--- title: "China Galaxy Securities: The rise of new consumption drives structural transformation, with domestic goods and technology as the dual driving forces becoming the highlights" type: "News" locale: "en" url: "https://longbridge.com/en/news/243996902.md" description: "China Galaxy Securities released a research report indicating that starting in 2024, leading new consumption stocks in Hong Kong will drive industry growth and expand into the A-share market. New consumption presents five major characteristics: the rise of Z generation self-consumption, rationalization of consumption, AI+ product innovation, differentiated domestic goods substitution, and enhancement of international competitiveness. It is recommended to focus on targets with strong local innovation capabilities and technology consumption areas such as smart cars and drones. The consumption industry has entered an adjustment period since 2021, and the 2024 Central Economic Work Conference will elevate expanding domestic demand to a key task, emphasizing the need to boost consumption" datetime: "2025-06-11T04:34:03.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/243996902.md) - [en](https://longbridge.com/en/news/243996902.md) - [zh-HK](https://longbridge.com/zh-HK/news/243996902.md) --- # China Galaxy Securities: The rise of new consumption drives structural transformation, with domestic goods and technology as the dual driving forces becoming the highlights According to the Zhitong Finance APP, China Galaxy Securities released a research report stating that since 2024, the leading "new consumption" companies in the Hong Kong stock market have driven an industry explosion, which has spread to the A-share market. This round of new consumption exhibits five major characteristics: the rise of Gen Z's self-satisfying consumption, rational consumption driving channel transformation, the emergence of AI+ product innovation, differentiated replacement of domestic products, and a significant enhancement of international competitiveness. It is recommended to focus on targets with local innovation capabilities, as well as technology consumption sectors such as smart cars and drones. ## The main points of China Galaxy Securities are as follows: **Review of the Consumption Industry** 1. Since 2021, the consumption industry has ended a long-term bull market and has overall entered an adjustment period. Since 2024, driven by high-quality "new consumption" leaders in the Hong Kong stock market, new consumption has exploded in the Hong Kong stock market and is expected to spread more widely to the A-share market in the first half of 2025. Behind this round of "new consumption" is a profound change in the relationship between people, goods, and places, as well as purchasing tendencies. 2. In contrast, traditional consumption is under pressure. By increasing the proportion of consumption in GDP, consumption can play an important role in hedging export risks and stabilizing the economic fundamentals. In December 2024, the Central Economic Work Conference will prioritize expanding domestic demand, clearly proposing to vigorously boost consumption and implement large-scale stimulus policies for commodity consumption. **New consumption is the direction of structural benefits or innovative breakthroughs in the process of changes in "people, goods, and places" + consumption tendencies** **Compared to the previous round of new consumption (2017-2021), this round of new consumption has the following significant characteristics:** 1) The self-satisfying consumption of Gen Z, combined with the current lipstick effect, has significant high-frequency emotional consumption characteristics. The previous round of young people's new consumption mainly reflected the consumption upgrade of the marriage industry chain. 2) Rational consumption has led to an increase in the market share of cost-effective brands and a pursuit of retail channel efficiency. The previous round of new consumption was characterized by a large number of brand consumption upgrades and the rise of high-cost channels represented by live streaming and Douyin traffic. The "place" has changed dramatically and is the most unstable; currently, low-cost entrepreneur IP traffic is popular online, with Xiaomi Group and Mao Ge Ping as typical representatives; offline discount retail is rising to meet rational consumption demands. 3) A large number of technological consumer product innovations have emerged; the previous round was driven by digitalization, while this round is driven by AI+. 4) The rise of domestic products is different; the previous round saw domestic brands replacing foreign brands, but with little innovation; this round features true domestic product replacements with products that reflect local Chinese characteristics, such as Mao Ge Ping and Lao Pu Huang Jin. 5) International competitiveness has significantly increased, with some new consumption companies possessing global expansion capabilities, showcasing the growing global influence of Chinese products, culture, technology, and business models. In the future, the Chinese consumption industry will see the emergence of companies like Starbucks, Dyson, Nike, and Disney. **The deep-seated background of demographic structure, the "X/Y/Z" of new consumption:** 1) The marriage rate and birth rate of Gen Z are low, and families are becoming smaller; they have grown up in an era of material abundance, showing no particular obsession with material goods, and are more willing to pay for consumption that satisfies their emotional value, i.e., self-satisfying consumption, which drives demand for pets (stimulating oxytocin) and trendy toys (stimulating dopamine); cost-effective ready-to-drink beverages and leisure snacks stimulate dopamine through taste; introducing uncertainty, instant feedback, social recognition, and scarcity value into business models can continuously activate the dopamine reward system in the brain, driving high-frequency consumption among young people In comparison, the demand related to love, marriage, home buying, and childbirth during the youth of Generation Y is currently weak in the market. 