Year in Review: How Price Wars, Platform Battles and IP Booms Defined China’s 2025
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In 2025, boosting domestic consumption graduated from an industry consensus to a top-tier national strategy. Yet by the end of the year, the world’s second-largest economy presented a paradox: government stimulus flowed freely, but prices across the board continued to fall.
In the second half of 2024, Beijing deployed 300 billion yuan ($41 billion) in special treasury bonds — colloquially known as the “national subsidy” — to support trade-ins for equipment and consumer goods. The cash injection provided a lifeline to industries plagued by overcapacity and weak domestic demand, including electric-vehicles, home appliances and consumer electronics. While the subsidies temporarily juiced demand, they could not stabilize the broader pricing landscape. As the subsidies began to taper off in the third quarter of 2025, the underlying fragility of consumer confidence reemerged.
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- Despite 300 billion yuan in government subsidies, China faced persistent deflation in 2025 as consumer goods prices fell 2.4% and domestic demand remained weak.
- Fierce price wars and regulatory crackdowns defined e-commerce and offline retail, while major acquisitions and corporate disputes reshaped the industry landscape.
- Cultural sectors thrived: ‘Ne Zha 2’ grossed 15.4 billion yuan, micro-drama industry neared 90 billion yuan, and experiential tourism and local sports boomed.
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Who’s Who
- JD.com Inc.
- In 2025, JD.com Inc. launched a food delivery service, entering a competitive market already occupied by Meituan and Ele.me. This move sparked a subsidy-driven price war among the three companies, negatively impacting their profitability. Consequently, JD.com reported a significant decline in profits for the third quarter of that year.
- Alibaba Group Holding Ltd.
- Alibaba, a Chinese e-commerce giant, entered the food delivery market in 2025 with its Ele.me platform, fiercely competing with JD.com and Meituan. This led to a subsidy-driven price war, impacting profitability. Alibaba reported a sharp profit decline in the third quarter due to this intense competition.
- Meituan
- Meituan, a major player in China's food delivery market, faced significant challenges in 2025. It swung to an adjusted net loss of 16 billion yuan, a stark contrast to its 12.8 billion yuan profit the previous year. This loss was largely due to a fierce subsidy-driven price war initiated by JD.com's entry into the food delivery sector.
- Huolala
- Huolala, a logistics platform, was implicated in a new type of fraud in 2025. Scammers exploited a legal loophole that allowed such platforms to disclaim responsibility for transported goods, complicating efforts by victims to recover funds and making it harder for law enforcement to tackle complex criminal networks.
- Miniso Group Holding Ltd.
- Miniso Group Holding Ltd., a budget retailer, acquired a controlling stake in Yonghui Superstores Co. Ltd., China's second-largest supermarket chain. Miniso founder Ye Guofu is directly supervising Yonghui's store overhaul, modeling them after Pangdonglai, a regional standout known for quality and customer service.
- Yonghui Superstores Co. Ltd.
- Yonghui Superstores Co. Ltd. is China's second-largest supermarket chain. In 2025, Miniso Group Holding Ltd., a budget retailer, acquired a controlling stake in Yonghui. Under Miniso founder Ye Guofu's supervision, Yonghui began overhauling its stores, emulating Pangdonglai's model of high-quality products, exceptional customer service, and generous employee benefits.
- Pangdonglai
- Pangdonglai is a regional supermarket known for its high-quality products, excellent customer service, and generous employee benefits. Its model became an inspiration for Miniso Group Holding Ltd., which acquired Yonghui Superstores Co. Ltd., China's second-largest supermarket chain, and began overhauling its stores based on Pangdonglai's success.
- Boyu Capital
- Boyu Capital is a private equity firm. In 2025, alongside CPE, Boyu Capital agreed to invest approximately $2.4 billion to acquire the operating rights for Starbucks Corp.'s China operations. This move occurred as foreign brands like Starbucks faced intense competition from domestic rivals in China.
- CPE
- CPE, also known as 中信产业基金, is a private equity firm. In 2025, CPE agreed to invest approximately $350 million to acquire operating rights for Burger King Corp.'s China operations. This move aimed to navigate the fierce competition from domestic challengers in China's dining sector.
