Positive Comments: The Counterattack of Consumption in the Central and Western Regions Reflects the Structural Vitality and Innovation Drive of China’s Domestic Demand Market
In the reshuffle of the top ten consumption cities in the first three quarters of 2025, the most prominent feature is that cities in the central and western regions (such as Chengdu, Chongqing, Wuhan, and Hangzhou) have overtaken traditional consumption powerhouses in the eastern region. This phenomenon is not accidental but an inevitable result of the in – depth adjustment of China’s domestic demand market, the upgrading of the consumption structure, and the coordinated development of regional economies. The innovative practices and policy effectiveness behind it have injected new growth logic into China’s consumption market.
First of all, the precise implementation of policies and inclusive consumption stimulus have activated the demographic and urbanization dividends of cities in the central and western regions. The consumption counterattacks of cities like Chongqing, Chengdu, and Wuhan are closely related to the “precise drip – irrigation” of policies such as consumption vouchers and trade – in programs. For example, in the first three quarters of the year, the retail sales of communication equipment, gold and silver jewelry, and new energy vehicles in Chengdu increased by 74.6%, 46.2%, and 38.6% respectively, directly benefiting from the continuous effectiveness of the trade – in policy. Wuhan’s trade – in program for consumer goods drove the growth of household appliances and building materials by more than 20%. Hangzhou linked up with the national market through the “Zhejiang High – quality Cloud Products” e – commerce consumption vouchers. The core of such policies lies in “inclusiveness” – covering the rigid needs of low – and middle – income groups (such as household appliances and communication equipment) and boosting optional consumption (such as gold and silver jewelry and new energy vehicles), which precisely matches the large population base of central and western cities (Chongqing has a permanent population of over 30 million, and Chengdu has over 21 million) and the consumption potential released during the urbanization process (Chengdu’s urbanization rate reached 79.5% in 2024 and still has room for improvement). Compared with developed eastern cities, the “policy – population – demand” triangle in the central and western regions is more likely to form a resonance, becoming a “strong engine” for consumption growth.
Secondly, the innovation of new consumption scenarios and the ecological development of the first – store economy have reshaped the consumption attractiveness of central and western cities. Chengdu’s “first – store economy” has been upgraded from simple “first – store establishment” to a full – industrial – chain ecosystem of “first launch – first store – headquarters”. In 2025, the total number of first stores exceeded 4,000, ranking third in the country. Behind this is the coordination of the dual – core business districts of Chunxi Road and Jiaozi Park and “non – standard commercial” projects such as Luhu CPI and Dongjiao Memory. Through “small and beautiful” scenario innovation (such as urban sports commercial parks and e – sports themed commercial complexes), traditional commercial spaces have been transformed into experience fields for “check – in consumption”. Hangzhou’s live – streaming e – commerce, relying on the advantages of digital payment and platform economy, has formed a closed – loop of “anchors – enterprises – consumers”. As of February 2025, Hangzhou had 32 leading live – streaming platforms, nearly 50,000 anchors, and more than 5,000 live – streaming – related enterprises, ranking first in the country in terms of quantity. This model of “offline consumption supported by online traffic” provides a continuous technological foundation for consumption growth. Wuhan’s cultural and tourism IPs (such as the “Garlic Bird” cultural and creative products) and sports event economy (Wuhan Open) have achieved in – depth integration of culture and tourism with consumption through “cultural empowerment of consumption”, converting the length of tourists’ stay into secondary consumption in catering, accommodation, and commercial districts. These innovative practices show that central and western cities are transforming from “consumption followers” to “consumption leaders”, building differentiated consumption competitiveness through the iteration of scenarios, models, and ecosystems.
