Industries related to experiential consumption such as 'food, entertainment, accommodation,' and development-oriented consumption like 'education, health, and wellness' are burgeoning. Service consumption is gradually becoming the core driver of China's consumption growth.
According to Zhitong Finance APP, Huachuang Securities released a research report stating that the development of China's macroeconomy has significantly improved residents' living standards, leading to an evolution in consumer demand and a shift in the main theme of the consumer industry. Over the past two decades, basic survival-oriented physical consumption such as 'clothing, food, and daily necessities' has successively reached consumption saturation and price upgrades. Around 2015, sales volumes of major consumer goods categories in China, including alcoholic beverages, drinks, air conditioners, and mobile phones, began to plateau, with growth rates declining in stages. The next decade is expected to be characterized by quality enhancement, with price increases becoming the dominant logic of consumption. The current slowdown in the growth rate of commodity prices indicates that the upgrade of commodity consumption has matured. In contrast to functional and basic survival needs, the core focus of service consumption lies in higher-level life experiences (such as emotional resonance and social recognition) and value-oriented demands (such as personal development and self-fulfillment), which are expected to become the main theme of China's consumption in the next decade.
The main viewpoints of Huachuang Securities are as follows:
Supply and demand synergy, policy tailwinds propel the service consumption industry into a golden decade
Demand Side: The consumer industry is forming two new engines. Currently, experiential consumption related to lifestyle, such as 'eating, drinking, entertainment, and accommodation,' and developmental consumption like 'education, health, and wellness' are emerging sectors. Service consumption is gradually becoming the core driver of China’s consumption growth. At the same time, the integration of services with physical goods is rapidly evolving; whereas previously physical goods drove service consumption, now services drive physical goods, with physical goods themselves evolving into 'physical carriers' of services. This trend is highly evident in areas such as IP collectibles, offline retail and catering, and the pet economy. Additionally, as the Y and Z generations, who grew up during the rapid urbanization phase, gradually become the main consumer force, a 'spiritual over material' consumption philosophy is expected to usher in a golden decade for service consumption. Meanwhile, overlapping demands across generations are creating a highly stratified market with rapidly changing preferences, continuously driving innovation and segmentation within the service sector.
Supply Side: The synergistic evolution of industry, technology, and talent drives the upgrading of service consumption. First, industrialization forms the underlying support for large-scale service provision, enabling cross-regional, multi-scenario scaled expansion. Second, technological iterations such as the internet and mobile payment systems have restructured the service ecosystem. The current wave of AI sweeping through various industries, along with the rapid development of AI agents, is expected to further disrupt platform economies in the coming years, greatly enhancing the efficiency and experience of service consumption. Third, the improvement in the quality of consumer-facing workers due to education proliferation—such as university graduates working as nannies earning monthly salaries of 20,000 RMB—illustrates how the 'engineer dividend' brought by educational advancement is profoundly reshaping the human capital structure of the service sector. This shift is propelling service supply from being labor-intensive to knowledge- and skill-based, providing a solid talent foundation to meet higher-level consumption demands and catalyzing an 'engineer dividend' in consumer services.
Policy Front: Efforts on both the supply and demand sides make it a key lever for boosting domestic demand. Since 2025, central and local governments have issued a series of documents to promote the development of service consumption. This is not merely a short-term stimulus but reflects a systematic adjustment in resource allocation under the 15th Five-Year Plan’s concept of combining investment in physical assets with investment in human capital. On the demand side, the implementation of spring and autumn holidays for primary and secondary schools in provinces such as Jiangsu, Sichuan, and Zhejiang is expected to smooth out seasonal fluctuations in tourism and help release accumulated travel demand among families. On the supply side, the central government encourages local state-owned enterprises to utilize listed company platforms to consolidate high-quality cultural and tourism assets. Provinces such as Sichuan and Hubei have also proposed trillion-yuan-level cultural and tourism industry development goals, driving the iteration of cultural and tourism supply.
Based on the above analytical framework, the bank has reorganized various sub-sectors of consumption to further uncover new industry trends and investment opportunities from the perspective of service consumption.
Catering: The wave of chain expansion, with supply chain integration capabilities and service experience becoming the winning formula. 1) Chain Catering: The process of chain expansion in the catering industry continues. Against the backdrop of consumers seeking cost-effectiveness, catering businesses with strong supply chain integration capabilities are beginning to consolidate the market. Meanwhile, 'emotional value,' 'spatial experience,' and 'IP added value' have become new drivers for catering brands to navigate cycles and achieve premium pricing. Recommended companies include Guming, Haidilao, and Babi; also consider Mixue Ice City, Xiaocaiyuan, and Greentea. 2) Upstream Supply Chain: Upstream condiments and frozen foods exhibit manufacturing attributes. In the wave of service consumption, attention is given to C-end consumption upgrades and large B customization opportunities. Recommended companies include Anjoy, Haitian, and Ligao.
Retail: Offline supermarket renovations and chain store expansions create a 'good shopping, good browsing' experience. 1) Supermarkets: Transitioning from 'landlords' to 'consumer advocates,' supermarket chains represented by Yonghui are actively pushing for reforms. Supply chains are shifting from KA models to direct procurement models, optimizing product selection, developing private labels, and upgrading shopping experiences. Pay attention to the progress of Yonghui Supermarket's reform efforts. 2) Snack Retail: Transitioning from 'selling snacks' to 'selling experiences,' enriching SKUs, efficiently iterating product selections, continuously upgrading store formats, and meeting 'good browsing' demands through IP collaborations and event marketing. Follow the two strong players, Mingming Busy and Wanchen Group. 3) Ingredient Retail: Led by Guoquan, focusing on hot pot and barbecue ingredients, expanding categories and scenarios, and continuously iterating new stores. Recommended: Guoquan.
