Digital technology reshapes China's service consumption landscape - 2026-08-10
From virtual reality (VR) and augmented reality (AR) experiences that bring museum collections closer to visitors, to AI-powered travel planning and personalized recommendations on e-commerce platforms, digital technologies are fundamentally reshaping how Chinese consumers discover and enjoy exciting new services.
In response to this wave of enthusiasm, the country's service consumption is evolving, becoming smarter and more dynamic than ever before.
In the first half of 2026, retail sales of services in China rose 5.3 percent year on year -- 4.2 percentage points faster than goods sales. Tourism, consulting and leasing services, and cultural, sports and leisure services all posted double-digit growth, according to data released by the National Bureau of Statistics.
In August 2024, China's State Council issued guidelines to promote high-quality development in service consumption, urging innovation to unlock the sector's internal momentum and cultivate new drivers of growth. Digital technology is now emerging as a key enabler in that effort.
AI, in particular, is becoming deeply woven into consumer spending on services. In June, the Ministry of Commerce and seven other government departments rolled out an implementation plan to accelerate "AI plus consumption," introducing 17 measures focused on three priorities: expanding smart product consumption, empowering services, and creating new consumption scenarios.
The performing arts market offers a compelling example. In 2025, China's large-scale commercial performances generated over 30 billion yuan (4.42 billion U.S. dollars) in box-office revenue and spurred more than 220 billion yuan in related cultural and tourism spending, according to data from China Association of Performing Arts. That booming demand calls for richer and more targeted services.
At the recent 2026 Haihe International Consumption Forum, Luo Zhao, general manager of Rhythm Beat Technology Co., Ltd., demonstrated how AI can act as a "smart agent" for cultural tourism consumption. By entering simple preferences, such as performance type, departure city, and length of stay, users can receive a complete itinerary in seconds, including ticket selection, hotel and flight recommendations, transport to the venue, and city sightseeing suggestions.
In China, consumers can already plan trips easily through various mobile apps. Yet friction points remain: choosing a well-located hotel, ensuring smooth transfers between bookings, and finding reasonably priced restaurants near tourist attractions.
That is where AI is starting to make a difference. "With so many service options available, consumers need tailored solutions to make better decisions," said Luo. "If the performing arts market is a feast, we are providing the chopsticks that bring the dishes directly to diners."
Beyond improving individual experiences, digital tools are also transforming how service providers interpret market demand. Data generated through digital platforms is making previously invisible consumer preferences measurable, comparable, and traceable.
Meituan, a major local services platform, offers a clear case in point. Zhang Lin, president of the Meituan Research Institute, said platform data shows that online consumption among people over 50 is growing rapidly, and their share of bookings for four-star and above hotels is significantly above average.
These insights are shining a spotlight on the spending power and willingness to spend that middle-aged and older consumers have long been overlooked for.
Liu Xiaolong, global partner at Kearney, said Chinese consumers are moving from "buying useful products" to "buying what they like." This shift, he noted, requires service providers to strengthen their ability to understand consumers, craft engaging scenarios, and build communities. Digital technologies are helping them do just that.
"Traditional market research methods are increasingly falling short in capturing real consumer needs," Liu added. Trends on social media, from the pursuit of "emotional value" in lifestyle spending to the rising popularity of self-care purchases, often offer more accurate signals of emerging demand. "Emotions expressed on social media often point to demand more precisely," he said.
According to the Ministry of Commerce, online service consumption in China grew 22 percent in 2025. During the same period, online sales of sports event tickets, tourism products and dining services jumped 63.3 percent, 40.6 percent and 23.7 percent, respectively.
Many industry observers believe digital technologies are generating more diverse service offerings and fostering entirely new consumption scenarios. By shifting from standardized supply to personalized matching, and from complex decision-making to more targeted outreach, digital innovation is steadily driving the upgrade and expansion of China's service consumption.
Source: Xinhua
