Young consumers driving adjustments on supply side

The Government Work Report this year points out that the implementation of the strategy of expanding domestic demand must be combined with deepening supplyside structural reforms to better coordinate consumption and enhance consumption’s role in stimulating sustainable growth. This is the latest affirmation by the central authorities of the importance of consumption as a major growth driver.

It should be noted that consumption refers to not only the willingness to buy, but also the ability to buy. Therefore, the Government Work Report emphasized the need to increase people’s income, stressing that the efforts to stimulate consumption should be made in three fields: cultivating and expanding new consumption, stabilizing and expanding traditional consumption, and optimizing the consumption environment.

With the strengthening of China’s economic strength and the rise of the Generation Z consumer group, the young people, who grew up in the era of China’s most rapid economic development and have been active in the internet world since childhood, are pushing consumption in China from “basic survival” to “personal enjoyment”. Under the impact of the demands of these consumers, products that have obvious personalized expression, a high level of intelligence and good design are more likely to be popular.

This change on the demand side also has important implications for how to stabilize and expand traditional consumption. The supply side should adapt to this new consumption trend and adjust the design, marketing ideas and pricing strategies for traditional products accordingly. That calls for not only continuously creating new consumption scenarios and experiential services, but also using intelligent technical means to give traditional consumer goods new added value.

In the context of the increasing popularity of new digital economy formats and the deep integration of the digital economy and the real economy, issues such as digital privacy protection and information cocoons caused by algorithm traps that are closely related to the protection of consumer rights and interests should be effectively addressed by strengthening supervision and building a rule-of-law business environment.

The country’s future growth comes from its ever-expanding market size. With a population of 1.4 billion, China should have confidence in its consumption potential and endeavor to tap it to stimulate new momentum for the highquality development of the country.