David He (Managing Partner, BA Capital)
China’s vast market of 1.4 billion people and a $5 trillion economy provides the foundation for innovation. Strong supply chains, payment systems, logistics, and e-commerce infrastructures further enable growth. As Chinese companies like Pop Mart and UR expand internationally, China’s economic scale drives outbound opportunities.
Technology, efficiency, and content are the driving forces behind the structural transformation of the consumer sector.
In terms of technology, advanced manufacturing and intelligent technologies—such as algorithms and visual recognition—will inevitably be applied to the consumer space, ultimately driving industry-wide transformation. For example, the development of the chemical industry gave rise to skincare products, and synthetic biology from companies like Giant Biogene is expected to further revolutionize the skincare segment.
Efficiency has three key dimensions: supply chain efficiency, channel efficiency, and operational efficiency. Upgrading the supply chain helps companies better handle raw materials such as beef. Channel upgrades allow for more cost-effective and convenient customer acquisition, optimizing the cost structure. Yuanji Yun Jiao is a representative example—they have spent over a decade refining each operational link, achieving cost optimization, improved labor efficiency, and innovation in their business model.
On the content front, BA Capital focuses on trends such as IP-driven consumption, experiential consumption, and the opportunities arising from Chinese consumers’ growing sense of national pride. As the economy grows, cultural confidence among Chinese consumers is bound to rise in parallel.
As long as society continues to progress, consumption will not downgrade.
It is a misconception to view consumers becoming more selective, preferring high-quality yet affordable products, or spending less in certain areas as signs of consumption downgrade. On the contrary, the values underlying consumer behavior are continuously evolving—people are placing greater emphasis on quality and lifestyle, and on products aligned with their worldview and values. These elements are increasingly integrated into the consumption experience.
The Chinese market is large enough and filled with opportunities; the key lies in identifying the right entry point. Going forward, BA Capital will continue to invest in companies that genuinely create value for users and will firmly support entrepreneurs.