Retailers in China are increasingly focused on differentiation through developing private brands. In 2025, the penetration rate of private labels reached 56.8 percent, an increase of more than 11 percentage points compared to the previous year, said Worldpanel. This trend is particularly evident in smaller cities, where demand for private labels has surged, outpacing growth in larger urban markets.

Freshippo, owned by Alibaba, has been expanding aggressively with a dual-format strategy combining traditional supermarkets with the innovative Freshippo NB model. In 2025, Freshippo achieved a penetration rate of 12.9 percent, Worldpanel said.

Meanwhile, JD.com's 7Fresh supermarket chain continues to expand its footprint in North China through a hybrid model, which combines physical retail locations with the convenience of local warehouse centers. This model enabled the retailer to extend its reach and increase its market penetration by 0.7 percentage point in 2025.

Discount formats also remain a favored choice for consumers. The latest Worldpanel report said that penetration rates for bulk snack stores and discount shops increased by 4.8 and 2.9 percentage points, respectively, in 2025.

Aldi, for instance, has ramped up its expansion efforts in the Yangtze River Delta, with its penetration rate in East China increasing by 2.2 percentage points. The German retailer plans to open 100 stores in China by the end of the first quarter of 2026.

Looking ahead, it is expected that the expansion of the consumer base will serve as a critical engine for growth. Moreover, the focus on "products" has shifted from large-scale displays to demand adaptation. Retailers are building exclusive advantages by developing their private labels. On the other hand, brands need to create product portfolios tailored to specific scenarios.

"Channels are no longer merely carriers for shelf display, but have become key hubs connecting consumers and products," said Worldpanel, adding that food and beverage categories led the growth, with annual sales increasing by 3.6 percent and 3.1 percent, respectively. In 2025, the household cleaning and personal care categories both achieved growth, while dairy products faced dual pressures in terms of both sales and volume growth.

French food and beverage producer Danone posted strong momentum in China, North Asia and Oceania in the fourth quarter, with sales up 10.4 percent like-for-like. Specialized nutrition continued to grow strongly, equally driven by infant milk formula and medical nutrition. The company also had a solid performance in its water business in China last year.