Consumers showing tilt toward private labels

The Spring Festival product landscape in China is undergoing a major shift, with consumers placing increasing emphasis on health, innovation, and personalization in their holiday shopping.

Traditionally dominated by red-themed goods symbolizing prosperity and good fortune, this year's offerings have diversified toward more youthful and vibrant designs, reflecting the evolving tastes of younger, trend-savvy consumers.

At a Walmart store in Shenzhen, Guangdong province, for example, the shelves are adorned with colorful hues and playful, eye-catching designs — an obvious appeal to small families and younger shoppers.

In addition to these fresh aesthetics, popular brand collaborations and viral cultural elements have made their way into limited-edition gift sets in an effort to stimulate demand.

Walmart's shelves now feature products including Zootopia 2 IP licensed items, countdown calendar chocolates and candy blind box sets in collaboration with leading confectionery producer Hsu Fu Chi, as well as cilantro-flavored yogurt, and "Mahjong Tile" biscuits symbolizing "a great start".

Zhu Jun, senior vice-president of Walmart China, said that Spring Festival celebrations are diversifying.

"Whether it's family reunions, travel, or self-care relaxation — they all reflect today's customers' pursuit of a better life," he said.

Jason Yu, general manager of CTR Market Research, said today's consumers are placing greater value on individuality, emotional connection, and design appeal. "By incorporating popular trends — vibrant colors, modern designs, and new intellectual properties — brands can break free from the homogeneity of traditional Spring Festival offerings and create products that resonate with younger consumers," he said.

This evolution is not only aesthetic, but also represents new opportunities for innovation, particularly within the growing private-label sector.

Private-label products are now central to the fast moving consumer goods market in China. According to the 14th China Shopper Report 2025, jointly released by Worldpanel and Bain & Company, private-label goods accounted for 2 percent of FMCG sales in the third quarter of 2025, reflecting a 44 percent growth over the prior two years.

Retailers are moving quickly to tap into this demand, expanding their private-label portfolios by leveraging shopper insights and integrated supply chains. Retailers such as Walmart, or Wumart, no longer just keep pace with consumer trends, they are proactively meeting them by developing exclusive products tailored to these new preferences.

For example, Walmart China, in particular, has embraced this trend with its "Marketside" line, which focuses on fresh ingredients, health-conscious options, and simple formulations. The company has developed nearly 1,000 stock-keeping units under its private label, a segment that, while still in its early stages, has already become a key component of Walmart's overall strategy, said Zhu.

Zhu said that the company is expanding its private-label offerings as part of a larger format shift, which emphasizes meeting the evolving needs and preferences of consumers. By prioritizing partnerships with leading brands and cocreating products with suppliers, Walmart is positioning itself for long-term growth, he added.

This trend is part of a broader shift within the retail industry.

Yu said that the rise of private labels is not isolated to one retailer, but is indicative of a larger market shift. Small retailers, in particular, are using private labels to overcome pricing challenges and compete with larger, established brands.

As China's manufacturing sector matures, e-commerce platforms have enabled small manufacturers to deliver high-quality products at lower costs. Consumers, in turn, are increasingly looking for "comparable quality at lower prices", alongside fresh, innovative experiences that offer convenience, Yu added.

The holiday season also sees more demand for retailers and products that provide convenience.

Walmart is expanding its community stores, designed to meet the fast-paced needs of urban families. With four new locations opening in Shenzhen in December 2025, Walmart continues to scale its "small, refined, and nearby" store model, offering a range of products catering to busy shoppers. These stores focus on fresh produce, bakery items, ready-to-eat meals, and snacks, all with an emphasis on value and quality.

Walmart's community stores underscore the growing importance of convenience and value. Offering around 2,000 SKUs across multiple categories, these stores have received positive customer feedback, with increased foot traffic and repeat purchases reflecting the appeal of their "10-minute walkable living circle" concept, said the company.

The company's most recent financial results highlight the significance of optimizing its supermarket format.

For the third quarter, the company reported net sales of $6.1 billion, a 21.8 percent increase year-on-year, with comparable sales up 13.8 percent, largely driven by its membership store (Sam's Club) growth and strong e-commerce performance.

Meanwhile, the broader retail landscape is experiencing rapid growth across new channels.

Membership-based retailers, snack chains, and discount formats have seen year-on-year expansions of 40 percent, 51 percent, and 92 percent, respectively, according to Kantar. This reflects a deeper consumer trend toward value, convenience, and experience, with shoppers increasingly prioritizing affordability without sacrificing quality, said Kantar.

"Channels have become active demand generators rather than passive sales endpoints. Brands need to rethink how they partner with retailers and platforms — treating each channel as an ecosystem for innovation, engagement, and value creation," according to Derek Deng, head of Bain & Company, in China Shopper Report 2025.

Retailers and brands that can successfully integrate these insights into their product offerings and go-to-market strategies will be the ones to lead the next phase of FMCG growth in China, said Deng.