Northeast Securities: Millet economy benefits, spiritual consumption rises, supply and demand sides work hard to open up room for long-term growth

The Zhitong Finance App learned that Northeast Securities released a research report saying that due to multiple factors on the demand side and the supply side, the market size of China's millet economy continues to grow rapidly. In 2017-2024, the size of China's pan-quadratic and surrounding markets increased year by year from 221.2 billion yuan to 597.7 billion yuan, with a CAGR of 15.26%. Among derivative products, millet has gradually become mainstream. In 2017-2024, the market size of millet in China grew from 53.7 billion yuan to 168.9 billion yuan year by year, with a CAGR of 17.79%. The resonance of multiple factors on the demand side and the supply side may be an important reason for the rapid development of the millet economy in an environment where overall demand is weak.

The main views of Northeast Securities are as follows:

Demand side: user base+consumer concept+social attributes+high sticky+sinking market, cultivating long-term development space for millet economy

After the bubble economy collapsed in the early 1990s, Japan entered the “lost 30 years,” and retail sales growth declined. However, from 2002 to 2020, the rise of spiritual consumption and changes in consumer attitudes caused the market size of the general animation industry in Japan to grow from 1097 billion yen to 2420 billion yen, with a CAGR of 4.49%; the market size of animation derivatives increased from 435 billion yen to 581.9 billion yen, a CAGR of 1.63%; and the share of cultural and entertainment consumption expenditure for families of two or more remained above 10%. In comparison with Japan, the rise in spiritual consumption is expected to drive the Chinese residents' per capita consumption expenditure on culture and entertainment to continue to grow, and the millet economy is expected to benefit from it in the long term.

(1) China's pan-two-dimensional user base is huge. In 2024, the number of Chinese users reached 503 million, and their desire to buy millet is strong and put into action, continuing to open up the millet economy market space. (2) Millet is favored by young people. Nearly 70% of millet product consumers are under 30 years old. Young people's consumption attitudes have changed, and the millet economy is expected to become an important export for them to unleash their consumption potential. (3) The millet economy has social attributes. Only 26.4% of consumers buy millet and choose to enjoy it alone. Social fission has further expanded the millet audience. (4) Millet has the characteristics of low single consumption and high consumption frequency. The average single purchase amount of Chinese consumers in 2025Q1 was 102 yuan, and the average number of times they purchased millet products per month increased to 2.9 times. Strong consumer stickiness is expected to provide strong support for the continued development of the millet economy. (5) Currently, the proportion of millet consumers in China's high-tier cities exceeds 80%. It is estimated that in 2023-2028, the GDPCAGR in low-tier cities will be 6.1%, the highest growth rate in the country; social zero CAGR is 7.4%, which is close to the national average growth rate. The price advantage of millet products can support them to explore a sinking market.

Supply side: IP production and product sales have improved significantly, and there is still room for continuous optimization in IP licensing and IP operation

(1) In 2025Q1, domestic game IPs “Love and Deep Space” and “The Fifth Personality” reached the top of the IP sales list in the Valley Circle. The trading volume of the leisure fishing platform Gugu surpassed Hiya, and high-quality domestic IPs are expected to continue to stimulate consumers' desire to buy Millet.

(2) China's licensing funds and retail sales of Chinese authorized products continue to grow. China's IP licensing system is not yet perfect but is gradually improving, providing strong support for millet's economic development.

(3) There is a time gap between the current development pace of derivatives such as millet in China and the pace of content broadcasting, causing products to be out of stock or slow to sell. We should draw on the Japan Production Committee model and continue to explore to fully explore the commercial value of IP.

(4) The construction of channels such as online, offline, and second-hand trading platforms is becoming more and more perfect to improve consumer reach, and the millet economy is expected to continue to expand.

(5) Japanese companies such as Bandai Namco continue to operate in China, adding vitality to China's millet economy.

Risk warning: Weak consumer market demand due to weakening macroeconomics; pan-two-dimensional users tend to be saturated; market development in third-tier and below cities falls short of expectations; market competition is fierce due to the proliferation of IP licensing; and insufficient IP operation capacity.