BEIJING, March 31 (Xinhua) -- As China's Gen Z emerges as a new leading consumer group, it is also driving manufacturers towards a shift that reflects both emotional needs and rising cultural confidence.

One of the dominant trends is Guochao, which literally means "national trend," referring to domestically created designs, often inspired by traditional Chinese culture, that can be applied to toys, decorations, apparel, everyday items, and even food and beverages.

The surge is particularly evident in the booming collectible toy market. In 2025, China's domestic retail sales of trendy and collectible toys had totaled 67.69 billion yuan (about 9.78 billion U.S. dollars), up 45.4 percent from the previous year, according to the 2026 China Toy and Juvenile Products Industry Development Report released last week.

Another report released by iiMedia Research projects that the Guochao market will exceed 3 trillion yuan by 2028.

"Consumers today want more emotional resonance and cultural identity in their spending," said Xiong Haifeng, an associate professor at the School of Cultural Industries Management, Communication University of China, located in Beijing.

This is why manufacturers are incorporating stronger cultural elements into their products, he explained, rather than the "made-in-China" products featuring little added value of past decades.

A survey of key toy retail outlets in China's first-tier and emerging first-tier cities found that 24.4 percent of respondents said trendy and collectible toys were the fastest-growing category in terms of sales, the aforementioned toy industry development report revealed.

To win their market share, manufacturers are responding with faster innovation cycles and stronger design capabilities. In Yiwu, the global small commodity wholesale hub in east China's Zhejiang Province, local manufacturers have invested more in design as part of their business strategies.

Lu Yi, general manager of a local accessory manufacturing company, said his team designs around 100 bag charm products each month. These decorative items, now commonly seen on young people's bags, have become both a fashion trend among Gen Z and a notable segment in the collectible market.

In return, the company's bag charm sales are now growing at an average rate of 20 percent per month, with sales doubling during peak seasons.

Manufacturers' efforts to meet strong market demand have further encouraged improvements in quality and efficiency across the industrial chain, promoting transformation and upgrading of the industry, said Dang Qiong, associate professor at the School of Journalism and Communication of Guangxi University in south China.

At the same time, companies are increasingly tapping into the booming Guochao IP through collaborations and spin-off products, extending their reach in terms of both markets and culture.

Domestic animated films have emerged as key carriers of such IP. Last year, the Chinese animated blockbuster "Nobody" launched more than 800 derivative products, driving its total consumer sales to over 2.5 billion yuan.

Data from the China Film Administration reveals that in 2025, every yuan spent on movie tickets in China was estimated to have generated roughly 15.77 yuan in related economic activity across sectors such as cultural and creative industries, catering and tourism.

Museums are also joining the trend. The Chengdu Museum in southwest China's Sichuan Province has collaborated with popular IPs to promote its prized collections to young people. For example, the museum has reimagined a Han Dynasty (202 B.C.-220 A.D.) figurine as Fat Tiger, a popular cartoon character that is familiar to people through a series of WeChat stickers, and developed several derivative products such as posters, reinterpreted illustrations of relics and short dramas.

Integrating Guochao IP across culture, commerce and tourism can build sustainable consumption and help the trend evolve from a short-lived fad into lasting popularity, said Xu Chao, head of the cultural and creative IP committee of the China Advertising Association.

GROWING CULTURAL CONFIDENCE

Observers believe that what lies behind Gen Z's Guochao consumption wave is the desire to express cultural identity and pride in traditional Chinese culture, as their spending increasingly expands beyond functional needs.

By supporting domestic brands, choosing traditional handicrafts and favoring local designs, the younger generation is offering a tangible answer to the question of who they are in a globalized context.

This shift is especially visible in the fashion industry. Once a niche segment, Guochao apparel, which incorporates traditional motifs into modern design, has gained broader public recognition through promotion efforts by young consumers, who see wearing Guochao as a new type of fashion.

"Consumer demand for Guochao apparel is shifting from trend-chasing to cultural identity," said Xie Fangming, full-time vice chairman of the China Fashion Association.

At major fashion events, including the recent 2026 China International Fashion Week (Spring) held in Beijing, designers are showcasing collections that highlight a distinctly Chinese aesthetic, drawing on intangible cultural heritage and regional traditions.

Sun Ruizhe, head of the China National Textile and Apparel Council, said the trend is driving the rapid emergence of more differentiated and culturally distinctive fashion products.