In 2025, total FMCG spending in urban China increased by a modest 0.9%, supported by 3.6% volume growth and offset by a 2.6% decline in average selling price (ASP). By Q1 2026, FMCG value declined 1.3% year on year even as volume continued to grow by 1.3%. However, data from April 2026 shows signs of FMCG value returning to positive growth – suggesting that early-year weakness may have been amplified by the holiday season.
The report finds that China is moving from a long period of rapid population growth and rising incomes into slower growth, with deflationary pressure and weaker confidence. Outlook for 2026 is likely to remain similar to 2025, growing at low single digits. At the same time, the demographic and household profile of consumers is changing in ways that will define where and how FMCG growth appears over the next decade.
Around 320 million people are now aged 60 or above, while singles account for roughly a quarter of households. Together, these structural shifts underpin the value-seeking behavior observed across the FMCG market and carry significant implications for innovation, pack and format strategy, pricing architecture and route-to-market choices.
“China’s FMCG market reflects broader changes taking place across the country’s consumption landscape,” said Derek Deng, head of Bain & Company’s Consumer Products and Retail practice in Greater China. “As China moves from a long period of rapid population growth and rising income into slower growth, demographic change, value-seeking behavior, and channel dynamics are becoming increasingly important drivers of how consumers shop and where growth comes from. The challenge for brands is understanding these changing consumer needs and how they are reshaping the market.”
Growth increasingly comes from lower-tier cities and older households
Tier 1 cities recorded low or slightly negative FMCG value growth in 2025, while Tier 4 and Tier 5 cities accounted for a disproportionate share of incremental FMCG value. These markets benefited from ongoing urbanization and the continued rollout of modern retail and digital channels, which expanded assortment and access.
Mid-life and older households in lower-tier cities increased their FMCG spending faster than younger households in top-tier markets. Families with children also played an outsized role in Tier 5 cities, reflecting higher consumption intensity and continued willingness to prioritize child-related everyday FMCG needs despite a value-seeking environment.
Across the four major FMCG sectors, packaged food remained the most resilient major category in Q1 2026 (+1.0%), supported by everyday household needs and selected propositions around convenience, health and small indulgence. Beverage continued to struggle (-2.9%) amid persistent price deflation and heightened channel competition, while personal care showed a mixed picture (-1.4%) and home care weakened most sharply (-3.0%). Pricing pressure showed signs of moderation in April 2026, with packaged food returning to positive ASP growth and declines narrowing in beverage and home care.
New channels and retailer power redefine how growth is captured
E-commerce continued to gain share and accounted for 38% of urban FMCG spending in 2025. Offline channels remained important but continued to rebalance, with hypermarkets losing share while newer formats expanded rapidly.
Online-to-offline (O2O) marked a clear turning point in 2025 after two volatile years. In Q3, total urban FMCG O2O value grew by almost 8% year on year, helped by faster delivery services, coordinated promotions across major platforms and the broadening of category participation beyond fresh produce into a wider range of FMCG categories.
Three offline formats continued to grow even as much of traditional offline retail remained under pressure. Membership clubs gained traction as shoppers sought quality at attractive value. Snack collection stores continued to scale rapidly, particularly in lower-tier cities, while discount stores gained relevance for high-frequency essentials and stock-up occasions.
Domestic players gained share in more categories than they lost, particularly in categories where local players have been able to combine local consumer insight, fast innovation cycles and value-for-money propositions.
Private labels (or own brands) are becoming an increasingly important strategic lever for retailers, helping them make value more visible and build differentiated propositions. In 2025, private labels reached roughly 2% of total FMCG sales in urban China, with private-label FMCG spending growing over 57% to RMB 32.7 billion in 2025 compared to 2024.
“O2O, membership clubs, snack collection stores and discount stores are reshaping how shoppers fulfill different missions,” said Bruno Lannes, senior partner at Bain & Company. “Brands can no longer take a one-size-fits-all approach to growth. They need to understand the different occasions consumers are shopping for, and ensure that products, pricing and channel strategies are tailored to those needs.”
“Households continue to look for ways to manage regular expenses, but value-seeking does not necessarily mean choosing the lowest price,” said Rachel Lee, General Manager of Worldpanel by Numerator China. “We see shoppers managing spending through product choice, store choice and channel choice, while still selectively trading up when they perceive clear benefits. Understanding these changing behaviors is becoming increasingly important for brands seeking sustainable growth.”
The report also finds that innovation remained highly active in China FMCG, with new SKUs consistently accounting for close to 40% of total SKUs from 2022 to 2025, yet among 2024 launches, only 3.9% achieved at least 1% penetration in the first year after launch.
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