SHANGHAI-December 9, 2025-After a slow 2024, China's fast-moving consumer goods (FMCG) market is showing signs of stabilization. According to the 14thChina Shopper Report 2025 Vol. 2, jointly released by Bain & Company and Worldpanel, total FMCG spending grew 1.3% year-to-date (YTD Q3 2025), supported by 3.8% volume growth and a 2.4% decline in average selling price (ASP).

Following a strong first quarter spending growth of 2.7% year-on-year, growth moderated to 0.7% in Q2 and 0.4% in Q3. Volume remained the primary driver of growth while deflation eased from a 3.4% drop in FY 2023-24 to a 2.4% drop in YTD Q3 2025.

"The moderation of price deflation and steady volume growth indicate that China's FMCG market is moving towards a new normal where consumers are pursuing value rather than pure price," said Rachel Lee, General Manager of Worldpanel China. "We are seeing greater balance between affordability and quality across categories. Brands that understand these expectations and calibrate their pricing and promotion strategies accordingly will be best positioned to sustain growth."

Lower-tier cities emerge as China's next growth frontier

Tier 3-5 cities accounted for around 80% of total FMCG market expansion in 2025, with volumes rising 4-6% and offsetting 2-3% price declines. Growth in these cities was driven by continued urbanization, resilient local consumption and deeper penetration by retailers and FMCG brands.

Consumers in lower-tier markets benefited from lower living costs and expanding access to modern trade. Online-to-offline (O2O) channels also boosted purchase frequency and category breadth. Additionally, small-format retail such as snack stores, community supermarkets and flash-delivery O2O platforms have become a key growth engine, enabling brands to reach new consumers more efficiently.

Brands that actively expand into lower-tier markets, particularly through tailored pack-price offerings and agile retail partnerships, are capturing share gains. These regions have become the new growth engine for China's FMCG recovery, contrasting with flat performance seen in Tier 1-2 cities.

Evolving consumer priorities reshape what China buys

Across the four major FMCG sectors, packaged food led sales value growth in the first three quarters of 2025 at 3.4%, supported by stable demand in core staples and snacking categories. Home care followed at 3.3%, underpinned by steady household hygiene habits and affordable innovations. Personal care recorded a 1.1% growth, while beverages declined by 1.1% amid intensified price competition and substitution by freshly made drinks.

The report includes a breakdown of category dynamics, which demonstrates how consumers are balancing affordability and small indulgences. Instant noodles (+5.9%) and nutrition supplements (+5.3%) have gained traction through new channels such as snack stores and O2O delivery, while juice (+19.2%) led the beverage category as shoppers traded up to healthier, functional options. By contrast, milk (-6.4%) and yogurt (-5.8%) suffered from oversupply and discounting, underscoring the ongoing polarization between value and premium segments.

Membership, snack-collection and discount store formats surge up to 92% as shoppers seek value

Beyond category trends, the way Chinese consumers shop and engage with brands is changing rapidly. Emerging channels are now at the forefront of growth as shoppers diversify where and how they buy.

Among offline channels, membership-based retailers, snack-collection chains and discount formats have expanded rapidly - growing 40%, 51% and 92% year-on-year respectively - reflecting consumers' heightened focus on value, convenience and experience. Meanwhile, O2O spending rebounded 7.9% year-on-year in Q3 after last year's decline, supported by faster delivery, broader product coverage and cross-platform promotions.

For online channels, social and value-driven platforms continued to gain share. Short-video and low-price commerce models now account for more than 40% of total FMCG e-commerce sales. These channels are redefining the consumer journey by merging inspiration, transaction and fulfillment in real time.

"Channels have become active demand generators rather than passive sales endpoints," said Derek Deng, head of Bain & Company's Consumer Products practice in Greater China. "Brands need to rethink how they partner with retailers and platforms - treating each channel as an ecosystem for innovation, engagement and value creation. Those who can effectively integrate channel insights into portfolio and go-to-market design will set the pace for China's next phase of FMCG growth."

Private labels climb 44% in two years as retailers evolve into brand creators

As formats evolve, many retailers are extending beyond distribution to play a more direct role in shaping demand. Private-label products accounted for 2% of FMCG sales in YTD Q3 2025, representing 44% growth over the past two years. Retailers are rapidly expanding their private-label portfolios, using first-hand shopper insights and integrated supply chains to deliver high-value alternatives.

These retailer-owned labels are capturing incremental consumer demand while intensifying competition for branded manufacturers. As this trend accelerates, retailers are evolving from traditional distribution roles into differentiated brand owners - redefining competition and expanding consumer choice.

To navigate the rapidly evolving FMCG market, Bain introduces its new C.O.R.E. framework - Circumstances, Offerings, Routes, Execution - as a playbook for brands to achieve sustainable, demand-led growth. The framework urges companies to understand the circumstances including occasions that trigger demand, design offerings that meet functional, emotional and social needs, select the right routes to reach consumers through both demand-generation and sales-conversion channels, and tailor execution - from pack sizes to pricing - to fit each purchase occasion.

"China's shoppers are becoming more deliberate in how they balance value, convenience and experience," said Bruno Lannes, senior partner at Bain & Company's Consumer Products and Retail practices. "As consumption occasions diversify and channels proliferate, the brands that succeed will be those that truly understand why, when and where consumers choose to buy - and tailor their strategies accordingly."

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Media contacts:

Dan Pinkney (Boston) - [email protected]

Gary Duncan (London) - [email protected]

Ann Lee (Singapore) - [email protected]

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About Worldpanel

Worldpanel provides brands and retailers with a unique, 360-degree understanding of consumer behaviour across the globe. We are shopper-centric, continuously monitoring purchase and usage behavior through the largest omnichannel panel in the world to shape the brands of tomorrow by better understanding people everywhere. With unparalleled datasets, pioneering technology and expert analysts, we partner with brands and retailers of all sizes, empowering them to reimagine what's possible, and change the landscape to create a better, healthier, more sustainable and inclusive world. In the China market, Worldpanel is one of the services in CTR, covering over 100 FMCG categories, 50,000+ brands, and 100+ retailers, among many others.