China’s Consumption Structure Steadily Upgraded

China’s total retail sales of consumer goods for the first time broke through RMB 40 trillion last year.

As the international community was plagued by raging uncertainty and weak external demand, consumption served as the engine propelling China’s economic growth in the past year, stabilizing China’s economic growth expectations. First of all, China’s huge market is currently demonstrating the nation’s advantages, and has also boosted diversified consumption modes. Secondly, China’s booming consumption has catalyzed the transformation of its economic structure, lending impetus to China’s supply side structural transformation. Finally, China has attracted global consumer goods, becoming a “stabilizer” in the international market.

As the international community was bogged down with global economic downturn, China’s economy is in the process of upgrading. Presently, China’s economic development no longer pursues quantity and speed, but prioritizes “high quality” as the standard and requirement. In order to advance the smooth and stable transformation of China’s consumption from low-level, large-volume to high-tier, high-quality, the Chinese government has paid special attention to the consumption economy and adopted a raft of measures to encourage the development of diversified consumption, trying to cultivate new driving forces for the healthy and stable development of consumption.

In 2019, China’s total retail sales of consumer goods broke through RMB 40 trillion for the first time, reaching RMB 41.1 trillion, an increase of about eight percent over 2018, and its contribution to economic growth exceeded 60 percent, becoming the primary force to drive economic growth for six consecutive years. Looking back on 2019, online retail grew rapidly, food and consumer goods grew steadily, while the increase of cultural and entertainment goods saw acceleration, and the catering service market witnessed an uptick in growth as well.

With the rapid development of information technology, “Internet+” has become strategic leverage for the Chinese government to cultivate new consumption growth points. Online services cover advertising sales, trading, payment, logistics, technology, and operation, which can realize 24-hour online cross-regional customer service and real-time tracking of product dynamic information. Under the strong support of the growing logistics industry and new payment means, people’s consumption mode has changed dramatically, and consumption has become a more convenient experience.

The vitality of the Chinese market lies in the creativity of producers, the strong purchasing power of consumers, and their constant desire for consumption. China’s new generation, represented by the post-90s youngsters, is the main group for online shopping. Young consumers give Internet consumption a sustained and strong development momentum, as well as an unpredictable development potential.

It is worth mentioning that with the deepening of reform and opening-up and the improvement of people’s living standards, the consumption concept of Chinese consumers has quietly changed: while they are inclined toward green, healthy, and sustainable consumption, they also begin to reflect on their inner demands, paying more attention to whether the details of consumption can generate emotional resonance.

Thus businesses pay more attention to the “refined and specialized” needs of consumers, and are committed to providing the market with the best consumer experience in the field of segmented products. In addition, consumers no longer blindly pursue foreign brands, and domestic products are gaining increasing popularity. The year of 2018 was acclaimed as the “the first year of the national tide,” leading to the public’s unabated enthusiasm for domestic products across the country.

Nowadays, new and advanced technologies such as biometric recognition, big data, artificial intelligence, blockchain, and the Internet of Things are promoting the continuous iterative upgrading of the consumption chain and value chain. In the future, more advanced technologies and concepts will continue to reshape the consumer economy.