As China enters a new era of economic moderation, the rules of brand marketing in the world’s second-largest consumer market are rapidly evolving. Totem’s 2025 China Marketing and Media Trends report, published in December 2024 in partnership with Campaign Asia, provides a timely and nuanced view of these shifts. Based on a survey of 95 marketing leaders, the report captures the current mood and the strategic recalibrations underway.
This article summarises the key themes from the report, highlighting how British brands can adapt to a more cautious yet still opportunity-rich environment.
China’s economic slowdown: What it means for marketers
After decades of near-uninterrupted expansion, China’s consumer economy has slowed significantly. A growing middle class once fuelled seemingly boundless growth; now, many consumers are becoming more selective, cautious, and value-conscious. According to Totem, 2024’s consumption growth was described as “glacial”, with e-commerce sales growing modestly (12-15%) and physical retail suffering widespread closures.
British brands that are used to betting on China’s lower-tier cities for rapid growth must now adapt. Strategies in 2025 are shifting towards performance-driven marketing, precision targeting by generation and income tier, and a renewed focus on return on investment. Expansion for its own sake is being replaced with prioritised spending and cautious optimism.
Digital marketing in China: Where to invest in 2025
Despite broader economic pressures, China remains a global frontrunner in digital commerce and marketing innovation. Social commerce in particular, spanning livestreaming, influencers (KOLs), and beyond, is proving resilient. In fact, over half of surveyed brands plan to increase their social media budgets in 2025, even as overall budgets shrink.
This presents an opening for UK companies with digital expertise. Brands that understand the local tech landscape and can tailor their approach to Chinese consumer behaviours across platforms like RED, Douyin, and WeChat will be best placed to succeed. Notably, the focus has shifted from generating hype to fostering confidence and trust, underscoring the importance of credible content and community engagement.
Sentiment and spend: A reality check
The brand sentiment going into 2025 is cautious. Totem’s survey found that only 17% of marketing leaders were optimistic about the year ahead, while nearly half expected to cut their marketing budgets. Most brands are narrowing their focus to proven channels and core customer segments. Spending is being redirected away from traditional media and toward performance-driven digital and social commerce tools.
For British brands, this shift calls for prudence and agility. Success in 2025 will mean doing more with less – delivering measurable returns and tightening the link between marketing activity and sales performance.
Gen Z in China: A key demographic for British brands
One of the most significant strategic pivots in 2025 is the move from city-tier segmentation to generational targeting. While Gen X and Y still drive purchasing power, it is Gen Z that increasingly shapes trends and brand perceptions.
Despite youth unemployment and rising disillusionment, China’s Gen Z remains curious, digitally fluent, and trend-driven, often supported by family safety nets. They seek novelty, relevance, and authenticity in their brand engagements. British brands can win here by aligning with Gen Z values such as sustainability, creativity, and personal expression.
The report recommends that brands without a clear demographic focus consider making Gen Z their “anchor audience” – not just for the short-term gains but to build long-term brand equity.
Emotional branding: Standing out in a price-sensitive market
As discounting becomes widespread, foreign brands, which are often at a cost disadvantage, must lean into emotional resonance to justify their price points. Totem identifies three emotional levers that particularly resonate with Chinese consumers: humour, nostalgia, and escapism.
Gen Z, in particular, is seeking moments of escape – from Covid-era constraints, economic pressures, and digital fatigue. Meanwhile, older consumers find comfort in nostalgia and familiar quality. British brands are well-placed to tap into these emotional triggers through rich storytelling, cultural references, and brand heritage.
In 2025, it’s not about being louder – it’s about being more meaningful. Emotional relevance will be a key differentiator.
China retail trends: From malls to pop-ups
A fascinating new trend is the rise of “swarms” – crowds that converge on specific retail activations or pop-ups driven by online buzz, especially via platforms like RED. These gatherings offer excitement, community, and value, an antidote to social isolation and screen fatigue.
For British brands, this creates a compelling opportunity to rethink their physical presence in China. Instead of long-term leases in traditional malls, think short-term, high-impact brand activations that create sharable, offline-to-online experiences – tea ceremonies, fashion events, or VR demos rooted in British culture could work especially well.
UK-China trade and market entry in 2025
The global context in 2025 is fraught with uncertainty. The return of Donald Trump to the US presidency has reignited trade tensions, with China likely to retaliate against American brands. Some experts foresee closer economic ties between China and non-US markets, including Europe and Canada.
For post-Brexit Britain, this presents both risk and opportunity. UK brands that position themselves as independent and constructive partners to China may find a window to strengthen bilateral trade relationships, particularly as Chinese authorities look for trustworthy foreign partners.
The long-term view: Strategic optimism
Despite the short-term headwinds, Totem’s report ends on a cautiously optimistic note. There are signs that China may emerge from the downturn ahead of other major markets, especially if government stimulus and private-sector confidence gain traction. The return of tech figure Jack Ma in late 2024 has also been read as a symbolic gesture of renewed support for innovation.
For British brands, the message is clear: don’t retreat from China, but refine your approach. Targeted, digitally savvy, emotionally intelligent strategies will serve brands well in this next chapter.
