Chinese consumers are increasingly shifting to stores that offer competitive prices such as conveyor belt sushi chains as the impact of the government’s stimulus spending faded in the latter half of 2025, signaling weakening domestic demand.
An office worker in Beijing said he used his government subsidy to buy a smartphone for his mother. The subsidy, worth about USD 70, lowered the price of the purchase to RMB 4,500 (USD 630). “We didn’t urgently need it, but the subsidy made it cheaper, so we went ahead and bought it,” he said.
But he bought nothing during the Singles’ Day sales campaign, a major retail event that runs in November. “I can’t just open up my wallet” when there is no prospect for a salary increase, he said, adding that there was nothing he particularly wanted to buy.
Sales during the Singles’ Day campaign rose 14.2% on the year, according to a Chinese research firm, but growth slowed compared to the 26.6% increase that companies logged in 2024.
The government allocated RMB 300 billion (USD 42 billion) to the subsidy program in 2025, and from January it expanded the policy to apply to purchases of such devices as smartphones and tablets. But areas such as Shanghai and Anhui switched to a lottery system for the subsidies from summer, dampening consumer enthusiasm. Some places have already ended the payments.
The subsidy program had the effect of front-loading demand. A Morgan Stanley survey of about 2,000 Chinese consumers found that about 70% moved forward their purchases by up to six months because of the subsidies. Even with the financial boost from the program, the effect is proving short-lived.
There were only a few customers in a Beijing smartphone store in early December 2025. Smartphone makers are trying to lure their customers by taking such steps as selling new models at cheaper prices. Smartphone shipments in the July-September quarter fell 0.6% on the year, according to US-based research firm IDC.
Chinese leadership set the country’s economic policy at the Central Economic Work Conference, which concluded on December 11. While moving to curb a sharp rise in the deficit, officials maintained their position on using active spending measures to boost domestic demand. While the leadership agreed on improvements on the incentive program, leaning on similar schemes risks further eating into future demand.
With consumption tepid, companies offering strong value at low prices are performing well.
On December 6, Japan’s Food & Life Companies (F&LC) opened two locations of its Sushiro conveyor belt sushi restaurant chain in Shanghai. Crowds gathered early on opening day to get seating tickets. By opening, the restaurant had handed out 697 tickets, with waiting times reaching up to 14 hours.
Sushi plates cost between RMB 10–28 (USD 1.4–3.9) . A local man, his wife and ten-year-old son together ate nearly 30 plates. “It’s really good, and it’s cheap,” he said.
As high-end restaurants in China close one after another, cost-conscious dining options like conveyor belt sushi are gaining popularity. “I care about the value along with the taste when choosing a place to eat out,” said the local man.
F&LC plans to expand its Greater China store count by more than 30% in the fiscal year ending September 2026 from the 160 locations at the end of fiscal 2025. Hotpot chain Haidilao is entering the conveyor belt sushi market, recently opening a store in Hangzhou, Zhejiang.
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.