In a world where artificial intelligence (AI) is rapidly transforming industries, an unexpected trend is emerging in China: the rise of the experience economy. This shift is not just about technology, but about how humans connect and engage with each other and the businesses that serve them.
The AI-Experience Nexus
Annabelle Yu Long, a venture capitalist at BAI Capital, believes that AI's impact on human interaction is an "unintended consequence" with profound implications. She argues that now is the time to invest in consumer trends focused on offline experiences, a bold move in a world where online presence often takes center stage.
Investing in the Human Experience
BAI Capital's latest fund-raising effort, a rare U.S. dollar-denominated venture in China, reflects a unique strategy. Long seeks investments in regulation-neutral, consumer-facing, and market-oriented companies. She believes that not all technology needs to be "nerdy" or cutting-edge; sometimes, the next big thing could be the next TikTok or a Chinese version of Nintendo.
A Shift in Consumer Behavior
China's consumer market, with its hundreds of millions of potential customers, has long been a focus for global investors. However, post-pandemic spending has been sluggish, with money flowing into AI, chips, and hardware instead. To stimulate spending, China launched a trade-in subsidy program in 2024, encouraging consumers to upgrade their goods. Local authorities are also experimenting with initiatives to boost spending, including revamping traditional shopping districts like Wangfujing in Beijing with virtual reality experiences and collaborations with online drama platforms like iQiyi.
Policy Support for Experience-Focused Consumption
Chinese policymakers have made their stance clear: over the next five years, they will support experience-focused consumption in areas like the performing arts and sports. This policy direction aligns with the belief that consumers will increasingly seek genuine offline social connections as AI content becomes more homogeneous.
The Future of Entertainment
Belgium's Tomorrowland electronic music festival, in partnership with Hero Esports and INS Land, made its China debut in Shanghai last year. Dino Ying, founder of Hero Esports, believes that as AI content becomes more prevalent, people will crave face-to-face interaction. This belief is intriguing, especially considering Hero Esports' involvement in China's premium video game Black Myth: Wukong, which was an overnight success.
The Evolution of Entertainment Venues
Hero Esports is moving quickly to capitalize on this trend. Initial conversations about Tomorrowland's China expansion began in early 2025, and by November, the first festival was a reality. Ying's INS Land complex also operates a nightclub and other entertainment venues year-round. The future of these venues is intriguing; Long predicts that ticket prices, currently around $30-$44, could increase tenfold, as the offline experience of "smelling the sweat and dancing with real people" becomes a luxury.
Conclusion
The rise of the experience economy in China is an intriguing development, especially as it contrasts with the global focus on AI and technology. It raises questions about the future of human connection and the role of offline experiences in a world increasingly dominated by digital interactions. As an observer, I find myself wondering: In a world where AI can create almost anything, will the ultimate luxury be the simple, genuine connection between real people?
