China's consumption market has maintained overall stability so far this year, retaining medium-high speed, thanks to a slew of government policies.
As the biggest driver of China's economy, consumption remained stable overall with the total retail sales of consumer goods up 8.1 percent year on year in the January-May period. The growth is expected to hit 8.2 percent in the first half of the year, said Wang Bin, deputy director of the Department of Market Operation and Consumption Promotion of the Ministry of Commerce.
E-COMMERCE INJECTS VITALITY
As a key driver of consumption growth in 2019, China's online retail sales came in at 3.86 trillion yuan (about 562 billion U.S. dollars) in the first five months, accounting for over one-fifth of the country's total retail sales of consumer goods, industrial data showed.
JD.com, the e-commerce giant that created the "618" online shopping event years ago to mark its anniversary, recorded sales of 201.5 billion yuan from June 1 to June 18, up 26.6 percent year on year.
As the business model evolved, services rather than real items are becoming the new hot spot targeted by the e-commerce platforms
The e-commerce giant Suning.com has launched a "one-hour service circle" project focusing on providing community service including express delivery and home appliances maintenance.
More consumers have switched their interest to domestic brands from foreign ones during the first 18 days of June. Alibaba's online marketplace Tmall said over 60 percent of the brands with sales of more than 100 million yuan on its platform during the "618" are domestic brands.
China's rural areas also continue to unleash consumption potential, with retail sales totaling 2.34 trillion yuan in the first five months of 2019, according to the Ministry of Agriculture and Rural Affairs.
Pinduoduo, a social e-commerce giant known for enjoying a huge consumer base in rural and small cities and offering group buying deals with big discounts, received over 1.1 billion orders during the 18 days.
At the beginning of June, three ministry-level authorities including the National Development and Reform Commission (NDRC) released plans on promoting the upgrading of key consumer products for recycling resources.
Consumers were encouraged to replace old home appliances consuming high energy with new energy-saving and intelligent ones. Some brands have already launched promotion campaigns, compensating consumers for the replacement.
As the government policies give more preferences to green and quality products, enterprises can only win opportunities in the fierce market competition by continued innovation and accelerating product upgrade, said Ge Fengliang, vice president of China Household Electric Appliance Research Institute.
Moreover, as China officially approved 5G commercial services earlier in June, a new round of consumption demand will be stimulated. Consumption of high-definition televisions, intelligent home appliances and VR/AR products is expected to see rapid growth, according to a source in the industry.