Finally, the “dual – wheel drive” of consumption upgrading and regional coordination promotes the development of China’s domestic demand market in a more balanced direction. For a long time, eastern coastal cities have occupied the leading position in consumption due to their economic先发 advantages. However, with the increase in the urbanization rate and residents’ income in the central and western regions (in 2024, the per – capita disposable income of urban residents in Chengdu increased by 6.8%, higher than the national average), and the enhanced status of domestic demand under the “dual – circulation” strategy, the pattern of “strong east, weak west” in the consumption market is being broken. The overtaking of cities like Chengdu and Chongqing not only represents the rise of single cities but also reflects the transformation of China’s consumption market from “single – point breakthrough” to “multi – pole linkage”. This transformation not only alleviates the short – term growth pressure on eastern cities caused by the transformation of service consumption (for example, the contribution rate of service consumption in Shanghai is nearly 60%, and the traditional total retail sales of consumer goods indicator has a lower explanatory power for its consumption vitality) but also injects broader growth momentum into the national consumption market.
Negative Comments: Hidden Worries and Transformation Challenges Behind the Consumption Counterattack
Although the consumption growth in central and western cities is exciting, a deeper analysis reveals that this round of “counterattack” still has potential problems such as questionable sustainability, intensified regional development imbalance, and insufficient coordination between service consumption and physical consumption. We need to be vigilant that the “short – term boom” may cover up the “long – term pain”.
Firstly, the risks of policy dependence and consumption overdraft cannot be ignored. Currently, the consumption growth in central and western cities highly depends on short – term stimulus policies such as consumption vouchers and trade – in programs. For example, in the consumption growth rates of Chengdu, Wuhan, and Hangzhou, the proportion driven by policies may exceed 30% (referring to the analysis of “national subsidies” for consumer goods in a research report by Huatai Securities). Although such policies can quickly activate the market, in the long run, they may lead to “weak growth after policy withdrawal”. More importantly, some consumption demands (such as household appliances and cars) are “one – time” in nature. The trade – in policy may advance and overdraw future demands, resulting in insufficient subsequent growth momentum. In addition, the “crowding – out effect” of consumption vouchers also needs attention. Huatai Securities pointed out that while the growth rate of “national – subsidy” related consumer goods rebounds, it may squeeze the growth space of other optional consumption (such as service consumption). If policies are overly inclined towards physical consumption, it may hinder the cultivation of service consumption, which is the core future increment.
Secondly, although the “Matthew effect” in regional consumption may change, structural contradictions still exist. The overtaking of central and western cities is more concentrated in the indicator of “total retail sales of consumer goods”, while the consumption transformation in eastern cities (such as Shanghai and Suzhou) has entered the stage of “service – consumption – dominated”. In 2023, the contribution rate of service consumption in Shanghai was nearly 60%, and southern Jiangsu cities such as Suzhou and Nanjing are also transforming towards service consumption. This means that the current reshuffle of the top ten consumption cities is more of a result of regional competition in the “physical – consumption – dominated stage” rather than a comprehensive surpassing of comprehensive consumption strength. If central and western cities fail to keep up with the innovation of service consumption (such as cultural and entertainment, tourism and vacation, and emotional healing), they may face a “growth ceiling” in the future. When physical consumption approaches saturation (such as the ownership of cars and household appliances approaching the level of the eastern region) and the supply of service consumption is insufficient, the growth rate may drop significantly.
Thirdly, the “homogenization” and “traffic dependence” of new consumption scenarios may weaken long – term competitiveness. Although the innovative practices in central and western cities (such as the first – store economy, non – standard commerce, and live – streaming e – commerce) are remarkable, some projects tend to be “innovative for the sake of innovation”. For example, among the “small and beautiful” commercial projects in Chengdu, some lack a clear customer – group positioning and differentiated content and may become short – term “check – in places” rather than long – term “consumption destinations”. Although Hangzhou’s live – streaming e – commerce leads in scale, the concentration of top anchors is too high (for example, the top 10% of anchors contribute more than 70% of the traffic). Once the top anchors leave or policy supervision becomes stricter (such as the standardization of live – streaming taxes), it may lead to a sharp fluctuation in traffic and consumption. Although Wuhan’s cultural and tourism IP (such as the “Garlic Bird”) has become popular, it has not yet formed a cultural consumption industrial chain like Chengdu’s “Panda” and Hangzhou’s “Song Dynasty Charm”, and the commercial conversion ability of the IP is limited. This tendency of “emphasizing traffic over operation” and “emphasizing scenarios over content” may shorten the life cycle of new consumption scenarios and make it difficult to continuously attract consumers.
