Xianyu’s Cultural Renaissance: What Foreign Brands can learn from it

As China’s economy continues to evolve and consumer trends shift, digital platforms are emerging as key battlegrounds for capturing the hearts - and wallets - of the nation’s youth. Xianyu, originally known as a second‑hand marketplace, has transformed into a vibrant hub where side hustles, innovative consumption, and youth culture converge. With around 178 million monthly active users - almost half of whom are under 30 - Xianyu’s metamorphosis offers foreign brands a unique opportunity to align with a dynamic, ever-evolving market, otherwise known as the “Xianyu economy.”

A Platform Transformed

Traditionally, Xianyu was synonymous with the trade of pre-owned goods—a digital garage sale where items found new household goods at bargain prices. However, recent trends have reshaped the platform’s identity. In early 2025, during the DeepSeek AI boom, astute young entrepreneurs on Xianyu quickly capitalized on a new trend by selling commands to use for a “human–machine romance.” These AI-related services allowed users to “train” their AI companions to exhibit various traits, demonstrating how swiftly Xianyu adapts to emerging tech trends. This follows earlier services sold on Xianyu with other AI services such as GPT‑4 and Midjourney, where complementary side gigs - ranging from AI-generated images to exclusive website memberships - flourished on the platform.

Youth-Driven Consumption and the “Earned Value” Mentality

One of the most remarkable aspects of Xianyu’s evolution is the emergence of what many young consumers refer to as an “earned value” mentality. For many of China’s youth, saving money isn’t just a matter of frugality; it’s a statement of savvy financial management - a sport to some degree. Whether it’s buying a half-price gym membership or snagging discounted digital gadgets, every successful transaction reinforces a sense of achievement. In this ecosystem, every purchase or sale becomes a testament to a consumer’s ability to outsmart the traditional pricing system.

In 2024 nearly 9.5 million sellers utilized Xianyu to offer various skill-based side hustles, with post-00s (those born after 2000) making up around 41% of these entrepreneurs. They reported earning ¥3,660 ($505) on average per month. Such figures highlight not only the platform’s popularity among China’s digitally native youth but also how it has fostered a culture where clever transactions are celebrated as significant wins.

A Cultural Laboratory for Gen Z

Beyond the numbers, Xianyu has morphed into a cultural laboratory - an experimental space where young people reshape traditional commerce into something uniquely their own. The platform now hosts a diverse range of offerings: from quirky services like Lego assembly assistance and personalized relationship advice to niche hobbies such as cosplay outfit rentals and even “pig-walking” services. This melting pot of creative side hustles reflects the entrepreneurial spirit of China’s Gen Zers, who are as comfortable blending digital innovation with cultural expression as they are navigating the traditional marketplace.

Xianyu’s environment is characterized by what some analysts describe as “emotional market pricing.” In this new system, products and services are valued not just on their inherent utility but also on the cultural and emotional resonance they create. For instance, limited-edition merchandise linked to popular IPs - like collectibles inspired by the blockbuster Ne Zha 2 - can command prices far above their standard market value due to the emotional connection they forge with young consumers. This phenomenon underscores a fundamental shift in consumer behaviour, where the emotional and cultural significance of an item can outweigh its traditional economic value.

Implications for Foreign Brands

For foreign brands looking to penetrate the Chinese market, the transformation of Xianyu offers several key lessons. First and foremost, brands need to embrace the dynamic and fast-evolving nature of Chinese youth culture. This means going beyond conventional marketing strategies and aligning with the innovative, trend-driven ethos that characterizes platforms like Xianyu.

1. Cultural Alignment and Local Relevance:
   Foreign brands must tailor their offerings to resonate with local cultural values and the unique consumption patterns of Chinese youth. Many foreign brands have found success by collaborating with local influencers, engaging in co-branding efforts with popular IPs, and launching limited-edition products to help tap into the emotional and cultural cachet that drives Xianyu’s marketplace.

2. Embracing the “Earned Value” Mindset:
   The concept of “earned value” suggests that consumers in China are not merely price-sensitive but also value the satisfaction derived from savvy purchasing decisions. Foreign brands can capitalize on this by developing marketing campaigns that empower consumers to feel smart about their choices. For example, emphasizing transparency in pricing, offering exclusive deals, or showcasing behind-the-scenes stories can create a sense of trust and accomplishment among consumers.

3. Leveraging Digital Innovation:
   Xianyu’s rapid adoption of new technologies - demonstrated by the swift emergence of AI-related side hustles - is further reinforcement of how Chinese youth take to digital innovation. Foreign brands should incorporate AI-driven initiatives into their marketing strategy for example - Chinese consumers are already very accepting of it.

4. Community and Experience Over Ownership:
   The evolving consumption habits on Xianyu highlight a broader cultural shift where “usage rights” and shared experiences are gaining traction as an alternative to traditional ownership. Foreign brands can benefit from this trend by exploring models that emphasize service, rental, or subscription-based offerings rather than one-time purchases. This approach not only meets the current demand for flexibility but also builds long-term engagement with younger consumers.

Conclusion

Xianyu’s transformation from a second-hand trading platform to a cultural hub represents a significant shift in the Chinese consumer landscape. With its 178 million monthly active users - predominantly young, digitally savvy individuals - the platform has redefined what it means to “make money” and “save money” in today’s fast-paced market. For foreign brands, this evolution is both a challenge and an opportunity. By understanding and integrating the values of youth culture, leveraging digital innovations, and aligning with the “earned value” mentality, international brands can create strategies that not only resonate with Chinese consumers but also position themselves as leaders in a rapidly evolving market.

In a market where culture, commerce, and creativity intersect, Xianyu signals what the future of retail might look like - dynamic, inclusive, and driven by a generation that refuses to be confined by tradition. For brands willing to adapt and innovate, this vibrant ecosystem offers a promising gateway into the heart of China’s youth culture.