Customers purchase goods at a Pangdonglai store in Xuchang, central China's Henan Province, Aug. 22, 2024. [Photo/Xinhua]

In the unassuming city of Xuchang in Henan Province, central China, the grocery chain store Pangdonglai has sparked a shopping revolution, which has transformed this lower-tier city into a mecca for the country's vast consumer population.

"We began lining up at 7:30," said a customer surnamed Ye, who drove over 400 kilometers from Wuhan to Xuchang, clutching two large bags of deli food he had bought from a Pangdonglai flagship store.

While some queue for hours to experience what many call "the ceiling of Chinese supermarkets," others merrily jostle for meticulously arranged braised meat, baked goods and seafood, which are no cheaper than other groceries.

At a time when some e-commerce platforms have launched hyper-competitive pricing to chase dwindling consumer loyalty, Pangdonglai's brick-and-mortar stores have taken an unconventional approach to achieve the commercial spectacle.

Pangdonglai founder Yu Donglai recognized that China's consumer scene is undergoing a seismic shift, and the key to boosting consumption is in mastering emotional alchemy, and tapping into feel-good spending.

Emotional appeal 

In Pangdonglai, shelves are illuminated with targeted lighting to accentuate products, quality fruits are labeled with their sugar content levels, and different types of chili peppers come with cooking recommendations.

Food posters display the names of quality inspectors; some are even marked with wholesale prices, revealing the profit margins to empower customers with informed purchasing decisions. Also, bulk foods are labeled with the number of items per 500g to prevent checkout price confusions.

Beyond these thoughtful touches, this premier shopping destination offers considerate services, like valet parking, pet daycare, well-equipped mother-and-child rooms, and a 3:8 ratio of male-to-female toilet stalls, transforming ordinary shopping into a journey of psychological fulfillment.

Recognizing that long queues might spoil the shopping experience, Yu suggested in a December post that out-of-town shoppers avoid traveling to Pangdonglai.

Moreover, Pangdonglai prioritizes human respect in its corporate culture, offering employees 40-day paid annual leave, 10-day "leave when you're unhappy," and banning work calls outside office hours.

These benefits, in turn, foster a sense of closeness with customers. "It feels like a nostalgic mom-and-pop store," commented a fan of the supermarket online.

During the Chinese New Year holidays, the supermarket chain achieved a staggering single-day revenue of 100 million yuan (13.9 million U.S. dollars), matching the total eight-day holiday income of a nationally renowned 5A-level tourist attraction in the same province.

Last year, its annual revenue surged by nearly 60 percent year on year, sharply contrasting with the struggles of traditional retailers that faced store closures and operational cutbacks.

"Pangdonglai's popularity shows that Chinese consumers still have strong spending power," commented Bayuejunjie, a business blogger on Weibo. "They're not cutting back on spending, but are more focused on emotional rewards than before."

Indeed, its success is not a local phenomenon. After remodeling about 40 stores in major cities like Beijing and Shanghai to Pangdonglai's standards, Yonghui, one of China's largest supermarket chains, has seen significant sales increases despite its overall declining revenues.

Yu insisted that a good firm should derive its value from quality, not scale. Instead, they're encouraged to learn from his business philosophy for a better life. "Many people inquire about replicating our model, but what truly matters is understanding our corporate culture."

His credo echoed national policymakers' judgment that the country's main contradiction exists in the gap between people's growing needs for a better life and uneven insufficient development.

In China's maturing market, businesses must emphasize emotional and experiential elements to meet consumers' growing demand for authentic value, said Song Xiangqing, deputy head of the Commerce Economy Association of China.

This year's government work report has also called for special measures to boost high-quality supply and enhance the consumer environment, aiming to unlock diverse and differentiated consumption potential and promote consumption quality upgrades.

From needs to wants 

Creating new consumption scenarios with quality, stylish goods are igniting new demands for China's expanding middle-income population.

Homegrown smart home appliances such as robot vacuum cleaners and AI-based learning devices are becoming common in Chinese households.

This contrasts with a mere decade ago when many Chinese consumers traveled to Japan's Akihabara to snatch up toilet seats and rice cookers.

Starting at 19,999 yuan, Huawei's trifold Mate XT phone generated over 5 million pre-orders upon release last September. This month, Xiaomi's 529,900-yuan SU7 Ultra, with its glossy finishes, has become a trendy icon buyers tend to show off.

The mystery boxes in Pop Mart's flagship stores have proven to be a significant hit as they capitalize on the growing trend of niche consumption. This success is largely driven by urban young women who are drawn to the blind-box culture for its excitement, anticipation and the sense of community it fosters among collectors.

Japanese social scientist Atsushi Niura noted that once basic needs like food, clothes and appliances are met, consumers will pursue higher fulfillment through self-understanding and social connections.

"Products with emotional appeal and social bonds tend to break through consumers' psychological price barriers and surge in popularity," said Tang Jiansheng, deputy secretary-general of the Shanghai Consumer Council.

Notably, Chinese younger generations are spending more on their hobbies, fueling niche industries like the snow-based economy. China Tourism Academy data has shown that during the recent snow season, the country's ice-and-snow tourism is expected to have attracted more than 500 million visitors, representing a year-on-year increase of approximately 20 percent.

In 2024, the expenditure of Chinese residents on education, culture, and entertainment surged by 9.8 percent, which was significantly higher than the increase in spending on food, clothing and household goods, according to the National Bureau of Statistics.

"China's consumption market is marked by 'smart' features as young consumers can accurately spot affordable products while willing to pay a premium for those that align with their values," said Tang.

"This behavior, seemingly contradictory, essentially reflects the upgrade of the country's demand levels," Tang added.