Dianjing 2026 | Farewell to the Storytelling Session! The Five Major Themes in the Consumer Sector May Attract More Capital Attention

Ask AI · Why is consumption investing shifting from chasing the trend to focusing on fundamentals?

Editor’s Note

2026 is the opening year of China’s “15th Five-Year Plan for the period after the 14th,” and also a critical turning point as China’s economy undergoes a deep transition toward a consumption-driven growth model. The Government Work Report from the Two Sessions mentions that in 2025, China’s total retail sales of consumer goods for the first time exceeded 50 trillion yuan, and consumption’s contribution rate to economic growth reached 52%.

A Guangdong high-quality development conference also pointed the way forward—using “integration of the two industries” as the key, letting the strength of manufacturing lead the excellence of the services sector. Anchored in the Greater Bay Area and looking across the country, Nandu Bay Finance and Society launched “Pointing the Eyes 2026—Industry Watch on Consumption,” exploring China’s consumption resilience and vitality through ten major dimensions amid structural change.

In 2026, the consumer market enters a new cycle. Repair of household balance sheets and a trend toward more rational consumption move in parallel. Segmentation and differentiation in traditional tracks intensify, while emotional spending and technological iteration create new blue oceans. The “Pointing the Eyes 2026 Capital Observation” series aims to look through short-term volatility and focus on structural opportunities—from channel transformation to brand premium, from games in existing markets to incremental growth overseas—using a rational perspective to reveal the core logic and evolution direction of consumption investing.

“Seems like the consumption sector hasn’t seen any particularly big, splashy financing?” Whether entrepreneurs or investment institutions, they raised this question about consumption-sector investment and financing in 2025.

In fact, consumption-sector investment and financing didn’t stop last year. According to an incomplete tally by reporters from Nandu Bay Finance and Society, last year the consumption sector raised at least 8 billion yuan (excluding undisclosed amounts) in industry financing. However, behind those 8 billion yuan, the capital’s investment logic is undergoing profound changes: “chasing hotspots” and “stories” are no longer important “grounds” for investment, and money is also no longer “sprayed” in a lottery-like way; instead, investment is proceeding step by step, and financing is “speaking” through data such as profitability and healthy cash flow.

Beyond being cautious about spending, capital’s outlook on projects is also changing: AI+ projects, the emotional economy, and leading players in niche tracks… still remain high-quality targets that funding is focused on. At the same time, leading companies in the industry—or mature, high-quality assets—are also important directions for where capital flows. Industry insiders judge that in 2026 capital may continue to be cautious in style, but consumption-type projects that are mature, clearly positioned, and have huge potential will still be the first choice for financing.

From “chasing the trend” to “rebuilding the fundamentals”

Consumption investment logic changes

“We feel that the money flowing into the consumption space seems to have become more ‘convergent’ compared with before.”

This is a direct assessment by some consumption-sector entrepreneurs of last year’s industry investment and financing. Through interviews, reporters from Nandu Bay Finance and Society found that last year, some consumption-sector projects—especially those at the start-up stage—were not as easy to raise financing for as in the past.

“Last year our project achieved product rollout. At that time, a few founders planned to bring in investors to scale up. But after reaching out and speaking with people, we found that institutions were extremely cautious about start-up projects.” Xiao Liang, who started his business in 2023, said when recalling last year’s financing experience to reporters from Nandu Bay Finance and Society. “Although we ultimately didn’t get funding, they also provided some useful suggestions. We plan to first build up large-scale operations, and then consider financing.”

In the view of some entrepreneurs, attention from capital toward the consumption industry may have declined compared with previous years. However, under policy themes such as “boosting consumption” and “economic recovery,” what was the actual performance of investment and financing in China’s consumption sector (excluding real estate, automobiles, and bulk consumption) last year?

According to reporters from Nandu Bay Finance and Society, after compiling statistics from multiple channels, in 2025 as a whole, China’s consumption sector disclosed 116 completed investment and financing projects, with a total amount of approximately 8 billion yuan. There were 25 projects at the 100-million-yuan level; in terms of financing rounds, there were 36 angel rounds, and the largest number was 46 for A rounds (including Pre-A, A+, and similar rounds), 7 for B rounds; in addition, there were 9 IPO-related cases (including listings on the National Equities Exchange and Quotations). The financing rounds for the remaining projects were not disclosed.

