January 28, 2025 – In a world of volatility and economic uncertainty, understanding consumers’ spending priorities becomes a key consideration of the food and beverage industry. Innova’s 360 research reveals important aspects of spending trends among consumers in China. It highlights income levels in China, consumer insights, their spending priorities, the rise of private labels, and what may develop in the future.
Economic and Health Trends
The rising cost of living is the top global megatrend driver, influencing consumer priorities across all income levels. Reflecting on spending trends, financial concerns weigh more heavily on lower-income groups, where stagnating wages and personal finances drive cautious spending.
Health remains a top priority, but income shapes how consumers approach it. Consumer spending trends reveal that higher-income consumers are more likely to take a proactive approach through healthy and nutritious foods to maintain well-being. In contrast, lower-income groups often rely more on reactive healthcare measures due to financial constraints. Price sensitivity plays an important role in health-related choices, making affordability a key factor in purchasing decisions.
Food and Beverage Spending Trends
In China, 2 in 5 consumers belong to mid-high or high-income groups, with many anticipating stable or improved family finances this year. However, consumer spending trends reveal that optimism varies by income level, with higher-income individuals feeling more optimistic than lower-income groups. Tier 1 city residents, Millennials and Boomers, and households with children generally display higher annual incomes than other demographics.
Eating healthily is the top eating-related value across all income levels, but value preferences differ. Spending trends show that mid-high-income consumers emphasize sustainability and transparency, while mid-low and low-income groups prioritize tradition and eating in moderation. These preferences shape purchasing behavior, influencing product choices and brand expectations.
Consumers in China have spent more on food and beverages than they did last year. Consumer spending trends reveal that income is a good indicator of how much people are spending on food and beverages. The spending on food and beverage increases as income level increases. Consumers with high incomes are nearly three times more likely to increase spending compared to lower-income groups (52% vs. 19%).
37% of consumers have increased spending because they have more disposable income. Increased socializing with food and alleviating boredom are the top reasons for increased food and beverage spending.
Quality Product Trends
Consumers across all income levels in China consider good value for money with high-quality and healthy products. While affordability remains a key factor, consumer spending trends indicate that being environmentally friendly and socially/ethically responsible are major priorities for high-income groups. Meanwhile, lower-income consumers focus on fitting quality that prevents waste and offers unique, hard-to-replicate benefits.
Brands cater to this demand with products that balance quality, nutrition, and affordability. Offerings like Peppito Black Truffle Rye Soda Crackers, Milkground High Calcium Cheese Sticks with Pineapple Flavor, and Rantongxue Latte Coffee demonstrate how good value encompasses both premium and health-conscious attributes. These products appeal to all income groups, reinforcing the idea that quality and nutrition matter to all.
Spending trends show that high-income consumers prioritize products that support eco-responsible and local businesses. Nestlé Quality Street Assorted Chocolates showcases efforts to reduce environmental impact, while Dilmah Blueberry and Vanilla Flavored Ceylon Black Teabags highlight biodiversity conservation and species protection, including a focus on the Asian elephant.
Private Label Trends
46% of Chinese consumers have noticed rising food and beverage prices over the past year, prompting them to adopt cost-saving strategies. Consumers are buying larger or family packs, choosing more affordable food and beverage options, and cooking from scratch to manage expenses.
Consumer spending trends indicate that value for money remains a top priority, especially for lower-income groups, who favor accessible store brands for their affordability and convenience. High-income consumers, however, appreciate store brands for their health benefits and superior nutrition. Despite this, named brands outperform store brands in all quality aspects, particularly in high-quality perception, superior nutritional/functionally healthy choices, and health benefits.
Store brands/supermarkets are gaining attention for their time-saving ability and avoiding waste, which appeals more to lower-income group consumers.
What’s Next in Consumer Spending Trends?
In China, good value for money means high-quality products and health and nutritional benefits for all income groups. Brands can win over consumers with high-quality products that enhance well-being, whether through nutrition, functionality, or mood-lifting properties, even in economic downtime.
Consumer spending trends reveal that being environmentally/planet friendly and socially/ethically responsible is of major importance for high-income groups. Brands can offer products that resonate with higher-income groups’ values of sustainability (kind to the environment), honesty, and transparency.
High-income consumers place strong emphasis on sustainability, transparency, and ethical sourcing. Brands that align with these values by offering environmentally friendly and socially responsible products can gain their trust. Meanwhile, lower-income consumers value convenience and waste reduction. Store and supermarket brands appeal to this group by providing cost-effective, time-saving solutions that minimize waste. Spending trends also suggest that brands combining quality, health benefits, and sustainability with affordability are likely to shape future consumer preferences in China.
This article is based on Innova’s Now & Next in Spending Priorities of Consumers in China report. This report is available to purchase or with an Innova Reports subscription. Reach out to find out more
