Guideline urges methods to increase holiday purchasing while ensuring public safety amid epidemic
As Spring Festival draws near, a recent guideline aims to make consumption a more forceful driver of growth this year, experts said.
On Jan 16, roughly two weeks before the holiday, the National Development and Reform Commission, China's top economic planner, unveiled a set of 10 measures to bolster consumption, and encourage local governments to use various means to meet residents' needs during the festivities.
Local government is urged to fulfill its primary responsibilities of stabilizing and expanding consumption alongside COVID-19 epidemic prevention and control measures. The guideline also warns against one-size-fits-all approaches in containing the coronavirus to ensure the impact on livelihoods is limited.
It further suggested that online shopping modules be upgraded and big holiday sales events be promoted online.
Liu Baokui, a researcher at the Institute of Spatial Planning and Regional Economy at the NDRC, said the new measures are part of the efforts to implement instructions from the Central Economic Work Conference and put into effect policies to lift consumption this year.
"The measures are timely and well-calibrated, as there have been developments in COVID-19 specific to some regions recently, so governments should keep in mind that one-size-fits-all containment measures may unnecessarily hurt consumption," Liu said.
He said that overall consumption grew last year, with recent figures from the National Bureau of Statistics showing China's retail sales rising by 12.5 percent, but added that growth is slowing and expectations are weakening.
To tackle these challenges, the guideline encourages the development of new methods to drive consumption.
For example, favorable purchasing policies could encourage rural residents to buy new energy vehicles, while manufacturers could focus on creating goods, such as home appliances and furniture, better suited to consumers living in the countryside.
In addition, the guideline calls for smart retail sales to be ramped up. The digitization of shopping malls, supermarkets and convenience stores will be accelerated, and efforts will be made to hasten the cultivation of experiential and immersive consumption experiences to attract consumers.
The development of platforms for smart bookstores, smart pharmacies and smart delivery containers will also be incentivized.
Liu hailed the application of smart retail facilities, which can enable companies to better balance business.
"Smart retail makes it much more possible to match supply and demand. It has huge developmental potential as it helps save on logistics and warehousing costs and has advantages in meeting diversified and personalized needs," Liu said. "Going forward, support for smart retail will be factored in as part of land use plans, city planning and community design."
He also said that efforts to intensify supervision of the smart retail sector will continue, and its further development will take basic consumer needs into consideration, especially of those living in rural areas.
Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, said that the New Year and Spring Festival holidays have had a notable impact on consumption.
Figures from the Ministry of Commerce show that in Beijing, during the New Year's holiday from Jan 1 to 3, sales at department stores, restaurants and on e-commerce platforms rose 18.8 percent from the previous year.
Nationwide, from Lunar New Year's Eve to the sixth day of the festival last year, the retail and catering industries achieved total sales revenue of 821 billion yuan ($130 billion), up 28.7 percent year-on-year, and up 4.9 percent compared with the same period in 2019.
Retailers are finding that younger buyers are increasingly flexing their purchasing power.
According to a recent report from Chinese online retailer JD on holiday purchasing, Generation Z consumers are showing a greater appetite for buying New Year gifts for their parents and older relatives.
Many of them prefer to buy sets of gifts specially designed for Spring Festival, as they are aesthetically pleasing, and purchasing online saves them time. They are also being more health conscious while buying foods.
Additionally, a report on consumption issued by e-commerce site Xiaohongshu in December noted that younger consumers are leaning heavily on social media platforms to air their demands. This, in turn, has created new channels for retailers to market their products.