Guoxin Securities: Product-driven superposition regulation and innovation, new quality consumption highlights growth resilience

The Zhitong Finance App learned that Guoxin Securities released a research report saying that from January to May 2025, the total retail sales of social consumer goods reached 20.32 trillion yuan, an increase of 5.0% over the previous year. Among them, new consumer circuits such as gold jewelry (+12.3%), pets, and trendy games performed brilliantly. In the second half of the year, it is recommended to focus on two major directions: one is product innovation (such as AI toys and AI glasses) and retail efficiency improvement enabled by AI technology; the other is a brand premium strategy driven by IP emotional value. At the same time, the implementation of policy-side livelihood protection measures and progress in trade negotiations will provide support for the consumer market.

Guoxin Securities's main views are as follows:

Consumption review for the first half of 2025

Total retail sales of social consumer goods from January to May 2025 were 20.32 trillion yuan, +5.0% year-on-year. Overall commodity consumption continued its steady growth trend, and consumption capacity and consumer confidence were boosted by multi-dimensional policies. By category, the cosmetics company increased by 4.1% in January-May, and still showed the characteristics of weak individual stocks in the industry; Gold and Jewelry had a zero increase of 12.3% in January-May, of which it climbed to more than 20% in April-May. In terms of the impact of a low base in the same period last year, it also benefited from continued high gold prices and improved product design, which boosted both value preservation and self-satisfaction. Overall, there were certain structural highlights in consumption in the first half of 2025. In particular, in racetracks such as pets, trendy games, personal care, and jewelry, new consumer leaders with insight into the needs of new consumers and achieved product innovation and upgrading through this, they bucked the trend and performed brilliantly.

Outlook for the second half of the year 1, endogenous product innovation

1) AI+ commerce, creating product premiums through practical technological innovation: the application of AI technology may bring new opportunities for enterprise product innovation. Therefore, in terms of the increase in new products such as AI toys and AI glasses, as well as AI empowering e-commerce retail efficiency, there are continuous layout opportunities; 2) IP+ commerce, achieving product premiums by attaching emotional value: in the current context of relative social and economic pressure but increasingly rich consumer demand levels, emotional value using IP etc. as a carrier has become one of the few ways for brands to obtain pricing power, and is also an important gripper for new consumer brands such as trendy games, beauty, and jewelry to break through the stock market.

Outlook for the second half of the year 2, policy extension and catalysing

1) In the domestic demand market, domestic policies have placed increasing emphasis on consumption since last year, and they are being gradually refined and implemented. Follow-up implementation of a series of livelihood security policies, such as childcare, employment, and old-age care, will also further release the spending power of the people concerned. Furthermore, the enterprise side is also actively using policy capital tools to open up a new growth curve. 2) In the external market, focus on the progress of tariff trade policies. The impact of the short-term market is gradually being absorbed, and the advancement of trade negotiations has also provided a buffer period for enterprises to adjust their business. High-quality overseas enterprises are expected to promote market diversification and product differentiation to enhance long-term operating capabilities.

Risk warning: Demand for terminal consumption falls short of expectations, increased competition affects corporate profitability, changes and adjustments in enterprise management damage operating capacity, and increased goodwill due to poor management after mergers and acquisitions.