China’s death care economy faces the brunt of slowdown

China’s biggest cemetery operator, Fu Shou Yuan, has reported its first loss in a decade, becoming the latest industry facing a consumer spending slowdown in the country.

In the first six months of 2025, the Shanghai-based funeral service provider recorded a net loss of 261 million yuan, a first since 2010, the company’s interim results showed last week.

Total revenue dropped by 44.5 per cent to 610.9 million yuan. Revenue from burial services, mainly from the sale of burial plots, declined by 47 per cent to 477 million yuan, while funeral services saw a 34 per cent decrease, falling to 122 million yuan.

What’s the reason behind the loss?

The company has blamed external factors affecting consumer demand at home for its record losses this year. In its report, Fu Shou Yuan said, “In this economic environment, customers seem to be more cautious in their spending on death care services, while competition within the industry has shown signs of intensifying.”

Despite a rapidly ageing population in China, the company, often dubbed “Moutai of funeral services”, has faced an economic slowdown, a property downturn and uncertain employment prospects, which have led to its downfall.

In recent years, the country has encouraged environmentally friendly and cost-effective burial options by offering subsidies for green practices, such as scattering ashes at sea or on flower beds. Public data shows that nearly 200,000 people chose sea burials in the past five years.

The company’s rise

Following China’s removal of strict Covid measures in 2022, Fu Shou Yuan witnessed a meteoric rise. In the first half of 2023, the company’s net profits increased by 78 per cent to 464.7 million yuan. This rise was attributed to soaring burial plot prices in cities like Beijing and Shanghai.

When Fu Shou Yuan went public in Hong Kong in 2013, the average cost of a burial plot was around 68,000 yuan. By the end of last year, that figure had nearly doubled to 121,000 yuan, according to the company’s annual report.

In the first half of this year, the average selling price of burial plots dropped by 48 per cent to approximately 63,000 yuan, according to Fu Shou Yuan.

Across the nearly 20 regions where the company operates, revenue from Shanghai, its largest market, fell sharply by 54 per cent to 241 million yuan. In central Hubei province, sales declined even more steeply, plunging 65 per cent to just 281,000 yuan.