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China's FMCG market is beginning to recover, but shoppers are continuing to make careful spending decisions as they look for better value in their everyday purchases. According to our latest FMCG Market Review, consumer demand remained subdued during the first half of 2026, although market performance improved in the second quarter as household spending gradually recovered.
Overall FMCG sales were broadly stable during the first six months of the year, declining by just 0.3% compared with the same period in 2025. After a weaker start to the year, sales returned to modest growth in the second quarter, increasing by 0.8%, pointing to early signs of a recovery in demand.
While shoppers remain price-conscious, they are also becoming more selective about where they shop. Smaller supermarkets, discount retailers and instant retail services continued to attract more consumers, while modern trade channels, including hypermarkets, supermarkets and convenience stores, continued to face a changing and increasingly competitive retail environment. Retailers offering strong value, convenience and differentiated shopping experiences were the ones that performed best.
One of the biggest growth stories was private label. Retailers' own brands grew by more than 60% during the first half of the year, driven by both more households buying private-label products and existing shoppers purchasing them more frequently. More than half of urban households now regularly buy private-label products, showing that these ranges have become part of everyday shopping rather than an occasional alternative.
Online retail continued to grow, with FMCG sales increasing by 9% compared with the same period last year. At the same time, instant retail services continued to expand as shoppers increasingly looked for faster and more convenient ways to buy everyday products. These services now reach almost one in four urban households across China.
Artificial intelligence is also beginning to reshape the shopping journey. During this year's mid-year shopping festival, AI tools played a much bigger role in helping consumers compare prices, receive product recommendations and complete purchases. Retailers also used AI to improve marketing, customer service and operational efficiency. By April 2026, AI applications had reached almost 900 million users in China, highlighting how quickly the technology is becoming part of everyday shopping.
Chinese consumers are becoming more deliberate in the way they shop. Value remains incredibly important, but shoppers are also looking for convenience, quality and better shopping experiences. Retailers that combine strong value with innovation, whether through private-label products, digital services or AI, will be best placed to succeed as consumer demand gradually recovers.
The findings are based on Worldpanel by Numerator's FMCG Market Review for the first half of 2026, which tracks purchasing behaviour across urban households in China, including shopping trends, retail channels and category performance.
Rachel Lee
Managing Director at Worldpanel by Numerator China.
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