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Investing.com - Bernstein analyst Melinda Hu has identified the rise of postmaterialist consumers as a key driver shaping China’s next generation of sector and stock market winners, according to a new research report. This shift in consumer behavior is particularly relevant for investors seeking opportunities in the evolving Chinese retail landscape. InvestingPro offers comprehensive analysis of companies positioned to benefit from these trends, with detailed metrics and expert insights available for over 1,400 stocks.
The analysis challenges the simplistic "consumption downgrade" narrative in China, suggesting that consumers aren’t merely becoming price-sensitive but are fundamentally redefining value through meaning creation, emotional resonance, and identity signaling. Hu describes a shift from "having" to "being," as consumers balance frugality with selective indulgence.
Three defining psychological shifts are changing purchase decisions and brand relationships in China: meaning over materialism, social signaling, and merit over maker. These shifts have transformed consumption into a form of self-expression, where brand choices signal lifestyle preferences, cultural awareness, and social status.
The report highlights three high-growth sectors capitalizing on these evolving priorities: freshly-made beverage chains like Heytea and Mixue (HKG:2097), IP-driven experiential retail companies such as Pop Mart (HKG:9992) and Miniso (NYSE:MNSO), and wellness/active lifestyle brands, particularly niche outdoor brands. Notably, Miniso has demonstrated strong financial performance, with impressive gross profit margins of nearly 77% in the last twelve months, reflecting its successful business model in the competitive retail space.
Chinese consumers are increasingly integrating carefully selected brands into their personal storytelling, seeking products that authentically reflect and enhance their self-identity in a socially visible way, according to the Bernstein research. For investors looking to capitalize on these trends, InvestingPro provides detailed financial analysis and Fair Value assessments of companies in the Chinese consumer sector, helping identify potential investment opportunities in this evolving market.
In other recent news, Shiseido Company, Limited reported mixed financial results for the second quarter of 2025. The company’s revenue experienced a 6.8% decline compared to the previous year, falling short of consensus estimates. However, Shiseido’s core operating profit saw significant growth, rising by 90.5% year-over-year and surpassing analyst expectations. Despite these mixed results, Bernstein SocGen Group raised its price target for Shiseido to JPY2,000 from JPY1,700, while maintaining an Underperform rating.
In another development, Moody’s Ratings downgraded Shiseido’s issuer and senior unsecured ratings to Baa1 from A3, citing prolonged low profitability and challenging market conditions as key concerns. The company’s EBITA margin for the twelve months ending June 2025 was 6.4%, which was below previous estimates. Moody’s also maintained a negative outlook for the company. These recent developments highlight both challenges and areas of progress for Shiseido in the current market landscape.
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