On September 24, 2025, participating guests entered the venue for the 2025 China Private Enterprises Investment and Financing Fair. Xinhua News Agency reporter Zhao Zishu photographed

Regarding last year’s overall financing momentum, an investor from a Guangzhou investment institution analyzed to reporters from Nandu Bay Finance and Society that consumption-sector financing showed a “dumbbell-shaped” trend: on one end are top mature brands within their track. They have already been validated by the market, and financing is used to replenish ammunition and expand boundaries; on the other end are ultra-early-stage projects, but they must have track scarcity or technological uniqueness, with high substitution thresholds.

“This also means that ‘mid-tier’ projects in the middle zone generally face greater difficulty in raising financing. These projects typically already have a certain operating model, but lack a breakout point and have insufficient growth momentum. Therefore, 2025 was a relatively difficult year for them.” The investor said.

Say goodbye to the “storytelling sessions”

Capital has become “more patient”

Apart from changes in investment direction, the previously popular “tell stories to get financing” model also seemed to stop working effectively last year. Replacing it is that the funding side is showing more “patience.”

“Previously, as long as the ‘story’ was told well—or the project hit the ‘hot trend’ and had some reputation or scale—basically someone would be willing to invest. But now, investors are truly much more cautious than before.” Mr. Zhang in Panyu District shared his experience with reporters from Nandu Bay Finance and Society.

Mr. Zhang has been running his business for more than 15 years. His main business is the design and R&D of motion bicycles and related products. He recalled that in the early days of entrepreneurship, some institutions had shown interest in the scarcity of his track and the appeal of his entrepreneurial story, and wanted to invest—but he rejected them on the grounds of “not yet profitable” and “funds are sufficient.” “At that time, many investors pursued rapid in-and-out, thinking that getting listed was equivalent to success.”

However, in the past two years, Mr. Zhang has observed that investment institutions appear “more patient than before.” The institutions he recently engaged with are no longer rushing to propose an IPO timeline; instead, they focus more on the company’s actual development. “They may look at the sales growth in the last three to five years and whether they have achieved profitability, and then decide whether to invest and how much to invest.”

Mr. Zhang’s experience also reflects the real characteristics of consumption-sector investment and financing over the past year: overall financing rhythms have slowed down, and “get the business running first, then raise financing” has become the mainstream investment logic.

According to reporters from Nandu Bay Finance and Society, compared with the past style of “invest early, get listed quickly, and exit to cash out,” capital’s investment in early-stage projects is clearly reduced today. It is more inclined to invest in mid-to-late-stage projects that have mature profitability models or big-name backing, and decision cycles have also been significantly lengthened. Industry insiders believe this is, on the one hand, because after absorbing multiple lessons, capital has gradually abandoned a “lottery-scratching” mindset; on the other hand, it is also related to the funding reserves of the institutions themselves.

On October 28, 2025, in Guangzhou, at MINISO LAND (City Playground Store), customers choose original IP trendy toy products. Xinhua News Agency reporter Mao Siqian photographed

Some typical cases prove this tendency toward “favoring certainty.” After TOP TOY, a trendy toy brand, was founded for five years and had clearly committed to pushing for a listing on Hong Kong stocks, it only then obtained A-round financing led by Temasek; Bonder Coffee, backed by the Want Want Group, easily received tens of millions of yuan in financing in its early days.

The IPO market is similar. Capital surged toward profitable and well-established leading new tea beverage brands such as Mixue Bingcheng, Hu Shang Ayi, Bawang Chaji, and Gu Ming, driving their stock prices to rise steadily after listing. By contrast, some brands with limited recognition or strongly regional presence—such as the spicy strip company JFM from listings on the National Equities Exchange, and the U.S. Nasdaq-listed Macau liquor trading company Epsium Enterprise (EPSM)—have struggled to attract institutional attention and found fundraising difficult.

Capital favors new tracks and “buying what’s already ready”

When hot money fades, capital’s attention begins to shift toward more niche and more future-oriented emerging fields, and “mergers and acquisitions” has also become another shortcut to obtain growth.

Data show that last year the food and beverage track saw 32 financing events in total, but the total financing amount was only about 1.5 billion yuan, and the average single deal size was less than 50 million yuan (excluding projects with undisclosed amounts). By comparison, in the smart and AI home hardware space, there were 18 financing events, but the financing amount exceeded 2 billion yuan; within that, niche directions such as AI glasses and home smart robots drew especially strong attention. The pet economy sector had 9 financing events last year, with totals of over 700 million yuan, and the investment focus is gradually extending from “emotional consumption” toward health, medical care, and long-term services.

Capital flowing into these relatively niche tracks stems from consensus on their trillion-yuan-level future potential. The smart hardware and pet economy discussed above are both widely regarded within the industry as important tracks with potential to reach trillion-scale. Accordingly, investment institutions hold high expectations for them.

