China's Digital Marketing Market Is Growing 12.6%. Its Shoppers Aren't.
China's digital marketing market grew 12.6% in 2025. Retail sales grew 3.7%, then slowed to 1.1% in early 2026. The 2026 China Digital Marketing Trends Report explains the gap - and why the next growth comes from trust, not reach.
YIVA Digital ·
China's digital marketing market grew 12.6% in 2025, and the internet advertising and marketing market passed RMB 1.6 trillion, according to the 2026 China Digital Marketing Trends Report, a survey of 200 advertisers and 17 marketing scientists. Total retail sales grew 3.7% over the same period. In the first nine months of 2026, they grew 1.1%.
That gap is the story. Advertising is no longer rising with the consumer economy. It is rising because brands are competing harder for a share of a consumer economy that is barely growing.
The report calls it a shift from a "tailwind" market to a "high-challenge" market. The data supports a blunter description: China is no longer a volume story. It is a share-of-trust story.
A 12.6% ad market on a 3.7% consumer economy
Start with the demand side. China's population fell by 3.39 million in 2025 to 1.40489 billion, according to the National Bureau of Statistics. People aged 60 and over account for 23.0% of the population; those aged 65 and over account for 15.9%. The country recorded 7.92 million births and 11.31 million deaths.
Retail sales tell the same story in spending terms. In 2025, total retail sales reached RMB 50.12 trillion, up 3.7%. Online sales of physical goods reached RMB 13.09 trillion, up 5.2%, or 26.1% of total retail. In January-September 2026, year-on-year growth in total retail sales slowed to 1.1%; online goods grew 3.8%.
Against that, the report's market figures are striking: 12.6% growth, a market above RMB 1.6 trillion, and top platforms holding more than 70% share while growing more than 20%.
When the consumer base is shrinking, ad growth is a share fight. Platforms with scale can grow several times faster than the underlying market. Many brands are not buying more customers; they are paying more to reach the same customers, on platforms that increasingly own the path to those customers.
The planning implication: use category volume, not GDP or population, as your base case. If your category is flat, a 10% budget increase is a share-gain plan, not a growth plan. It needs a share target, a competitor target and a payback model — not a reach target.
Confidence is back. It is also K-shaped.
The report's headline confidence number is easy to misread. 30% of advertisers say they have positive investment confidence in the overall marketing market for 2026, and the expected growth rate of their own marketing spend has recovered to 10%. That is not a boom. It is a cautious re-entry, led by a narrow group.
The report identifies the split: high-budget, management-led brands in beauty and healthcare are the most willing to invest; automotive, food and beverage, and lower-budget advertisers are more cautious.
Official consumption data for the first nine months of 2026 show the same K-shape.
| Category | Jan-Sep 2026 growth |
|---|---|
| Communication equipment | +18.1% |
| Cosmetics | +6.1% |
| Traditional Chinese and Western medicines | +4.0% |
| Catering | +2.4% |
| Total retail sales | +1.1% |
| Sports and recreational articles | -3.4% |
| Motor vehicles | -14.9% |
The lesson is not "China is recovering." It is "some categories are recovering, and some are still contracting." A single national strategy is the wrong unit of planning.
The planning implication: build a category-specific recovery curve. Is your category gaining or losing share of wallet? Are you in a premium segment with pricing power, or a discretionary category where the consumer is postponing? Set the budget against that curve, not against the average.
The 83% signal: brand is back on the agenda
The most important number in the report may be 83%. That is the share of advertisers who now include brand goals in their marketing plan — the highest in six years. At the same time, reliance on pure performance goals has fallen. Among high-budget advertisers, 76% now tie marketing metrics directly to business growth.
This is a reaction to arithmetic. In 2025, China's consumer price index was flat at 0.0%. Per capita disposable income rose 5.0%, but per capita consumption expenditure rose 4.4%. In the first three quarters of 2026, income rose 5.3% while consumption rose 3.6%. Households are not converting income growth into spending at the same rate.
In that environment, discounting protects volume for a quarter and erodes price for years. Brand is the lever that compounds: it can lower customer acquisition cost, support premium pricing, and give platforms a reason to keep serving you when paid reach gets more expensive.
