Summary of Key Points
Recently, the State Council issued China's first national five-year plan for expanding consumption, titled "The 14th Five-Year Plan for Expanding Consumption." The plan aims to increase the total retail sales of consumer goods by 60 trillion yuan by 2030 (an additional 10 trillion yuan compared to the 50 trillion yuan in 2025), but this is merely a baseline figure. The core of the plan is not simply to "stimulate buying" but to drive a profound transformation in the consumption structure: shifting from a focus on goods consumption to an equal emphasis on both goods and services; moving from meeting basic, standardized needs to addressing more personalized and quality-oriented demands; and evolving from satisfying existing needs to creating new ones. Demographic trends (aging, low birth rates, and increasing loneliness) and AI technology are key drivers of this transformation, with the ultimate goal of making consumption a central engine for a better life and economic growth.
Detailed Analysis
1. Is 60 trillion yuan just the " appetizer"? Don't be misled by retail sales figures; service consumption is the real big deal
Many people think that consumption means buying goods (which retail sales data mainly reflect, such as clothing, household appliances, and food). However, people are increasingly willing to spend on experiences—traveling, attending concerts, receiving massages, working out, and pet care. For example, in May 2026, retail sales of goods decreased by 0.6% year-on-year, while service sales increased by 5.4%, with the culture and leisure sector growing even more rapidly. This indicates that service consumption is compensating for the decline in goods sales. Why is service consumption more promising? Because goods can be used for several years (e.g., a refrigerator lasts for 10 years), whereas services can be consumed repeatedly (you can travel again next year or get another massage tomorrow). Therefore, the 60 trillion yuan in retail sales of goods is just the starting point; adding service consumption will significantly expand the overall consumer market.
2. From "buying whatever is available" to "choosing carefully": Consumption now emphasizes personalization and sentiment
In the past, people bought refrigerators and TVs because they were unavailable, and companies that could produce them at scale and low cost (e.g., selling air conditioners more cheaply) would succeed. But now, almost every household owns these basic items, and the replacement cycle for smartphones has lengthened from one year to two or three years. To attract consumers, products need to offer something new and meaningful. Take the pet industry as an example; few people expected to spend so much on pets before (food, grooming, medical care, even funerals). Now, this market is worth billions of yuan. Other emerging trends include Citywalks, camping, and frisbee activities, which have become new consumption hotspots. Brands like Pop Mart sell not just toys but also IP-related products that provide emotional value. The future trend is for services to cater to specific consumer needs—hundreds of niche markets each serving millions of people. Those who can meet these personalized and quality-driven demands will succeed.
3. Service consumption takes center stage: Elderly care, childcare, tourism, and sports are the key areas
The plan highlights service sectors such as elderly care, childcare, health, sports, culture, and tourism. Why? Because there is a limit to how many refrigerators one can buy, but there is no limit to the variety of services people need:
- Aging population: The elderly require care and age-friendly modifications (e.g., handrails, smart alarms).
- Low birth rates: Parents are willing to spend more on high-quality childcare and extracurricular activities for their children.
- Tourism: People prefer more immersive and experiential travel (staying in rural homestays rather than following fixed itineraries).
The United States is the world's leading consumer market, not because it sells a large volume of goods but because its service industry is highly developed (e.g., various entertainment activities during the World Cup). There is still much room for growth in China's service sector, which will be a major driver of future consumption.
4. Demographics and AI are reshaping consumption: Those who understand people will reap the benefits
The changes in consumption are driven by two factors: demographics and technology:
- Demographics: Aging populations lead to growing demand for elderly care and age-friendly products; fewer children mean higher investment in quality education and healthcare; more single individuals lead to the popularity of small appliances, pets, and home services (such as delivery and cleaning).
- AI technology: Customized running shoes used to be expensive, but AI design and flexible manufacturing have made them more affordable. AI can also generate personalized health plans and smart assistants (e.g., custom rehabilitation programs for the elderly).
The competitive landscape for businesses is changing: No longer about who produces quickly or cheaply, but about who understands consumer needs better—knowing what the elderly need and what young people value.
5. The plan is not just a stimulus package; it's a roadmap for future consumption
This plan is not about distributing cash coupons or lowering prices. Instead, it outlines the direction of China's consumption: shifting from buying goods to buying experiences, from standardization to personalization, from meeting basic needs to creating new ones, and from seeking cheapness to pursuing quality. Over the past few decades, China has moved from a state of material scarcity to abundance through its manufacturing industry. In the future, growth will come from upgrading consumption to improve people's lives. Those who can participate in this transformation will benefit.
In one sentence
Future consumption will not be about who sells the most but about who understands people best and offers the most personalized and meaningful experiences. The 60 trillion yuan is just the beginning; the real growth lies in services, personalization, and our aspirations for a better life.