China M&A trends of consumer market industry: 2022 review and 2023 outlook - Gearing for expected recovery in 2023
June 2023
Investment and M&A activities in the China consumer market continued to struggle in 2022. In terms of deal volume, 1,064 deals were completed in the consumer industry in 2022, down by 177 compared with that of 2021, albeit higher than deal volume in 2020. Announced deal value plunged 61% in 2022 to $27.7 billion. As the market cooled down, deals of angel seed rounds and A rounds decreased and the average deal size fell significantly. However, with the gradual recovery of the consumer market, we expect consumer market M&A activities to rebound.
From a sector point of view, the Food and Beverage sector has strengthened its position as the most attractive M&A sector, recording 377 M&A deal volumes in 2022. In contrast, the Apparel & Beauty sector witnessed a nearly 50% drop in deal volume from that in 2021 amid industry consolidation trends. On the other hand, Household Durables, Travel & Leisure and Household Essentials sectors saw a decrease in general with only a handful of hotspot such as smart small home appliances, tourism sector and consumer electronics, whereas the General Retail sector reported an upward trend in M&A deal numbers, as sector consolidation continued.
“Following the short-term pain during the peak of the epidemic at the end of 2022, we noticed a full rebound of the consumer market with the growth of consumption during the Spring Festival and the increase in cinema ticket revenue. Driven by policies to promote consumption and stabilise growth post-pandemic, the consumer market is expected to achieve long-term sustainable growth. With Generation-Z, whose pursuit of diversity, individuality and personalized consumption, gaining importance in the China consumer market, as well as the emergence of the grey-hair economy, investors’ interest in the China consumer market is coming back. We are optimistic about the growth momentum in in China’s consumer industry in the post-pandemic era.”
Contact us
Mainland China and Hong Kong Managing Partner - Deals, PwC China
Tel: +[86] (10) 6533 2199, +[852] 2289 2199
