Boost con­sump­tion growth by fos­ter­ing in­no­va­tive ideas

China Daily (Canada) - - VIEWS -

With con­sump­tion al­ready con­tribut­ing to about twothirds of China’sGDP­growth, it is not sur­pris­ing to see a huge shop­ping spree be­fore and dur­ing Spring Fes­ti­val, the sin­gle most im­por­tant hol­i­day for Chi­nese.

In re­cent years, Chi­nese on­line re­tail­ers have cre­ated spe­cial shop­ping days like “Dou­ble 11” and “Dou­ble 12” to pro­mote sales in the pe­ri­ods between tra­di­tional hol­i­days.

That China’s big­gest e-com­merce gi­ant Alibaba reg­is­tered a record sale of 120.7 bil­lion yuan ($17.78 bil­lion) dur­ing its an­nual Sin­gles Day shop­ping fes­ti­val onNov 11 last year speaks vol­ume of the suc­cess of its in­no­va­tive idea of a 24-hour shop­ping frenzy for con­sumers.

How­ever, what im­pressed me most dur­ing this Spring Fes­ti­val was the un­prece­dented con­ve­nience some Chi­nese e-busi­ness gi­ants of­fered to con­sumers; they not only promised timely de­liv­ery but also ac­tu­ally de­liv­ered on time.

When I trav­eled back to Wuhan, Cen­tral China’s Hubei prov­ince, formy fam­ily re­union right be­fore Lu­nar NewYear’s Eve, the heavy smog en­gulf­ing the city forced the fam­ily mem­bers to buy an air-pu­ri­fier as soon as pos­si­ble. I hes­i­tated for a while be­fore mak­ing an on­line pur­chase, be­cause many on­line re­tail­ers had stopped de­liv­er­ing goods be­fore the hol­i­days. Yet, to our sur­prise, JD.com, an­other Chi­nese e-busi­ness gi­ant, de­liv­ered a huge box on our door the next morn­ing, al­low­ing us to en­joy the Spring Fes­ti­val hol­i­day with clean air.

I am­not sure how much ex­tra cost the e-re­tailer would bear for en­sur­ing such timely de­liv­ery dur­ing the hol­i­day. For in­stance, it may have to pay triple the usual amount to the courier. But as a con­sumer, I was not only happy to meet the ur­gent need for an air-pu­ri­fier but also im­pressed by the com­pany’s ef­fec­tive im­ple­men­ta­tion of the bold idea of timely de­liv­ery dur­ing Spring Fes­ti­val, a move which fe­wothers have even thought of.

The courage to ex­plore new­busi­ness ideas that oth­ers may find out­ra­geous or can hardly imag­ine ex­plains why on­line shop­ping has been boom­ing in China.

China’s to­tal re­tail sales in 2016 in­creased 10.4 per­cent year-on-year to 33.23 tril­lion yuan ($4.83 tril­lion). And it was a key driv­ing force be­hind the sec­ond-largest econ­omy’s 6.7 per­cent yearon-year growth last year. But even more spec­tac­u­lar is the growth of on­line sales in China, 26.2 per­cent year-onyear to 5.16 tril­lion yuan.

It is un­re­al­is­tic to ex­pect the amount of on­line sales to con­tinue to rise at the cur­rent pace. But it is pos­si­ble that Chi­nese e-com­merce gi­ants will fur­ther ex­pand their mar­ket shares through more in­no­va­tive busi­ness mod­els, tech­no­log­i­cal ap­pli­ca­tion and mar­ket­ing cam­paigns to boost over­all con­sump­tion growth in the coun­try.

A video re­cently re­leased by Ama­zon demon­strated the new­con­cept of con­ve­nience stores fea­tur­ing ar­ti­fi­cial in­tel­li­gence-pow­ered tech­nol­ogy that elim­i­nates check­outs, cash reg­is­ters and, more im­por­tantly, queues.

For many tra­di­tional brick-and-mor­tar re­tail­ers in China strug­gling to cope with in­ten­si­fied off­line and on­line com­pe­ti­tion and chang­ing spend­ing pat­terns, the new­busi­ness model that Ama­zon in­tends to in­tro­duce may be bad news. But for China’s thriv­ing e-busi­nesses gi­ants, this is a good time for learn­ing. In fact, e-busi­nesses’ re­cent talk of the need to de­velop both on­line and off­line re­tail sug­gests they are be­gin­ning to em­brace this newchange to make con­sump­tion even more con­ve­nient.

With China’s per capita GDP reach­ing $8,000, still be­low the world av­er­age of about $11,000, not to mention the US’ $57,000, the coun­try has am­ple room for con­sump­tion growth in the com­ing years, which will ben­e­fit the most in­no­va­tive busi­nesses the most.

The au­thor is a senior writer with China Daily. zhuqi­wen@ chi­nadaily.com.cn

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.