China is the first major economy to register positive economic growth after the onset of the global public health crisis in 2020. With the macro economy rebounding, the consumer market in China has gradually recovered, new business formats and modes have emerged, consumer behavior and habits have changed, and the consumer market has adopted new features and highlights.
As China has got a grip on the novel coronavirus, its consumer market is recovering and showing an accelerating trend.
According to the National Bureau of Statistics, the year-on-year growth rate of China’s total retail sales of consumer goods was negative in the first half of this year. However, it began to turn around in August, rising by 3.3 percent to 4.6 percent in September and October, respectively.
The contribution of final consumption expenditure to economic growth rebounded, too, from minus 73 percent in the second quarter to 34.9 percent in the third quarter; it was 64.1 percent in the first quarter. The growth in consumption and the contribution of final consumption expenditure continue to rebound, and consumption will remain the main driving force for China’s economic growth.
This year, people’s consumption habits have changed significantly with online shopping becoming an important channel. From January to October, the online retail sales of physical goods in China increased by 16 percent, which was 21.9 percentage points higher than the growth rate of total retail sales of consumer goods, and the proportion of online retail sales of physical goods in the total retail sales reached 24.3 percent.
The development of the digital economy has boosted the emergence of new business formats and modes and accelerated the integration of online and offline shopping. The range of online shopping continues to expand from commodities to services such as medical care, education, culture and entertainment. Door-to-door services such as those for catering and fresh food have grown substantially.
Livestream e-commerce and consumer-to-manufacturer (C2M) customization have driven the innovation of consumption modes. According to data from the Ministry of Commerce, in the first half of 2020, there were more than 10 million live webcasts, more than 400,000 active hosts, more than 50 billion views and more than 20 million products for sale in online live shows.
The C2M mode combined with “factory live shows” is helping local enterprises develop their own brands, embedding livestream e-commerce into the manufacturing process of goods, and displaying the whole process of commodity manufacturing to consumers through livestreaming.
With the post-1990 generation becoming the backbone of the work force and the post-2000 generation entering the workplace gradually, the “new generation” of young consumers has enhanced purchasing power and their influence on the consumer market is beginning to show.
The “new generation” has distinct consumption concepts, greater acceptance of local brands, more demand for personalized and diversified products, and is willing to pay a premium for unique designs and characteristics. So the demand for domestic popular brands, social interaction and personalized consumption will further increase.
At the same time, because of the country’s aging population, the structure of consumer spending is going to see a change. The consumption demand for commodities and services intended for seniors will increase rapidly in China, as those born during the baby boom of the 1950s and 1960s will soon be senior citizens. Green and healthy consumption will also receive more attention.
Besides, affected by the macro-economic situation, consumers have conservative income expectations, making their consumption philosophy more rational. Because of budget constraints, people are more inclined to increase household savings and maximize the utility of their budget. As a result, products and services with simple, moderate, practical, and cost-effective character will find more favor with consumers.
Looking into the future of China’s consumer market, the new consumption pattern will continue to develop with the in-depth application of new technologies such as the mobile internet, cloud computing and artificial intelligence, all driven by the new round of technological revolution and industrial transformation. The diversified consumption demand generated by the improvement in residents’ living standards will be better met.
In a word, the new consumption will be an important force that leads domestic economic circulation, and promotes the establishment of the “dual circulation” development paradigm in which the domestic economic cycle plays a leading role while the international economic cycle remains its extension and supplement.
First, the new modes of consumption will innovate continuously, and intelligent, shared, information technology-based and experience-oriented consumption will develop rapidly.
Second, the new content of consumption will expand. Consumption of commodities with higher quality and lower prices will increase, and services will surpass commodities to become the main part of individual consumption gradually.
Third, the supply of consumption will become more diversified. Physical retail stores will accelerate their digital transformation. Online platforms and traditional manufacturing will cooperate deeply. And the personalized, diversified and flexible consumption supply will become more abundant.
Source: China Daily
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December 31, 2020 at 06:31PM
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