Wang Shun, a world swimming champion, has reached the pinnacle of his sport, yet he continues to push himself every day, striving to shave off mere tenths of a second from his times. He is also a "big kid" who loves superheroes and can build Lego at "world-champion" speeds—once completing a 4,210-piece model of Batman: The Animated Series Gotham City in just six hours.

Lu Ye is a journalism professor at the Shanghai-based Fudan University. In front of her classes, she commands respect as an articulate and engaging teacher, but off the podium, her imagination knows no bounds. She dreams of cranking her Lego Retro Radio up to maximum volume and dancing to its beat, and even envisions giving her Lego Mona Lisa a guitar so she can rock out also. After all, even university professors have their rock and roll aspirations.

Wang and Lu are the two protagonists featured in the creative video for Danish toy brand Lego's adult line, demonstrating how building with Lego bricks allows them to reconnect with their "inner child" or reignite their passion for beloved hobbies. This embodies the Lego brand's adult line philosophy of encouraging adults to "pin" their lives with enthusiasm. In Chinese, the word pin conveys both the spirit of striving and the act of assembling Lego products, elegantly blending the two ideas.

"There is a constant struggle between ideals and reality in the lives of contemporary adults," Stella Shen, Marketing Vice President of Lego China, told Beijing Review. "They often seek a balance between the two, navigating their busy schedules while reaching for hobbies and dreams."

In a bid to rekindle adults' connection to their inner passions, the Lego brand is ramping up its adult line in China. Beginning in September, the company has revamped all of its authorized stores across the country, and for the first time in its Chinese stores, it has put in place window displays targeting adult consumers.

"As a multinational corporation with years of experience in the Chinese market, the Lego brand has gained a deep insight into both the toy market and the mindset of local adult consumers," Shen said. "In the future, we want to inspire more people to reconnect with their passions and share the joy of play."

The recent annual report on consumer rights protection from the China Consumer Association highlighted that in 2024, emotional release will become a key factor influencing the decision-making of younger consumers, potentially creating new consumption hotspots in the future.

Nan Yu, an associate researcher at the Institute of Economics of the Chinese Academy of Social Sciences, pointed out that as household incomes and spending power rise, the demand for emotional fulfillment is becoming more apparent. Consumers are increasingly looking for the emotional value in products and services, reflecting their desire for a higher quality of life.

The Lego brand has picked up on this new consumer trend. Similarly, many other foreign companies have recognized the emerging consumption trends and potential in China, stepping up their presence in the market.

New consumer landscape

This year, Canadian activewear brand Lululemon has taken over Swedish clothing retailer H&M's spot, joining sportswear brands Anta, Adidas and Descente as neighbors in Beijing's fashion hub of Sanlitun, where it has opened its largest store in north China. Additionally, Swedish outdoor brand Klattermusen has launched its first Family Store in China, and American outdoor equipment brand Nemo is also setting its sights on the Chinese market.

Data from online retailer JD.com show that during the mid-year 618 shopping festival in June, over 70 categories of sports and outdoor products on the platform, including hiking shoes and waterproof jackets, saw year-on-year growth of over 100 percent. On online shopping platform Tmall.com, 29 outdoor sports brands achieved sales of over 100 million yuan ($14 million), with brands like Lululemon and Kolon Sport from the Republic of Korea experiencing sales growth of more than 100 percent year on year.

In recent years, the outdoor trend has gained momentum across China, allowing foreign brands to rake in huge profits as they increase their investments in the Chinese market. According to a recent report released by the General Administration of Sport of China on its outdoor sports industry development plan, the market size for sports and outdoor goods is expected to approach 600 billion yuan ($84 billion) by 2025.

Wang Yuxiong, Director of the Sports Economics Research Center at Central University of Finance and Economics, noted that based on the development of outdoor sports in other countries, China's outdoor economy has considerable growth potential. The continuous integration with cultural and tourism elements will provide ongoing momentum for the development of the sector, he told China Securities Journal.

As China's economy continues to grow, the new middle-income earners are increasingly emerging as a key driver of consumption upgrades and cultural advancement. They are demanding higher quality and greater product variety. This shift has made foreign membership supermarkets like Sam's Club increasingly popular, often resulting in bustling stores. Sam's Club has opened 49 locations in China so far, and its future expansion plans suggest an apparent increase in the pace of new store openings.

Simultaneously, value for money has become a crucial consumer keyword. This is why companies like the German supermarket brand ALDI have started to adjust their development strategies in China. Initially aiming for a high-end approach, this discount supermarket has returned to a focus on value after analyzing the market. After all, who doesn't want quality products at a reasonable price?

Lower-tier markets are also increasingly capturing the attention of many foreign brands. American coffee giant Starbucks, French skincare brand L'Occitane, and German logistics company DHL are all rapidly expanding their presence in China's smaller cities.

A market on the rise

Data from the Ministry of Commerce show that Chinese consumption market continues to expand and improve, contributing 82.5 percent to economic growth last year.

Currently, there are more than 400 million middle-income earners in China. The number is expected to rise to 800 million by 2035, according to the Outline of the 14th Five-Year Plan (2021-25) for Economic and Social Development and Long-Range Objectives Through the Year 2035. For every 1-percentage-point increase in the middle-income share, consumer spending is estimated to grow by over $150 billion annually.

Compared with the 80-percent level seen in developed countries, China's urbanization rate of approximately 66 percent shows room for growth. It's estimated that a 1-percentage-point increase in urbanization could generate around $140 billion in new investments and $28 billion in additional consumer spending.

During this year's Wangfujing Forum, held in Beijing in October, representatives from multinational companies highlighted the enormous potential of China's consumer market and its ongoing efforts to enhance openness, which they said create favorable opportunities for foreign businesses. They stressed the need to stay attuned to emerging trends in the Chinese market and to adjust their strategies accordingly, in order to reap the benefits of this evolving landscape.

Zheng Mingju, the partner in charge of retail and consumer products for professional services firm EY Greater China, said at the forum that the emerging trends and changes in the Chinese market—such as the popularity of green consumption, the success of domestic brands, and the rapid growth of service consumption—have a largely positive impact on multinational companies. He emphasized that these changes represent great opportunities.

The rise of domestic brands reflects consumers' growing support for and recognition of local offerings. This trend has intensified competition for multinational companies entering the Chinese market, pushing them to prioritize localization and cultural integration, Zheng said.

These companies must rethink their brand positioning and product designs, infusing them with Chinese elements and cultural significance to resonate with consumers. Moreover, multinationals can enhance partnerships with local brands to foster mutually beneficial outcomes, he added. BR

(Print Edition: Doubling Down)

Copyedited by G.P. Wilson

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