China's lower-tier cities emerge as key drivers of consumer demand

Consumption in China's smaller cities and counties is outpacing larger urban centers, providing a bright spot in an otherwise subdued national retail environment. These markets accounted for 39.2% of total retail sales in the first half of the year, with per capita spending in some counties in Zhejiang province exceeding that of Beijing and Shanghai in 2025. This trend, driven by lower living costs and rising incomes, is attracting major retailers like Sam's Club and Hilton to expand into these previously overlooked areas.