'Tomorrow's businesses won't sell products, they'll sell identity and belonging'

In a dimly lit "escape room," 25-year-old Liu Yina and her friends race against the clock to solve a puzzle. To unlock the door, they need to figure out a four-digit password.

"Escape rooms aren't just games, they're portals to another world," she says. "For two hours, I forget about deadlines and bills. These moments enrich my life because the workweek routine can be so monotonous."

"Escape rooms" are places where teams of players are given specific tasks, like finding clues or solving puzzles, in a limited amount of time.

This form of recreational activity falls into the category of the "experience economy," a term popularized by American authors B. Joseph Pine II and James H. Gilmore in a 1998 book of the same name.

They argued that businesses should focus on creating unique experiences for customers who are no longer content with buying material things but rather want to spend their money buying memorable experiences.

The economy they described is flourishing in China. Many businesses now create sensory-rich interactions, tapping a public sentiment that emerged after the trauma of the coronavirus pandemic.

"After the lockdown and the home-office phase, I realized how important it is to get out, enjoy nature, interact with people, and engage in events and activities that bring me surprise and joy," said Liu.

Xu Xiaopeng, a senior director at Amazon China, put it this way: "People realized life is fragile. Now, they chase moments that feel meaningful."

In Shanghai, the "experience economy" is exemplified by activities such as virtual reality gaming and role-playing, immersive theaters, and escape rooms. Last year, some venues in Shanghai reported monthly foot traffic exceeding 100,000 visitors.

Indeed, the city has the highest density of "escape room" venues in China, with premium experiences priced at 300-500 yuan (US$40-$70) per session. Revenue from "escape room" grew an estimated 25 percent last year.

Interactive puzzle games in these venues allow participants a chance to step into themed narratives, where they may be asked to find missing keys or fix some mechanical systems within a certain time limit.

The operator of one of these rooms said, "Unlike passive forms of entertainment, escape rooms require engagement and teamwork, making them a favorite among people seeking unique social experiences."

Immersive theater also affords people the chance to step out of their normal spheres of life.

The immersive theater production "Sleep No More," an adaptation of Shakespeare's "Macbeth," has attracted widespread attention in Shanghai.

Such theaters break traditional boundaries between performers and audiences, allowing participants to physically explore a multi-sensory environment and even influence narratives.

"I feel like I am entering another world, which was an unforgettable memory," said one attendee after a few hours in an immersive theater.

According to the 2023 National Scripted Entertainment Industry Report, 84 percent of "escape room" users are aged 20–35, with 72 percent of them citing "social bonding" as the reason for their interest.

One enthusiast, 28-year-old Zhu Linxin, said she is expanding her social circle by attending workshops to learn new things like photography and acting.

"I made lots of new friends through these kinds of activities," she said. "I feel more extroverted than before. I think that experiencing new things enhances my self-image."

That kind of public craving for something different and exciting has made investment in the "experience economy" attractive.

Businesses that operate venues offering virtual reality entertainment and "escape rooms" secured significant funding last year, with industry investment growing at an estimated 40 percent a year.

Also included in the "experience economy" are pet cafés, which have become popular in Shanghai. These venues fuse the coffee culture with the rise in pet ownership.

Some venues go beyond traditional dogs and cats to include more exotic pets like raccoons and rabbits. The Kate and Douglas Pet Cafe in Xuhui District caters to people who don't own pets, offering cloud interactions with animals.

A woman surnamed Ren said she goes to a cat café to "de-stress. The purring of cats is great therapy."

"Premium cat cafés in Shanghai charge 80 to 150 yuan per sitting, and some high-end locations report monthly revenues exceeding 200,000 yuan," one industry analyst said.

China's government is encouraging businesses to focus on the "experience economy" in sectors such as tourism, retail, and entertainment. The 2024 Central Economic Work Conference, for example, prioritized "new consumption growth points," like immersive tourism.

Shanghai's 14th Five-Year Plan (2021-25) emphasized cultural innovation and new models for consumer spending, including virtual reality, immersive entertainment, and related industries.

The "experience economy" is more than a trend; it's a societal shift, according to Cao Yixia, deputy director of the Youth Academic Exchange Centre at Shanghai Academy of Social Sciences.

"Tomorrow's businesses won't sell products; they'll sell identity and belonging," she said.