Elephant News:

According to the data just released, total retail sales of consumer goods and services increased by 2.5% year on year. What new changes occurred in China's consumer market in August? And how do you expect the consumer market to perform going forward? Thank you.

Fu Linghui:

Thank you for your questions. Consumption is certainly of great concern to everyone. The development of the consumer market is not only vital to ensuring flows in the domestic economy, but is also a key driver for improving people's living standards. This year, all sectors have actively implemented various policy measures to expand consumption. They have focused on expanding the supply of quality products, promoted the trade-in of old consumer goods, tapped the potential of service consumption and cultivated new growth drivers for consumption. As a result, the consumer market has remained generally stable. The main characteristics for August are as follows:

First, the consumer market has steadily expanded. Affected by fluctuations in the international energy markets and adjustments in the domestic market, sales of some bulk commodities have declined. In addition, frequent extreme weather events in some regions during August affected offline consumption to some extent. However, China's consumer market has shown strong resilience and policies to promote consumption have continued to take effect, with the expansion of the consumer market remaining unchanged. From January to August, total retail sales of consumer goods and services increased by 2.5% year on year, with total retail sales of consumer goods approaching 33 trillion yuan, an increase of more than 360 billion yuan compared with the same period last year. As a super-sized consumer market, China's super-large consumer market has continued to expand, which not only demonstrates the potential for consumption growth in China, but also helps to ensure flows in the domestic economy and stimulate unimpeded domestic and international economic flows.

Second, the transformation and development of the consumer market has continued. While the consumer market is expanding, it is also undergoing transformation, which is mainly reflected in the gradual shifts in consumption structure and consumption patterns. In terms of consumption structure, the proportion of service consumption and quality consumption has increased. With the rising ownership rate of durable consumer goods, residents' demand for service consumption rises, with a greater emphasis on experiential consumption, driving a shift in the structure of the consumer market. From January to August, retail sales of services increased by 4.9% year on year, outpacing the growth of overall market sales, and service consumption grew as a proportion of total consumption. In terms of commodity consumption, the proportion of sales of upgraded goods increased. From January to August, the proportion of retail sales of upgraded goods, including communication equipment, cultural and office supplies, and cosmetics, in the total retail sales of goods by units above designated size rose 1.7 percentage points year on year. In terms of consumption patterns, new models represented by online sales have been developing rapidly, with livestreaming e-commerce and instant retail playing an increasingly significant role in transforming the consumer market. From January to August, online retail sales of goods and services grew by 4.6% year on year, 2.1 percentage points faster than the total retail sales of consumer goods and services. With the innovative development of retail models, in the first eight months, the retail sales of warehouse membership stores and unmanned stores of units above designated size both increased by more than 25%.

Third, new growth drivers in the consumer market have gradually developed. With shifts in consumption mindset and advances in industrial technology, the consumption of smart and green products has emerged as a new highlight of the consumer market. From January to August, retail sales of wearable smart devices by enterprises above designated size maintained rapid growth, and retail sales of home appliances with high energy-efficiency ratings also grew by more than 25%. To meet the growing demand for quality consumption and digital consumption, information services and cultural tourism and leisure services have been upgraded at an accelerated pace, further expanding their market size. From January to August, the retail sales of in two categories ― communication and information services, and tourism consulting and leasing services ― each both grew by over 10%. It should also be noted that with the continuous improvement of the rural commercial logistics system and the effectiveness of entry and exit facilitation policies such as visa-free entry, the vitality of the rural consumer market and inbound tourism market in China has been enhanced. From January to August, retail sales of consumer goods in rural areas increased by 2.3% year on year, 1.3 percentage points higher than that in urban areas. Inbound shopping and cultural tourism experiences by overseas tourists have also shown solid growth momentum.

Looking ahead, China's demand for service consumption and quality consumption is constantly expanding, with diverse consumption scenarios, indicating huge market development space and potential in the future. However, it should also be noted that consumers' capacity and willingness to spend money still need to be further enhanced, and the supply of high-quality goods and services also requires further improvement. Next, we will make coordinated efforts to promote income growth, optimize supply and stabilize expectations, promote the trade-in of old consumer goods, fully tap the potential of service consumption, and optimize and upgrade production and supply, so as to promote the sustained and healthy development of the consumer market. Thank you.