SerpApi.Org
Against the backdrop of flat retail sales growth in the first half of 2026, China has set a clear consumption target under its 15th Five-Year Plan, which aims to lift total retail sales of consumer goods to around 60 trillion renminbi, or around $8.8 trillion, by 2030, which translates to an annual growth rate of 3.7 percent in retail sales from 2026 onward.
Approved by the State Council last week, the plan marks the first time Beijing has introduced a national-level, five-year blueprint specifically dedicated to expanding consumption, underscoring its growing importance as a long-term economic priority.
However, the world's second-largest economy remains in the midst of a structural reset. A prolonged real estate downturn, employment pressures and uncertainty surrounding rapid advances in artificial intelligence have contributed to a more cautious consumer mindset, with households prioritizing savings over spending.
According to official data released last week, despite strong export growth - China's exports jumped 27 percent in June to $412.4 billion, the fastest growth since October 2021 - domestic retail sales registered a lackluster increase of 1.4 percent year-over-year from January to May.
To reach Beijing‘s goals, the definition of consumption has evolved to include the service industry, in addition to sectors including consumer goods and catering.
"Future consumption growth will be driven primarily by the expansion of services," said Dan Wang, director on Eurasia Group's China team. Based on the five-year plan, high-quality service should benefit sectors such as elderly care, child care, culture and tourism, health, and sports.
"In the traditional retail sector, where the focus has largely been on the physical products per se, polarization will inevitably become more pronounced, as the value-added proposition continues to rise in importance.
"China now has been promoting an idea of ‘servitization of manufacturing,' which essentially means that industrial products - including consumer goods - will increasingly incorporate service-based features, for example - a musical massage bed," Wang added.
As artificial intelligence opens up new possibilities across home goods and beyond, this year's World Artificial Intelligence Conference in Shanghai offered a preview of that AI-driven lifestyle - from gadgets including humanoid robots and agentic phones to AI companion plushies. Such consumer-facing innovations could gain further traction among consumers as government-led initiatives accelerate adoption.
For James McDonald, senior director of research at Savills, a global real estate services provider, that mandate has already trickled down to shopping malls and department stores, where more traditional service offerings - such as fitness centers, wellness providers, children's education studios and entertainment-focused businesses - have become increasingly prominent.
"The shift toward services should help malls differentiate themselves from online retail, as many services require face-to-face interaction and cannot easily be replicated through e-commerce," said McDonald.
"These tenants also encourage repeat visits and help generate footfall throughout the day rather than concentrating activity around lunch and dinner periods," McDonald added.
For luxury, a more discretionary category, that means a period of consolidation will continue, according to McDonald, with brands scaling back in once-promising second-tier cities while continuing to compete for prime retail locations in first-tier markets.
Later this year Louis Vuitton will open a high-impact flagship at K11 Musea over looking Hong Kong's Victoria Harbour; Hermès‘ only Maison store in the market, launched in 2014 along Shanghai's Huaihai Road retail artery, is prepping for a major upgrade, and a stone's throw away, Dior is slated to open a new flagship alongside Louis Vuitton's The Louis, the brand's much lauded visionary experiential retail project.
Further down the pipeline, the dual openings of SKP and MixC in Guangzhou are expected to create a new luxury retail cluster in a city still widely recognized for its manufacturing heritage.
As China's shopping mall landscape undergoes a structural upgrade, the question becomes how brands can redefine their brick-and-mortar agenda.
"Consumers remain willing to spend, but they are more discerning and expect more than simply access to products. Brands therefore have to work harder to earn each purchase by delivering memorable experiences and strengthening emotional connections with customers, while also responding to growing competition from digital channels," explained McDonald.
Savills has identified "small and micro luxuries," represented by gold accessories, fragrances and limited-edition designer toys, as a rising force in physical retail, as consumers seek affordable indulgences amid heightened macroeconomic uncertainty.
As small goods become big business, Savills has observed that retail space dedicated to the segments grew by an average of 18 percent in 2025, becoming "a key pillar of consumption resilience," according to the firm's report, titled "2026 Retail Trends."
The often overlooked trend was also highlighted in a piece published by the National Bureau of Statistics, which noted that "retail sales of trendy toys, including blind boxes and collectibles, continue to maintain rapid growth."
Shanghai's Joy City shopping mall offers a glimpse into the commercial viability of this retail vibe shift. Often dubbed the "Akihabara of China," the mall has hosted an astounding 42 anime-themed pop-ups in July alone, tapping into the country's Gen Z subculture. During the February Chinese New Year, anime-themed pop-ups generated between 4 million renminbi, or over $590,000, and 10 million renminbi, or $1.4 million, in sales per event, according to local media reports.
The ripple effect is extending into beauty, as local brands and retailers - including Judydoll, Into You, Wow Colour, The Colorist and Beauty Choice - compete for consumer attention across the mall's busiest retail floors, which are especially crowded with wig-donning cosplayers on weekends.
Now entering the mainstream, China's manga, anime and games community is expected to surpass 300 billion renminbi, or $44.2 billion, in scale by 2027.
