Beyond China’s Price Wars, Value Beats Price

In China’s hyper-competitive consumer market, price wars are no longer isolated incidents—they are now business as usual.

In the electric vehicle sector, BYD made waves early this year by launching 21 “smart driving” models with enhanced autonomous features, all at original price points. This forced peers to either slash prices or accelerate tech innovation. More recently, Xiaomi shook the market with its YU7 electric sedan, priced from just RMB 253,500. Within an hour, pre-orders topped 289,000 units, compelling competitors like Avatr 阿维塔 and Luxeed 智界 to initiate their own markdowns.

Meanwhile, food delivery platforms are waging a subsidy-fueled battle of their own: RMB 2.80 coffee, milk tea for one cent, and coupons worth RMB 30 have become common lures for customer retention. While consumers cheer the deals, merchants struggle to survive razor-thin margins.

🤔Price vs. Value: Can Brands Escape the Vicious Cycle?

These phenomena raise important questions: Is sacrificing profit for market share a sustainable strategy? And as consumers become addicted to ever-lower prices, how can brands differentiate themselves beyond cost-cutting?

At Double V Consulting, we believe that understanding the logic behind these price wars, and identifying pathways toward long-term brand value are essential. Interestingly, both low-frequency, high-ticket products like EVs and high-frequency, low-ticket items like bubble tea are caught in similar cycles of price-driven competition. This reveals several underlying dynamics in China’s consumer economy:

🔵Overcapacity on the supply side pushes brands to cut prices in order to offload inventory and capture market share.

🔵Aggressive growth expectations from factories to marketing teams mean that when sales slow, discounts become the default lever.

🔵Price sensitivity among consumers makes discounts the fastest way to trigger purchases.

🔵Industry structures led by dominant players force smaller brands to follow suit or perish. Large companies weaponize their economies of scale to edge out weaker competitors.

But in the long run, price wars rarely produce sustainable winners. Victory belongs to brands that create unique, irreplaceable value whether through innovation, emotional resonance, or cultural capital.

Pop Mart: Winning in a Downturn with Emotion-Driven Consumption

Take Pop Mart as an example. In an era of consumer “downgrading,” the company turned its intellectual property (IP) strategy into a business miracle.

Pop Mart’s signature character LABUBU, part of its THE MONSTERS collection, has become a global phenomenon. In Spring 2025, a mint green limited edition LABUBU fetched RMB 1.08 million at auction. In 2024 alone, the IP generated RMB 3.04 billion in revenue, a 726.6% YoY increase, and contributed to a 375.2% surge in international sales.

What’s behind this success?

🔵From functional to emotional consumption: Pop Mart tapped into Gen Z’s emotional needs—offering not just collectibles but meaningful companionship.

🔵Products as social currency: For young consumers, blind boxes became tools for self-expression and social bonding, not just toys.

This reinforces a key insight for all consumer brands: in an age of tiered consumption, price is not the only battlefield. Emotional resonance and cultural identification are increasingly redefining how value is created.

For deeper analysis of Pop Mart’s IP strategy, see our previous articles:

Designer Toys in China: IP & Emotion

DJI: Building a Global Moat with Innovation and Identity

While price wars rage in China’s consumer electronics sector, DJI maintains high price points and even higher brand loyalty. It commands over 70% of the global drone market, yet faces minimal pricing pressure. The reason? A powerful combination of technical innovation, supply chain control, and emotional marketing.

Core Technologies as a Barrier

DJI’s proprietary SuperX flight control chips offer centimeter-level accuracy. Paired with the globally popular DJI Fly App, features like AR route planning and smart tracking make drones accessible to amateurs. The company has also built a worldwide service network with repair centers in North America, the Netherlands, and DJI Care replacement services.

This full-stack ecosystem including hardware, software, and services keeps DJI ahead of the curve.

Supply Chain Mastery

DJI has achieved 85% vertical integration, manufacturing critical components like visual modules and flight chips in its own Dongguan factories. This not only ensures quality control but also shields the company from global supply chain disruptions. Such advantages allow DJI to retain pricing power without engaging in discount wars, while simultaneously compressing the margins of competitors.

Pocket 3: The “Moutai of Vlogging” and a Masterclass in Emotional Branding

DJI’s strategic thinking is also evident in the Pocket 3, a compact camera that marked a stunning brand transformation. Once seen as a “tech brand for men,” DJI captured the attention of China’s trend-savvy female consumers, positioning Pocket 3 as the ultimate lifestyle Vlog tool.

Demand far outstripped supply, and the product earned the nickname “electronic Moutai” — a high-status, hard-to-get item. On Xiaohongshu (RED), the hashtag #DJIPocket3 reached 1.27 billion views, with over 930,000 related posts.

Why did it work?

🔵Smart product positioning: The Pocket 3 filled a gap in the “light-professional” market, offering better stabilization than smartphones and easier operation than DSLRs.

🔵 Emotional aspiration: More than a camera, it became a symbol of “effortless beauty” and self-expression. Even consumers unsure of what to film wanted to own one, because owning it felt like living well.

Previously dominated by tech enthusiasts and outdoor adventurers, DJI’s consumer base is now expanding into the world of “Xiaohongshu girls” — a demographic shift that brought not only sales growth but also brand reinvention. Importantly, this success was not driven by discounts, but by innovation and a deep understanding of emerging consumer identities.

DoubleV Insights: Rethinking Competitive Strategy in China

🔵 Avoid the race to the bottom.

Short-term discounts can boost sales, but over time they erode brand value. Frequent price cuts can lead consumers to associate your brand with “cheap,” limiting future pricing power and squeezing profit margins needed for R&D.

🔵 Adopt a long-term mindset.

Building a strong brand takes time. Pop Mart, often labeled a “new consumer brand,” was founded in 2010. DJI launched in 2006. Sustainable success comes from long-term investments in brand equity, not quick wins.

🔵 Create emotional resonance and identity.

Brands with pricing power are those that consumers buy into, not just buy. Whether it’s Pop Mart’s blind boxes as symbols of Gen Z social status or DJI’s Pocket 3 as a ticket to a curated lifestyle, great brands make identity part of the product.

Double V Consulting is a marketing consultancy specialized in female consumer goods brands. We have been helping overseas brands navigate the complexities of the Chinese market since 2017. We specialize in creating strategies that resonate with Chinese female consumers, leveraging deep market insights and cultural understanding.

If you're interested in learning more about how we can assist your brand in understanding and connecting with Chinese consumers, don't hesitate to reach out by click the "Contact" link.