Suggestions for Entrepreneurs: Seize the Window Period of Consumption Transformation and Build the Coordination Ability of “Demand – Scenario – Ecosystem”
Facing the reshuffle of the top ten consumption cities and the in – depth adjustment of the consumption market, entrepreneurs need to look beyond the surface of “regional competition” and seize the core logic of “domestic demand upgrading” and “regional coordination”. They should build competitiveness from the following three aspects:
Precisely connect with policy dividends and layout the “inclusive + upgrading” dual tracks. Policies such as consumption vouchers and trade – in programs are still important tools for stimulating consumption in the short term. However, entrepreneurs need to pay attention to the “structural orientation” of policies – not only focusing on the rigid needs of low – and middle – income groups (such as the trade – in of household appliances and communication equipment) but also targeting the upgrading needs of the new middle class (such as the quality consumption of new energy vehicles and gold and silver jewelry). For example, in cities like Chengdu and Wuhan, entrepreneurs can develop a circular economy model of “old – item recycling – refurbishment – resale” around the “trade – in” policy. In strong live – streaming e – commerce cities like Hangzhou, they can combine the “Zhejiang High – quality Cloud Products” consumption vouchers to create a full – link consumption scenario of “local specialty products + live – streaming sales + offline experience stores”.
Deeply cultivate new consumption scenarios and shift from the “traffic code” to the “content ecosystem”. The key to innovative scenarios such as the first – store economy, non – standard commerce, and the integration of culture and tourism lies in “content is king”. Entrepreneurs should avoid blindly copying the “internet – celebrity model” and design content around the core needs of the target customer group (such as emotional healing, social identity, and cultural experience). For example, in the “non – standard commerce” in Chengdu, they can combine local culture (such as Sichuan opera and teahouses) to create an “immersive cultural consumption space”. In the development of Wuhan’s cultural and tourism IP, they can extend the industrial chain of the “Garlic Bird” IP (such as cultural and creative products, theme restaurants, and parent – child interaction) to improve the commercial conversion ability of the IP. In the field of Hangzhou’s live – streaming e – commerce, they can focus on vertical categories (such as beauty products and agricultural products) to train “expert – type anchors”, reduce the dependence on top – tier traffic, and build a stable private traffic pool.
Pay attention to the trend of service consumption and pre – layout the integration model of “physical + service”. As service consumption becomes the core increment during the 14th Five – Year Plan period, entrepreneurs need to pre – layout the coordination between service consumption and physical consumption. For example, in Chengdu’s performing arts economy, they can develop a one – stop service of “concert tickets + surrounding catering discounts + hotel accommodation packages”. In Hangzhou’s live – streaming e – commerce, they can add value – added services such as “product – use teaching live – streaming” and “after – sales community service” to enhance user stickiness. In Wuhan’s cultural and tourism consumption, they can launch a composite consumption product of “scenic spot visits + intangible cultural heritage experiences + special food courses”. Through the model of “physical sales + service value – added”, they can not only meet the diversified needs of consumers but also increase the customer unit price and repurchase rate.
In short, the reshuffle of the top ten consumption cities in the first three quarters of 2025 is not only a achievement of the “policy – driven + scenario – innovation” in central and western cities but also a microcosm of the transformation of China’s consumption market from “scale expansion” to “structural upgrading”. Entrepreneurs need to take “demand insight” as the core, “scenario innovation” as the starting point, and “ecosystem coordination” as the support to seize opportunities in the changing regional consumption pattern and achieve long – term sustainable growth.
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