What: Savills reports that Chinese customers are morphing into hedonists.

Why it is important: Are Chinese retailers ready? And what about international department stores eagerly waiting for Chinese customers to return?

The retail sector in China experienced a robust recovery in 2023, with strong rebounds in tourism, film attendance, and the performing arts. According to a report by Savills, Chinese consumers are now focusing more on escapism, entertainment, and relaxation amid complex economic conditions.

Box office figures reached 86% of pre-pandemic levels, indicating strong consumer demand for entertainment activities. Major cities are allocating around 16% of shopping mall space to entertainment zones, reflecting the growing trend towards dedicating more retail space to leisure.

The report also highlighted the emergence of new brands and concepts within traditional retail categories, particularly in sectors like sports and child-related spaces. Family entertainment, theaters, art instruction, and specialized sports have become key drivers of leasing demand.

Retail sales demonstrated significant rebounds across various consumer categories, with sectors like F&B and apparel showing robust growth exceeding 15%. Niche product categories, such as fishing, skiing, perfumes, and instant cameras, saw import values more than double compared to 2019.

Despite economic slowdown fears, Chinese consumers are becoming more discerning, focusing on value for money, quality, taste, and product substance over packaging. There is also a rise in founder-led brands leveraging social media and unique experiences to build consumer loyalty.

The report highlights a surge of entrepreneurship in the retail sector, fueled by domestic startups, as well as a growing interest among retailers in diversifying into non-traditional locations, such as city center backstreets and side roads.

Furthermore, sustainability is gaining traction, with luxury brands leading efforts to reduce energy consumption and obtain LEED certification for retail spaces.

Chinese consumers prioritise entertainement and relaxation in retail