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.