy diet has become a new tre

322、nd,and many restaurants are upholding nutritious and healthy dietary concepts and offering“low oil,“low salt and“low sugar“options to meet the personalised needs of consumers.In addition,digital transformation and cross-border integration are accelerating the efficient development of restaurants and

323、 encouraging them to embrace digitalisation,intelligence,convenience and quality.Chinas restaurant sector is still very enthusiastic about going global,with many restaurants having gradually expanded into overseas markets and introduced local flavours there.Meanwhile,restaurant chains are actively p

324、enetrating into downmarket segments to cultivate new scenarios and access new markets.35 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private

325、 English company limited by guarantee.All rights reserved.Entrepreneurship in the restaurant sector is becoming more prudent,cross-border integration is accelerating,and companies are penetrating downmarket segments and going global in order to expandCatering revenue dropped to a 10-year low as stru

326、ctural problems posed challengesAffected by factors such as low consumer confidence,increasing economic pressure and rising costs in the restaurant sector,Chinas retail sales of consumer goods grew slowly from January to November 2024.In the restaurant sector,total national catering revenue rose by

327、only 5.7%YoY,with only 3%growth in July;both of these figures were the lowest recorded in the last decade(excluding 2020 and 2022).Meanwhile,structural problems such as the saturated takeaway market and weakening demand for high-end catering have made operations more difficult in the restaurant sect

328、or57.Source:National Bureau of StatisticsYoY growth by month and YoY cumulative growth of national catering revenue from 2014 to November 2024(%)Greater operating difficulties in the restaurant sector have caused entrepreneurs to become more prudentIn recent years,running a small boutique has become

329、 an ideal project in the minds of many regular employees who are eager to escape the 996 work schedule.However,the reality of the restaurant sector is that it is full of challenges.According to Tianyancha,about 2.67 million(including all operating statuses)were established in 2024.The number of new

330、restaurants opened in the year represented a decline of 16.5%compared to the 3.23 million witnessed in 2023.However,among the incremental restaurants,only 360,000,or 13.4%,were operating as of 27 February 2025.Additionally,based on available data,55.8%of those restaurants that were launched in 2019

331、had been shuttered within five years,indicating a survival rate of less than 50%.The high closure rate in the restaurant sector reflects the difficulties faced by new restaurants.Factors such as fierce market competition,rising operating costs and management complexity have put great pressure on ent

332、repreneurs,leading to a decline in the number of newly established restaurants.Status of restaurants in China from 2019 to 2024(Unit:10,000)Source:Tianyancha Professional Edition-100.00-50.000.0050.00100.0020142015201620172018201920202021202220232024YoY cumulative growthYoY growth by month0100200300

333、201920202021202220232024ClosedSurvivingActive36 2025 KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.As consumer confidence continues to be weak and enterprises exit high-end categorie