- Starbucks Corp.
- Private equity firms Boyu Capital and CPE agreed to invest approximately $2.4 billion and $350 million respectively to acquire operating rights for the China operations of Starbucks Corp. These legacy foreign brands faced fierce competition from domestic challengers like Luckin Coffee Inc., Cotti Coffee and Tasiting, a Chinese-style burger chain.
- Burger King Corp.
- In 2025, Burger King Corp.'s China operations attracted investment from the private equity firm CPE, which agreed to acquire operating rights for approximately $350 million. This occurred amidst fierce competition from domestic challengers like Tasiting, a Chinese-style burger chain.
- Luckin Coffee Inc.
- Luckin Coffee Inc. is mentioned as a domestic challenger that contributed to the fierce competition faced by legacy foreign coffee brands like Starbucks Corp. in China during 2025. This competition is highlighted within the context of a structural shift in offline retail and consumption trends.
- Cotti Coffee
- Cotti Coffee is a domestic challenger in China's dining sector. In 2025, it contributed to fierce competition for legacy foreign coffee brands like Starbucks Corp., which faced challenges from domestic players.
- Tasiting
- Tasiting is a Chinese-style burger chain that is mentioned as a domestic challenger to legacy foreign brands like Burger King in China's dining sector. It is part of a trend where domestic food and beverage companies are competing fiercely with established international chains.
- Hangzhou Wahaha Group Co. Ltd.
- Hangzhou Wahaha Group Co. Ltd. is a Chinese beverage giant. Following the death of its founder, Zong Qinghou, a succession battle erupted between his daughter, Zong Fuli, and her three half-siblings, previously unknown to the public. This dispute dismantled the founder’s image of frugality and stability.
- Hongsheng Group Co. Ltd.
- Hongsheng Group Co. Ltd. is a company that Zong Fuli, the daughter of Hangzhou Wahaha Group Co. Ltd.'s founder, moved production to following a succession battle. This move aimed to separate her management control from Wahaha.
- Pop Mart International Group Ltd.
- Pop Mart International Group Ltd. experienced significant global success with its elf doll character, Labubu. This intellectual property (IP) driven product propelled the company's annual revenue towards a projected 30 billion yuan, highlighting the booming "Guzi" economy.
- ByteDance
- **ByteDance**'s Hongguo Short Drama app became the leading global platform for "micro-dramas" in 2025. These short, mobile-friendly series contributed to a 90 billion yuan industry, surpassing traditional film box office revenue. The app achieved 200 million monthly active users, showcasing the company's significant presence in the booming IP-driven economy.
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What Happened When
- Second half of 2024：
- Beijing deployed 300 billion yuan in special treasury bonds to support trade-ins for equipment and consumer goods.
- 2025：
- Miniso Group Holding Ltd. acquired a controlling stake in Yonghui Superstores Co. Ltd.; the self-titled 'Guzi' and 'micro-drama' economies grew rapidly; a succession battle broke out at Wahaha after Zong Qinghou's death; Pop Mart’s Labubu became a global hit; the inaugural Jiangsu Football City League took place; the micro-drama industry nearly reached 90 billion yuan in value.
- Spring Festival 2025：
- The animated film ‘Ne Zha 2’ was released, later breaking multiple box office records.
- First three quarters of 2025：
- Sales volume for fast-moving consumer goods in China rose 3.8%, but average selling price fell 2.4%; prices declined in 19 out of 27 categories tracked.
- Throughout 2025：
- Regulators targeted e-commerce policies including 'refund only', livestreaming tipping, and algorithmic price discrimination; a brutal price war occurred in physical retail.
- Third quarter of 2025：
- Subsidies began to taper off, revealing renewed consumer confidence fragility; recovery started for top-tier luxury, while affordable luxury kept losing ground.
- By end of 2025：
- China's government stimulus continued but overall prices kept falling; deflationary pressures persisted.
- December 2025：
- Bain & Co. and Worldpanel released a report highlighting deflationary trends in fast-moving consumer goods in China.
- Earlier in 2026：
- U.S. President Donald Trump intensified trade war tariffs on China, triggering canceled export orders and manufacturers shifting goods to the domestic market.
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