What Alibaba’s new index reveals about China’s consumers

For years, the playbook for winning in China was a mix of big-name endorsements, heritage storytelling, and a relentless focus on the Tier-1 coastal elite. That playbook is now obsolete. The China Online Consumer Brand Index (CBI), a landmark study from Peking University and Alibaba, crunches the numbers on nearly one billion consumers and reveals a market that is not just evolving, but has fundamentally transformed. The report, released August 20, isn’t just another data dump; it’s a stark look at a new consumer psyche — one that is more pragmatic, digitally native, and geographically diverse than ever before. For global brands, the findings are both a warning and a massive opportunity. Simply showing up is no longer enough. China’s CBI, developed by Peking University's National School of Development in partnership with Alibaba's Taobao and Tmall Group, evaluates brands across four key dimensions: Brand Awareness (32.5%), Brand Novelty (27.5%), Customer Loyalty (22.5%), and Customer Satisfaction (17.5%). The index uniquely emphasizes Brand Novelty—reflecting China's appetite for innovative, fast-growing brands that appeal to younger consumers. Here are five critical lessons from the CBI data that should be on every executive’s desk. 1. The lab coat is the new logo: Function beats fame The era of “prestige theater” is over. Chinese consumers, armed with endless information and a healthy dose of skepticism, are prioritizing demonstrable results over brand storytelling. The CBI data shows a clear pivot towards products that deliver measurable, science-backed efficacy. Nowhere is this clearer than in the hyper-competitive beauty sector. SkinCeuticals, a L’Oréal-owned brand, ranks an impressive 82nd overall and high within its category, not because of a celebrity face, but because of its clinical reputation. With 45% of its Tmall customers under 30, SkinCeuticals has masterfully cultivated an image of dermatological authority. This isn’t just marketing; it’s a strategy of “evidence-based consumerism.” They’ve bypassed traditional media, instead empowering dermatologists and skincare influencers (KOLs) to become their advocates, effectively turning scientific validation into a powerful status symbol. The lesson is clear: Prove your claims, because this new generation is checking the receipts. 2. The innovation gap: Local agility outpaces global legacy In China’s fast-evolving market, speed and adaptability are now the ultimate competitive advantages. While legacy brands fine-tune global campaigns, local players are launching, iterating, and capturing market share at a blistering pace. This is especially true in emerging categories like pet care and collectibles. Consider the pet food market. While a global giant like Royal Canin (ranked 73) still holds a top spot due to its established presence, the real story is the rapid ascent of local brands. Six of the top seven pet food brands are Chinese. Rosy Fresh, for example, didn’t just copy Western trends. It tapped into the “humanization” of pets by offering low-temperature baked and freeze-dried foods — techniques that resonate with health-conscious urban pet owners willing to pay a premium for what they perceive as superior nutrition. Meanwhile, Pop Mart (31) has built a multi-billion dollar empire on the concept of “blind box” toys. Its masterstroke was creating characters without backstories, enabling a generation accustomed to digital self-expression to project their own narratives onto the products. This isn’t just selling a toy; it’s selling a canvas for identity. This agility in product development and psychological insight is where many larger, slower-moving international firms are falling behind. 3. Niche domination: The end of mass-market thinking The most startling insight for legacy brands may be this: The path to growth in China is no longer about broad appeal, but about dominating a highly specific niche. The CBI report found that nearly 40% of the 100 fastest-growing brands are leaders in niche segments. The standout example is Laopu Gold (老铺黄金), ranked 20. In a jewelry market saturated by legacy players like Chow Tai Fook, Laopu Gold sidestepped the competition entirely. It rejected the standard model of selling gold by weight and instead focused on ancient, intricate craftsmanship, pricing their items “by the piece” like works of art. With only a handful of meticulously designed stores, it positioned itself alongside top-tier global luxury houses, commanding both high prices and immense cultural cachet. Laopu Gold proved that in the new China, you can become a giant by thinking small and deep. 4. The international mandate: A third of the top, but the clock is ticking Let’s be clear, international brands are not losing China. They still hold a formidable one-third of the CBI’s top 500 rankings, with Apple leading the entire index. This demonstrates the immense and enduring power of global brand equity, technological leadership, and aspirational appeal. Chinese consumers still want the best, and are willing to pay for it. However, the domestic challengers are closing the gap with alarming speed. Huawei (2) and Xiaomi (3) are not just competing on price, they are out-innovating in areas like brand keyword search volume and sophisticated membership programs, building deep, loyal communities. The success of international brands is now contingent on treating China not as a sales region, but as a hyper-competitive ecosystem where business must innovate for China, not just market to China. 5. The new map of money: Second-tier cities are the real battleground Perhaps the most significant long-term trend identified by the CBI is the further geographic diffusion of wealth and consumer power. While the world focused on Shanghai and Beijing, cities like Hefei, Zhengzhou, Chongqing and Nanchang have quietly emerged as hotspots of high average consumption quality, sometimes even surpassing their Tier-1 counterparts. This is not just about rising incomes. It reflects a deeper trend of “consumption upgrading” across the country. Consumers in these cities are increasingly sophisticated, demanding the same quality and brand diversity as those in the coastal megacities. For brands, this means the Tier-1 strategy is no longer sufficient. The next wave of growth will come from understanding the nuanced cultural and economic landscapes of these rising urban centers. Brands that build logistics, marketing, and community-building strategies tailored to these new frontiers will secure the next decade of growth. To sum up, the data is unequivocal: Chinese consumers have graduated from being passive recipients of brand messaging to active, discerning partners in value creation. The brands that understand and adapt to this new reality will not just win in China, they will define the future of global commerce.

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What Alibaba’s new index reveals about China’s consumers