The planning implication: protect a brand line item. Move 10-15% of performance budget into brand and content, with a two-to-four-quarter payback window. Measure it with marketing mix modelling and incrementality tests, not platform-reported ROAS.
AI is urgent — but mostly an efficiency layer
85% of advertisers agree that AI adoption is urgent. But the report's detail is more interesting than the headline. 75% say the core goal is efficiency. 46% buy tools from external vendors, 38% rely on employees finding their own tools, and only 11% build in-house. The top barriers are lack of trust, too few success cases and application confusion — "don't know how to apply AI" now ranks as the seventh-biggest marketing challenge.
Current use is concentrated in creative generation, creative design and marketing insight, each used by more than 30% of advertisers. Monitoring and evaluation are the next wave. The strategic gap is not tool access. It is capability: most brands are renting efficiency, not building an advantage.
The report also flags GEO — generative engine optimisation — as a key 2026 breakthrough. As consumers use AI assistants to shortlist products, the brand that appears in the answer, with accurate facts and citations, gets the consideration. Traditional search optimisation does not cover that surface.
The planning implication: pick three to five AI use cases with named owners: insight synthesis, creative variants, content QA, always-on monitoring, and GEO. Set brand-safety and fact-checking guardrails. Measure hours saved and conversion lift, not the number of tools deployed.
The media mix is moving offline and to credible voices
The report's media rankings are a useful correction to the idea that China is an all-digital market. The top three channels for increased investment are mobile internet, content marketing and out-of-home. The hot platforms are Xiaohongshu, short video and WeChat Video Accounts, and Bilibili. OOH is back on the plan through elevator media and large LED screens, connected to online journeys through tap-to-connect interactions.
Content is the second shift. 44% of advertisers plan to increase content marketing investment. Sports events and micro-dramas are each named by more than 30% as priority formats. Confidence in social marketing investment has recovered to 14%, but the composition has changed: KOC and KOS marketing rose 16 percentage points in priority, and 53% of KOL briefs now combine seeding and sales as the goal, up sharply from reach-only deals.
The common thread is trust. In a low-confidence market, reach is not enough. Brands are buying physical presence, third-party proof and content that is useful enough to save. The trust stack is OOH for presence, KOC/KOS for proof, and content for utility.
The planning implication: fund a trust budget, not just a reach budget. Measure branded search, direct traffic, consideration and repeat rate. Those are the metrics that move when trust rises; last-click ROAS will not see most of the effect.
The 2026 playbook: six moves for the next two quarters
- Rebase to category growth. Replace the national average with your category's volume and value curve. Set share targets, not just revenue targets.
- Protect the brand line. Move 10-15% of performance spend into brand and content. Give it a two-to-four-quarter payback window and a separate scorecard.
- Build a KOC/KOS bench. Recruit 50-100 credible voices, not one hero KOL. Brief them on proof, not slogans.
- Treat GEO as a channel. Audit what AI assistants say about your brand, fix the facts, publish structured and citable content, and track AI-answer share.
- Pair OOH with social proof. Use elevator and transit screens for presence; use KOC/KOS and search to close the loop. Measure the halo, not the last click.
- Upgrade measurement. Add marketing mix modelling and incrementality tests to platform ROAS. If you cannot see the brand effect, you will cut the budget that creates it.
The bottom line
China's ad market can grow 12.6% while shopper spending grows 3.7%. But no brand can grow by renting attention forever. The market is not recovering uniformly; it is reallocating. Budgets are moving toward brands that can earn trust — through category leadership, useful content, credible voices and a consistent physical presence.
The winners in the next 12 months will not be the brands that buy the most reach. They will be the brands that turn reach into preference. In a market where shopper spending is not growing, the only durable growth is share of trust.
Sources and methodology
The 2026 China Digital Marketing Trends Report is based on a survey of 200 advertisers and 17 marketing scientists, summarized by Digitaling in February 2026. Market and population data come from the NBS Statistical Communiqué on 2025 National Economic and Social Development, the NBS 1% National Population Sample Survey in 2025, the NBS release on total retail sales from January to September 2026, and the NBS release on household income and consumption expenditure in the first three quarters of 2026.