Consumption in 2026: Five Highlights and Trends
The year 2026 marks the launch of the 15th Five-Year Plan, with strong emphasis on boosting consumption as a key to ensuring stable macroeconomic performance throughout 2026 and the subsequent years. In the first quarter (Q1) of 2026, the consumer market started on steady footing, as consumption potential was gradually unleashed and the supply-demand circulation operated smoothly and efficiently. Looking ahead into the full year, consumption is expected to maintain its stable trajectory, supported by the accelerated implementation of various consumption-boosting policies and the continuous expansion of innovation-driven momentum. Final consumption will act as a more robust anchor shoring up economic growth.
Five Q1 2026 Highlights on Consumption Performance
Driven by the continued implementation of policies such as trade-in incentives for consumer goods and pilot programs for prize-linked invoices, the consumer market achieved a steady start. In Q1, total retail sales of durable consumer goods reached 12.8 trillion yuan, up by 2.4% year on year, 0.7 percentage points above the fourth quarter of last year. Retail sales of services increased by 5.5%, up by 0.5 percentage points from the same period last year, demonstrating stronger leading and traction. Final consumption expenditure contributed 2.4 percentage points to GDP growth, accounting for 46.7% of overall economic growth, continuing to serve as a primary driver for economic growth. A closer look reveals five prominent highlights in the consumer market performance.
First, the smooth and orderly rollout of trade-in policies ensured steady growth in commodity consumption. In 2026, China continued to refine and implement trade-in policies covering four major categories: automobiles, home appliances, digital products, and smart products. At the beginning of January 2026, the first batch of 62.5 billion yuan in ultra-long special treasury bond subsidies was allocated to local governments to meet the peak consumption demand during the New Year and Spring Festival period, ensuring smooth policy continuity. In Q1, sales supported by trade-in incentives exceeded 430 billion yuan, benefiting over 60 million consumers. Among enterprises above the designated size, retail sales of communication equipment and cultural and office supplies grew by 20.8% and 9.3% respectively in Q1, 3.0 and 3.5 percentage points higher than the January-February reading. Retail sales of high-efficiency home appliances maintained robust expansion.
Second, upside potential in emerging service consumption gained traction. Fueled by holiday arrangement optimization, industrial upgrading, technological innovation, and pilot programs for prize-linked invoices, new types of service consumption flourished. Consumption gained momentum in leisure and travel, cultural and recreational activities, and other sectors, supporting continued strong growth in service retail sales. Boosted by extended Lunar New Year holidays, service retail posted a 5.6% gain in January–February, 0.1 percentage points above both the full Q1 and full-year 2025 paces. Broken down by sector, Q1 saw double-digit retail growth (over 10%) across tourism consulting and rental, cultural entertainment, transportation, and information and communication services. While traditional catering consumption stayed resilient with a 4.2% sales rise. Deep integration between digital technologies and life services spurred the expansion of emerging consumption segments including telemedicine and AI application services, lifting information-based consumption higher. Survey data shows as of end-March 2026, native AI apps hit 440 million monthly active users, with over 130 million new additions in Q1 and a sequential monthly rise exceeding 37%. Information and communication service retail also logged double-digit Q1 growth.
Third, new quality productive forces have accelerated the upgrading of smart, eco-friendly and health-oriented consumption. In recent years, China has advanced the industrial transition toward high-end, intelligent and green development. Bolstered by robust growth of new supply driven by new quality productive forces, consumption in smart, eco-friendly and health-related sectors has seen rapid upgrading. According to the data from the Ministry of Commerce, sales of smart glasses on major e-commerce platforms surged 4.6 times in the first quarter. Sales of first-class energy-efficient washing machines rose by 21.5%, smart blood glucose meters by 20.5%, and outdoor sports equipment by 10.7%. Due to the phasing-out of vehicle purchase tax subsidies, the growth rate of new energy vehicle sales moderated in the first quarter. Nevertheless, overall sales and market penetration climbed month on month. A total of 1.908 million new energy passenger vehicles were sold in the quarter, including 1.252 million units in March, with the penetration rate hitting 51.5%.
Fourth, online-offline consumption kept evolving via continuous model innovation. Iterative breakthroughs in digital intelligence technologies have galvanized online consumption expansion. Q1 online retail of goods and services rose 8.0% year on year: online service retail advanced 8.8%, 1.5 percentage points above its Jan-Feb print and 3.3 percentage points ahead of overall service retail growth; online physical goods retail grew 7.5%, outperforming total physical goods retail by 5.3 percentage points. Sustained digital empowerment has improved supply-demand matching for livestream commerce, whose retail turnover tapped 500 billion yuan in Q1 2026 amid a steady upward track. Back in September 2025, the Ministry of Commerce and Ministry of Finance unveiled pilot support for innovative consumption formats, scenarios and business models to accelerate traditional retail transformation and lift consumption expansion. Q1 2026 online retail of physical goods from above-designated-size enterprises climbed 13.3% year on year, becoming an increasingly important growth contributor for these firms' total retail revenue. Innovation continued to accelerate in online and offline consumption models. The iterative innovation of technologies such as digital intelligence has driven the rapid development of online consumption models. In Q1, online retail sales of goods and services grew by 8.0% year on year. Specifically, online service retail sales rose by 8.8%, up by 1.5 percentage points compared with January and February and higher by 3.3 percentage points than overall service retail; online goods retail sales increased by 7.5%, higher by 5.3 percentage points than overall goods retail. Continuous technological empowerment has facilitated better matching between supply and demand in the live-streaming industry, and live-streaming e-commerce retail sales surpassed 500 billion yuan in Q1 2026, sustaining rapid growth. At the end of September 2025, the Ministry of Commerce and the Ministry of Finance launched pilot programs for supporting new consumption formats, models, and scenarios, further promoting the transformation of traditional retail and driving faster consumption growth. In Q1 2026, the Internet-based retail sales of commodity above the designated size grew by 13.3% year on year, contributing increasingly to overall retail growth of enterprises above the designated size.
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