Con­sumers in driv­ing seat of eco­nomic growth

China Daily (Hong Kong) - - BUSINESS - By REN XIAOJIN and ZHONG NAN

China has seen a strong con­sump­tion trend in the first half of this year, with the bricks-and-mor­tar re­tail sec­tor mak­ing a come­back and e-com­merce main­tain­ing steady growth, the Min­istry of Com­merce said on Thurs­day.

To­tal re­tail sales reached 17.2 tril­lion yuan ($2.54 tril­lion) be­tween Jan­uary and June, up 10.4 per­cent yearon-year, mak­ing con­sump­tion the ma­jor driver of China’s econ­omy, ac­count­ing for 63.4 per­cent of eco­nomic growth, said Gao Feng, the min­istry’s spokesman.

Ac­cord­ing to the min­istry, the re­tail sec­tor has re­gained its mo­men­tum, with sales at ma­jor spe­cialty and de­part­ment stores in­creas­ing by 5.6 per­cent and 1.3 per­cent re­spec­tively over the past six months. Fran­chise out­lets and con­ve­nience stores have showed stronger per­for­mance than others with 8.6 per­cent and 7.2 per­cent growth in sales re­spec­tively.

“When e-com­merce first emerged, tra­di­tional re­tail­ers suf­fered,” said Neil Wang, China pres­i­dent at the global con­sul­tancy Frost & Sul­li­van.

“How­ever, through cost con­trol mea­sures such as clos­ing un­prof­itable stores and adapt­ing the con­cept of ‘clicks and bricks’, phys­i­cal shops will em­brace new growth points.”

Wang said re­tail giants have been map­ping out their strat­egy to em­brace the age of new re­tail — the new mode of com­bin­ing phys­i­cal and vir­tual com­merce — to cope with the chal­lenges posed by on­line re­tail­ers.

While tra­di­tional re­tail­ers are mak­ing a strong come­back, Chi­nese shop­pers’ pref­er­ence for on­line re­tail shows no signs of let­ting up.

Ac­cord­ing to Gao from the Min­istry of Com­merce, sales from on­line re­tail to­taled 2.4 tril­lion yuan in the first half, up 28.6 per­cent year-on-year. The e-com­merce sec­tor ac­counted for 13.8 per­cent of to­tal con­sump­tion in the first half, up 2.2 per­cent yearon-year.

The ser­vice sec­tor also per­formed well in first half. Cater­ing gen­er­ated 1.85 tril­lion yuan in rev­enue, up 11.2 per­cent from same pe­riod a year ear­lier.

The tourism sec­tor was also promis­ing as the num­ber of tourists have been grow­ing, es­pe­cially to fa­mous spots such as Huang­shan Moun­tains, Tais­han Moun­tain and Lhasa, cap­i­tal of the Ti­bet au­ton­o­mous re­gion.

Through cost con­trol mea­sures such as clos­ing un­prof­itable stores and adapt­ing the con­cept of ‘clicks and bricks’, phys­i­cal shops will em­brace new growth points.” Neil Wang, China pres­i­dent of con­sul­tancy Frost & Sul­li­van

Con­tact the writ­ers at renx­i­ao­jin@ chi­nadaily.com.cn

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