Cultural Tourism Attractions: Gradual upgrade from sightseeing to experiential economics. Domestic tourism rebounded strongly in 2023 after the pandemic and maintained steady growth in 2024/2025, driven by changes in macroeconomic growth expectations and the release of demand from younger demographics, senior citizens, and inbound tourists. In terms of specific consumption patterns, transitioning from sightseeing to leisure and experiential consumption has become a clear development direction. Facing these changes in demand, current policies are driving a new round of lean supply iterations for cultural tourism projects through measures such as capital markets and REITs. Recommendations include BTG Homeinns and Jinjiang Hotels; also consider Songcheng Performances, Three Gorges Tourism, Setre Cableways, Junting Hotels, Huazhu Group, Tongcheng Travel, and Ctrip.
Education: AI reshapes educational experiences, while the shift in service consumption drives vocational education transformation. The overall demand side of the education industry has entered a stable development phase. The advancement of AI technology is reshaping experiences and improving efficiencies within this vertical domain, becoming a focal point for investments by major educational companies. Meanwhile, the transformation of employment structures driven by shifts in service consumption is also reshaping the overall layout of vocational education companies, presenting new structural growth opportunities. Consider following Fenbi and China Oriental Education.
IP Trendy Toys: A paradigm shift from "toys" to "emotional assets," with vast growth potential overseas. The spillover demand and IP operation model of Pop Mart have gradually fed back into the industry, with benchmark companies achieving breakthroughs in various niche vertical fields, such as Brucke, a leader in building blocks, Chuangyuan Shares, known for its proprietary brands and blessing-themed cultural products, and TNTSpace, a rising star in vinyl plush toys. In addition to the flourishing domestic market, China’s trendy toy industry is also entering a new era of overseas expansion. Companies are increasingly focusing on cultural adaptation, signing local artists and deeply integrating core IPs with local cultural symbols to achieve cross-cultural emotional resonance. It is recommended to pay attention to Pop Mart, Chuangyuan Shares, and Brucke.
Pet Hospitals: From growth to value-added services, the evolution of demand and supply upgrades jointly drive the next phase of development in pet hospitals. The essence of the pet healthcare industry lies in the comprehensive lifecycle health management of pets, offering systematic health solutions. On the demand side, the aging of pets and the increasing tendency to treat pets as family members, along with more scientific pet care practices, have objectively driven the need for precision medicine. On the supply side, significant increases in initial capital expenditures (CAPEX) have empowered advancements in equipment and technology, while continuous innovation on the supply side addresses unmet needs. Going forward, specialization and chain operations remain key solutions. It is recommended to follow the IPO progress of Ray Pet Hospital.
Gaming: Focus on incremental opportunities in new markets, new users, and new channels. Overseas casual games present vast untapped potential, with domestic manufacturers beginning to make their mark, potentially replicating the success of overseas SLG markets. Attention should be paid to companies like Century Huatong and Sanqi Interactive, which have rich reserves in overseas casual gaming. The growing demands of younger users and female users are creating opportunities for new genres; focus on companies catering to these demographics, such as Giant Network, Kingsoft, XD Inc., and Baio Family Interactive. Growth in the domestic PC and console gaming markets has opened global opportunities through cross-platform gaming. Pay attention to Perfect World, which is developing high-quality cross-platform titles, and Shunwang Technology, a platform company benefiting from the expansion of PC gaming.
Health and Wellness: Service-driven transformation promoting the shift to “Insurance+.” Traditional insurance models are product-centric, especially for consumer-focused protection policies, where post-sales interactions occur only during claims, leading to issues such as poor customer experience and insufficient loyalty. With accelerating population aging and increased awareness of medical security, residents' demand for health and wellness services is significantly increasing, making traditional insurance inadequate to meet customer needs. This has given rise to “Insurance + Healthcare” and “Insurance + Elderly Care” models. Leading insurers are actively building “Insurance+” service ecosystems, leveraging their brand strength and comprehensive service capabilities to gain early advantages. It is recommended to watch Ping An, China Life Insurance, and China Pacific Insurance.
Physical Consumption: Transitioning from selling products to selling lifestyles, driving demand for service-led physical goods. 1) Home Appliances: Previously focused on selling single products, home appliance companies like Haier and Midea are now leveraging smart homes and integrated solutions across vehicles, homes, and lifestyle scenarios to generate service-oriented demands such as AI cooking assistance, smart housekeeping services, and intelligent security, enhancing user stickiness. Recommended: Midea Group. 2) Liquor: Maotai is elevating its offerings from sales to social experiences through new formats like cultural experience centers. Its online platform, iMaotai, is acquiring customers widely while developing cultural IP products such as zodiac-themed designs, Sanhua Feitian, and Huang Xiaoxi's dinner series to reconstruct value matrices. Other liquor companies like Langjiu, Zhenjiu, and Jiujiang are following suit, innovating service marketing models by combining liquor with gourmet food, cultural tourism, and wellness, expanding service boundaries. Recommended: Maotai, Zhenjiu.
Risk Warning: Recovery of macro consumer demand may fall short of expectations, and discrepancies between macro perspectives and micro-enterprise operations could arise.
