Tea chains have embraced ice-cream-infused milk teas, driving a wave of viral pairings thanks to the country's rapidly growing freshly made tea beverage industry. Ice cream has become a high-margin ingredient in tea shops, and brands are integrating ice cream stock keeping units into new beverage formats.

Meanwhile, China's retail landscape for ice cream is undergoing its fastest transformation in a decade.

Kantar data show that convenience stores and instant retail shops remain the two largest channels, accounting for 30.5 percent and 42.4 percent of category sales, respectively, both maintaining growth momentum.

NielsenIQ estimates that snack stores now exceed 100,000 outlets nationwide, contributing 5 percent of ice cream category sales, while instant retail — powered by front warehouses and store-warehouse integration — has become one of the industry's key growth engines.

TMICC continues to benefit from its extensive distribution network, while Nestle is investing to shorten the distance between brand and consumer.

Marketing intensity is rising alongside channel competition. Nestle deployed a series of campaigns in 2025, including music-driven promotions and sponsorship of the 2025 football tournament in Jiangsu province. The activations generated an estimated 880 million online and offline impressions and helped drive double-digit sales growth in East China.

Executives said the sector is entering a more fragmented, innovation-driven phase where understanding young consumers and adapting quickly to shifting channels will determine who wins.

"The Chinese market is large enough for many brands," Xu of Nestle said. "We will refine our positioning, focus on what we do best, and deepen engagement with young consumers while working closely with our distributor partners to grow together."