The Future of China’s Retail Market: Should Brands Stay or Leave?

There’s a certain irony to global headlines declaring the “end” of the China growth story. The same market that once represented boundless opportunity is now the subject of anxiety-laced boardroom conversations. Slowing GDP. Real estate drag. Youth unemployment. You’ve read the headlines.

But the brands on the ground? The ones actually navigating day-to-day consumer behavior in China? They’re not packing up—not yet.

They’re adapting.

Because while it’s no longer business-as-booming as it was in 2015, China remains one of the most influential consumer economies on the planet. The growth may be slower. The game may be harder. But the rewards? Still worth it—if you know how to play.

Let’s unpack whether China’s retail market is still worth your time, your budget, and your brand-building energy in 2025.

Slower Growth Doesn’t Mean No Growth

Yes, the Economy Is Cooling—but Spending Hasn’t Frozen

China’s GDP growth is moderating, and yes, consumer sentiment has taken a hit. But retail sales (from January to February 2025)  grew by 4.0% year-on-year.

Even sectors that took a dip—like beauty, fashion, and home decor—are stabilizing or rebounding with more selective, value-driven purchasing.

Consumption Is Becoming Smarter, Not Smaller

Chinese consumers are:

• Spending more time researching before they buy
• Focusing on durability, authenticity, and health
• Leaning into local brands—but still open to global ones with purpose

What we’re seeing is not a collapse—rather a correction.

Some Brands Are Leaving—But Many Are Doubling Down

The Retreat Isn’t as Widespread as It Seems

Yes, some global brands have exited or downsized in China. But the list is shorter than social media makes it seem. And often, it’s not the market—but internal strategy misfires that lead to the exit.

Image: Lululemon’s ‘Together We Grow’ campaign

Take Forever 21 or Old Navy—both struggled due to poor localization, not consumer rejection. Contrast that with Lululemon and Costco, which are scaling stores and seeing record engagement through localized marketing and premium positioning.

Image: Chinese social media users striking a pose in front of the Costco Storefront logo

The Winners? They’re Playing the Long Game

Brands still winning in China today:

• Prioritize brand building over deep discounts
• Invest in private traffic (WeChat, RED) to build loyalty
• Adapt SKUs, messaging, and pricing to local preferences

According to Bain, over 65% of surveyed brands plan to increase digital spend in China over the next 12 months.

Where the Opportunities Are Now

Lower-Tier Cities = Underrated Goldmines

Saturated in Tier 1? China’s Tier 3-5 cities still offer:

• Cheaper advertising
• Loyal followings
• Growing disposable income

Image: Anta Sports

Retailers like MINISO and Anta Sports are thriving in these areas by adjusting store formats and product lines.

New Luxury & Wellness = Rising Demand

Even amid caution, Chinese consumers are investing in:

• Niche fragrances and skincare
• Home wellness and smart appliances
• Boutique fashion with cultural storytelling

Final Thoughts – Stay, But Stay Smart

The question isn’t really “Should we leave China?” It’s “Are we willing to evolve fast enough to keep up?”

There’s still money on the table—just not for those stuck in 2018.

Brands that will win in China’s new retail era are those that:

• Ditch copy-paste global strategies
• Commit to long-term storytelling and brand trust
• Embrace local culture and community-based marketing

Digital Crew works with global brands every day to do exactly that.

👉 Let’s help your brand stay relevant, profitable, and proudly present in China. Contact Us