For this point, Mr. Zhu, who has an entrepreneurial layout in the pet space, has deep personal experience. He told reporters from Nandu Bay Finance and Society that his pet pharmaceutical track attracted multiple investment institutions’ attention last year. “Right now, this segment in China is still a ‘blank market,’ with a lack of top-tier companies. There’s large development space and high return potential. So many institutions want to get an early start. For a field like ours, with heavy upfront R&D investment and high technology content, financing is also very necessary.” Mr. Zhu said.

On the other hand, compared with the long and uncertain process of nurturing from scratch, directly “buying ready-made” assets has become a pragmatic choice for many capital players and industrial giants.

On February 6, at a store called “Ji Ai Pet” in Hefei, Anhui Province, staff groom a small dog. Xinhua News Agency

After reviewing the situation, reporters from Nandu Bay Finance and Society found that last year there were multiple horizontal M&A cases in the consumption industry. Some leading companies used these to achieve—or attempt to achieve—cross-border expansion. In October last year, Mixue Bingcheng completed the acquisition of the craft beer brand “Fu Lujia” for a total price of 297 million yuan. Although Fu Lujia is an internally incubated brand associated with Mixue Bingcheng, through this acquisition, Mixue Bingcheng used Fu Lujia to enter the craft brewing beer field across categories. In the same year, in May, Qingdao Beer planned to fund and acquire the well-established Shaoxing-style yellow wine old brand Jimo Yellow Wine, in an attempt to quickly enter the yellow wine market; however, that transaction was terminated in October of the same year due to issues such as equity. In addition, cooperation such as Starbucks China with Boyu Capital, and Burger King China with CPE Yuanfeng, are also large M&A cases in the consumption space that drew significant attention last year.

This clearly shows that capital is more inclined to acquire assets already validated by the market, and to obtain market share and capabilities quickly through integration, rather than “casting a wide net” in early-stage projects.

Observation

Hot money exits

Which projects in the future will draw attention?

“After going through valuation adjustments and market clearing, investors are no longer buying stories about ‘burning money to buy traffic.’ They now require a clearer path to profitability, healthier cash flow, and a more solid business model.” The aforementioned investor pointed out the core concept behind future consumption investment.

After growing more rational, in 2026 and beyond, which tracks will become the focus of capital? After integrating research reports from multiple top securities firms and institutions, reporters from Nandu Bay Finance and Society learned that in 2026, capital’s consumption-sector layout may revolve around five major themes: emotional value and experience consumption, service consumption and the silver economy, “AI+ consumption,” consumption driven by new channels, and healthy consumption.

On December 25, 2025, an AI toy dog was photographed at the 24th Shantou·Chenghai International Toy Gifts Expo held in Shantou, Guangdong. Xinhua News Agency reporter Xiao Ennan photographed

For example, in emotional value and experience consumption, institutions believe that consumers are shifting from merely satisfying functions to pursuing emotional resonance and upgraded experiences. Categories such as IP derivative products, immersive experiences, and spiritual healing have huge potential. For service consumption and the silver economy, changes in the population structure are generating sustained demand for high-quality and professionalized services (including elderly care services, health management, and professional training). For “AI+ consumption,” institutions predict a deep integration between artificial intelligence and consumption scenarios—from smart hardware to personalized recommendations and smart customer service—reshaping the entire consumption value chain. For new-channel consumption, it represents building high value-for-money supply chains. And healthy consumption has always been a “hot trend,” and consumers’ demand for health has never changed.

Therefore, in the view of institutions, these categories are likely to become areas that capital will pay attention to going forward.

A JPMorgan research report predicts that in 2026, China’s consumption market sales and profits are expected to grow by 7.1% and 12.2%, respectively. Demand recovery, policy incentives, industry consolidation, and shifts in generational preferences will reshape investment logic. Puji International (Pudong International) also noted that high value-for-money domestic brands will continue to capture mindshare, while demand for emotional consumption remains strong—consumers, on top of a material foundation, increasingly seek psychological fulfillment.

Industry observers believe that in 2026, although the “financing winter” has not been fully dissipated, a series of M&A cases and policy combinations are accelerating industry clearing and optimization of the competitive landscape. The continued heat in areas such as new tea beverage brands and IP consumption confirms the potential of China’s consumer market. Over the next five years, the consumption industry may face a new wave of consolidation and M&A, and projects that return to the commercial essence and have the ability to continuously create value will win the final favor of capital and the market in this new cycle.

Planning: Wang Ying

Overall Coordination: Chen Yangkai

Reporting and Writing: Nandu·Bay Finance and Society reporter Beibei