2) Generation Y's consumption is becoming more rational, with reduced spending on brand premiums, increased durable goods consumption due to government subsidies, and a rise in spending on assets like gold for hedging and value preservation. 3) As Generation X ages, and given the generous pension benefits they enjoy, more leisure time and purchasing power are fostering the silver economy and health economy. 4) The demand for entertainment among Generation X/Y/Z is increasing, with the popularity of online literature, short videos, and ultra-short dramas that stimulate dopamine frequently, along with the thriving concert economy and the emergence of phenomenon-level non-professional events such as Guizhou Village Super League, Guangzhou Dragon Boat Race, and the Scottish Premiership. **Rational Consumption + Rise of Domestic Brands + New Consumption Driven by Technology** **Rational Consumption:** 1) Current consumers are less willing to pay premiums for large durable goods, seeking better value-for-money products and services, as well as the lipstick effect. 2) The lipstick effect is reflected in frequent small expenditures that stimulate dopamine consumption, specifically in trendy toys, cost-effective freshly made beverages, leisure snacks, and travel. 3) In terms of pursuing value-for-money products, Xiaomi leads the home appliance market with its cost-effectiveness and marketing strategies targeting young people, while micro-innovations catering to young people's needs (such as integrated machines for underwear) create a catfish effect, revitalizing traditional home appliance leaders. 4) In retail channels, discount retail is on the rise, with value-for-money demands leading to improved channel efficiency and retail channel reforms. 5) In recent years, the number of travelers in China has steadily increased, and leisure travel can stimulate dopamine; however, traditional spending on dining, accommodation, and tickets has not seen significant growth, while the willingness to purchase sportswear, outdoor equipment, and action cameras has increased. **Rise of Domestic Brands:** 1) Most consumer markets have already achieved the replacement of foreign brands with domestic brands. 2) This round of domestic brand rise is not merely about increasing market share of cost-effective products, but also features significant micro-innovations with distinct Chinese characteristics. In the beauty market, Mao Geping developed a light and shadow sculpting highlighter cream based on the facial bone structure and skin characteristics of Asian women, achieving micro-innovation. In the gold and jewelry market, demand for European and American luxury brands has declined, especially as synthetic diamonds impact the value preservation and appreciation of jewelry; against this backdrop, Lao Pu Gold has risen with its ancient handcrafted gold craftsmanship, riding the wave of gold appreciation. **Technology Consumption:** Technology consumer goods are one of the important development directions of new consumption. China's smart cars, drones, robotic vacuum cleaners, boundary-less lawn mowers, and action cameras are globally leading. With the development of AI technology, smart headphones, smart glasses, and AI+toys are rapidly developing and being pushed to the market. Under the development of embodied intelligence technology, exploring various consumption application scenarios for embodied intelligent robots has become an important market hotspot. **Investment Recommendations** Recommend trendy toy sector companies like POP MART and Blokus, freshly made beverage sector companies like Mixue Group and Guming, pet sector companies like Guai Bao Pet, Zhongchong Co., Ltd., and Petty Co., Ltd., leisure snack sector company JINZAI FOOD, and technology consumption sector company Stone Technology; pay attention to Lao Pu Gold, Mao Geping, Luckin Coffee, Cha Bai Dao, Yuan Fei Pet, Wei Long Delicious, Atour, and Guoquan ### Related Stocks - [003000.CN](https://longbridge.com/en/quote/003000.CN.md) - [SBUX.US](https://longbridge.com/en/quote/SBUX.US.md) - [09992.HK](https://longbridge.com/en/quote/09992.HK.md) - [ATAT.US](https://longbridge.com/en/quote/ATAT.US.md) - [BYTED.NA](https://longbridge.com/en/quote/BYTED.NA.md) - [01364.HK](https://longbridge.com/en/quote/01364.HK.md) - [02517.HK](https://longbridge.com/en/quote/02517.HK.md) - [00325.HK](https://longbridge.com/en/quote/00325.HK.md) - [06181.HK](https://longbridge.com/en/quote/06181.HK.md) - [DIS.US](https://longbridge.com/en/quote/DIS.US.md) - [NKE.US](https://longbridge.com/en/quote/NKE.US.md) - [LKNCY.US](https://longbridge.com/en/quote/LKNCY.US.md) - [01810.HK](https://longbridge.com/en/quote/01810.HK.md) - [300673.CN](https://longbridge.com/en/quote/300673.CN.md) - [688169.CN](https://longbridge.com/en/quote/688169.CN.md) - [002891.CN](https://longbridge.com/en/quote/002891.CN.md) - [001222.CN](https://longbridge.com/en/quote/001222.CN.md) - [02555.HK](https://longbridge.com/en/quote/02555.HK.md) ## Related News & Research - [Starbucks Stock (SBUX) Gets Jolt as Company Announces New Round of Layoffs](https://longbridge.com/en/news/286581786.md) - [Starbucks Restructuring Tests Turnaround Plan And Long Term Growth Story](https://longbridge.com/en/news/286668831.md) - [Starbucks cuts 300 corporate jobs, closes offices in $400M overhaul](https://longbridge.com/en/news/286624660.md) - [Starbucks to lay off 300 U.S. employees, shutter some regional support offices](https://longbridge.com/en/news/286570525.md) - [Starbucks says its turnaround is gaining momentum and cuts 300 more jobs](https://longbridge.com/en/news/286573287.md)