The New Year has arrived, and China’s economic development has entered a new stage. “Expanding domestic demand” has become the core issue at present. The Outline of the Strategic Plan for Expanding Domestic Demand (2022-2035) issued by the Central Committee of the Communist Party of China and the State Council clearly states that consumption is the main driving force for economic growth, and final consumption is the key to the long-term and stable growth of the economy.

Moreover, the recent Central Economic Work Conference has listed “vigorously boosting consumption, improving investment efficiency, and comprehensively expanding domestic demand” as the top priority for 2025, highlighting the importance and urgency of expanding domestic demand.

For the fashion and luxury goods industry, 2025 is a turning point full of opportunities.

The new round of consumption upgrading has brought about the rise of “high-end experiential retail”, the emergence of “domestic trendy brands”, the “trend of youth-oriented consumption”, and the deepening of “sustainable fashion”.

In this situation, for brands, accurately grasping the “dividends of domestic demand”, deeply studying consumers’ psychology, strengthening localization strategies, and creating products and experiences that meet the needs of local consumers will become the key driving force for new growth.

In terms of policy directions, there are mainly three aspects of the measures to boost consumption this year. First, it is to enhance consumers’ purchasing power. The government will achieve this by promoting residents’ income growth and reducing their burdens.

For example, by optimizing tax policies to relieve the tax pressure on residents and increasing wage levels to raise residents’ disposable income, the government will provide strong support to consumers from the income side.

Second, it is to focus on the “Two New” policies. New forms of consumption and new infrastructure have become important breakthroughs. By expanding digital consumption, which enables shopping to break through the limitations of time and space, and promoting green consumption, which leads the trend of environmental protection, more consumption scenarios will be created for the market through these emerging fields.

Third, it is to promote the high-quality development of service consumption. Fields such as luxury goods, fashion, cultural tourism, health, and education will usher in a new round of upgrades.

The supply of high-quality services and products will stimulate residents’ enthusiasm for consumption and activate consumption vitality from the supply side.

The wave of expanding domestic demand has already surged. The fashion and luxury goods industry should firmly seize the opportunities, comply with the policy orientation, actively innovate, meet consumers’ continuously upgrading needs, open up a broader development space in 2025, and contribute to China’s economic development.