Inside China’s Internet Marketing Transformation: Data, Disruption, and AI Era

Against a backdrop of resilient economic fundamentals, shifting consumer psychology, and a steadily maturing advertising ecosystem, China is establishing new standards for what digital marketing entails in the world’s largest internet economy. The insights and data presented throughout this article are sourced directly from iResearch’s comprehensive market analysis.

Economic Stability Anchored by Digital Growth

Despite external uncertainties in 2024, China’s economy demonstrated resilience. Quarterly GDP growth figures—5.3% in Q1, dipping to 4.6% in Q3 before recovering to 5.4% in Q4—highlight a stabilising trend bolstered by proactive fiscal stimulus and targeted consumer policies.

Beneath this surface, the digital economy is becoming the engine room of growth. From 2020 to 2024, China’s digital economy expanded from 39.2 trillion RMB to an estimated 57 trillion RMB—a nearly 46% increase in just four years. This rapid rise reflects not only improved internet penetration but also the deepening integration of digital tools in commerce, finance, health, education, and marketing.

Advertising Growth and Platform Recomposition

This digital boom has fuelled a steady expansion of China’s online advertising market. In 2023, the industry recorded a total revenue of 1.13 trillion RMB, with a forecast to reach 1.49 trillion RMB by 2026. Although growth has decelerated compared to earlier years (from a CAGR of 15.0% between 2019–2023 to 9.7% projected between 2023–2026), the sector remains dynamic and profitable.

A structural rebalancing is also underway across media types. E-commerce platforms and short video apps continue to dominate, with ad market shares of 36.3% and 26.5% respectively in 2023. This trend is set to persist, with short video advertising expected to capture nearly 29.1% of market share by 2026—underscoring how “content-commerce convergence” is replacing traditional linear ad funnels.

Digital Usage Patterns Reveal Content Priorities

China’s 1.1 billion netizens are not only more numerous but increasingly digitally fluent. Usage rates of various internet applications show strong engagement across communication (instant messaging: 97.6%), video (96.6%), and short video (93.8%). Meanwhile, e-commerce-related activities remain essential: online shopping usage stands at 87.9%, while digital payments hit 92.8%.

Notably, emerging services such as online literature, remote work, ride-hailing, and health apps—while still trailing in absolute user numbers—are quickly maturing. This diversity in digital behaviours provides marketers with a broader canvas for targeted, scenario-driven storytelling and product integration.

Consumers: Rational Mindset, Emotional Desires

Chinese consumers in 2025 are marked by a blend of pragmatism and emotional sophistication. Despite macroeconomic optimism, 48.6% of surveyed individuals say they plan to reduce spending. However, among those maintaining or increasing expenditures, key areas of growth include consumer electronics (37.6%), leisure and entertainment (36.5%), health and wellness (32.5%), and education (29.6%).

This duality—budget consciousness paired with emotional aspiration—demands a shift in marketing philosophy. Brands are no longer judged solely on function or price, but also on how well they support emotional well-being, self-expression, and quality-of-life improvement.

What Makes Ads Work in 2025?

Consumers are increasingly selective in the advertising they engage with. According to survey data:

• 49.0% are drawn to ads that deliver useful information such as product details or offers.

• 46.5% respond positively when ads align with their current needs or interests.

• 34.9% appreciate creativity and novelty, while 31.4% value content that matches their hobbies or aesthetic preferences.

• Ads that include peer reviews and real-user feedback also rank highly (30.2%).

These findings suggest that attention is earned, not bought. Relevance, utility, and entertainment value are key to success—marking a decisive shift from the “interruptive” to the “invited” marketing model.

AI, Content, and Emotional Resonance: The New Marketing Trifecta

AI has moved from the backend to the forefront of consumer engagement. In 2024, generative AI and digital humans became widespread tools in marketing—automating copy, delivering personalisation at scale, and enabling interactive experiences like virtual try-ons or AI-assisted shopping advisors. More than 88% of AI-aware consumers reported using such tools to inform purchase decisions.

Content formats are also evolving. Micro-drama (short-form branded video series) now reaches 660 million users and accounts for 90% of brand-driven productions. These story-rich, platform-native narratives are helping brands cultivate emotional depth and brand affinity in an era where consumer loyalty is increasingly fragile.

Conclusion

China’s digital marketing landscape is rapidly evolving—underpinned by economic resilience, empowered by intelligent technologies, and increasingly shaped by emotional connection. For global brands, success demands more than scale. It requires cultural relevance, data-led precision, and a deep understanding of shifting consumer values.

At China Trading Desk, we help brands navigate this complexity with confidence. As a specialist digital marketing and advertising agency focused on China, we turn insight into measurable impact. Get in touch to elevate your China strategy.