This article was originally created by “Suning Fortune Information” and the author is Huang Dazhi, a researcher at Suning Financial Research Institute
How do we evaluate China today?
Some people say that we have mastered a large number of key core technologies and basically achieved independent innovation breakthroughs. It is also said that China’s technological development is far behind Europe and the United States, and key technologies are subject to others, and a small chip can put countless enterprises in a “dead place.”
Some people say that our innovation ability is leading, and a large proportion of high-level and high-impact journal articles. Others say that our research papers are worthless because they are fraudulent.
Obviously, the characteristics of China’s vast land resources make it difficult to evaluate with specific words.
The same is true for consumption. Some people say that China’s consumption is about to exceed that of the United States, ranking second in the world, and some people say that our consumption level is still low, and the quantity and quality of consumption are not enough.
Let ’s look at it separately.
Different consumer era
Miura Exhibition, a Japanese consumer society research expert, has a very famous book, “The Fourth Consumer Era”, which describes the history of Japan ’s consumption changes over the past two hundred years and divides the four consumer eras:
First consumer era (1912 ~ 1941 ) Westernized consumerism. The victory of the Sino-Japanese War and the Russo-Japanese War brought unprecedented prosperity to the economy, Western culture began to enter, and Western food and other cultures began to prevail.
Second consumer era (1945 ~ 1974) : The rise of household consumption. The development of the economy has accelerated the process of industrialization in Japan, and the popularity of various household appliances has led to a large consumption by households.increase.
The third consumer era (1975 ~ 2004) : Personalization, branding, high-end Consumption. The continuous increase of income has stimulated the consumer’s desire for consumption, and gradually increased the demand for consumer goods. Personalization, branding, high-end, and experiential consumption have grown rapidly.
Fourth consumer era (2005 to present) : Return to rational consumption. A series of factors such as population aging, economic downturn, natural disasters, and the international economic and political environment have caused the Japanese people’s consumption concept to gradually change. People began to pay more attention to cost-effectiveness and convenience.
Combining various indicators such as population, GDP, and per capita income, compared with these four consumption eras, it can be roughly judged that China’s current household consumption is generally close to Japan’s “third consumption era”.
Of course, this is obviously not the whole picture of China’s consumption, or not all of it. As the most direct factor in deciding consumption choices, income differences are reflected in the diversification of consumption, making them at different consumption stages. Therefore, the imbalance of regional development has also led to different “consumption eras” for cities with different levels of development.
In general, due to the difference in resource endowments and policies between cities, the characteristics of step development will appear in development. The economic development of first- and second-tier cities is faster than that of third- and fourth-tier cities. The average urban income will also change with the prosperity of economic development. The more developed the economy, the higher the income.
Among them, the characteristics of the first and second tier cities have a clear transition from the “third consumer era” to the “fourth consumer era”. The developed economies of Tier 1 and Tier 2 cities have higher average income levels and have led to relatively advanced consumption. Their consumption pays more attention to diversification and consumption experience, and simple standard and standard consumption cannot meet their consumption needs. At the same time, after meeting material needs, consumption in first- and second-tier cities has gradually shifted to service consumption that meets spiritual needs, such as healthcare, education, culture, and entertainment. At the same time, the rise of “de-branding” consumption and the rapid development of the sharing economy both reflect that the concept of shared consumption is gradually replacing the concept of personal consumption. The awareness of environmental protection, altruism, conservation, and sharing are typical features of the fourth consumer era.
Most of the third and fourth tier cities are still in the “third consumer era.” After the subsistence consumption of subsistence and family life was satisfied, it began to shift towards enjoyment consumption. According to a report by McKinsey’s “The Road to the Modernization of Chinese Digital Consumers”, the proportion of e-commerce shopping in third- and fourth-tier cities is higher than in first- and second-tier cities, and it shows stronger consumer desire and potential in cross-border e-commerce shopping. .
The more sinking cities of tiers 568, 778 are probably in the “second consumer era”, which is the stage of household consumption. Affected by factors such as household income and the supply of consumer goods, personalized consumption is still in its infancy. However, with the further development of the economy and the continuous tilt of policies, when this “sinking market” of Guangmao is developed, the consumption capacity and prospects it produces will become even greater.
The consumption situation based on the degree of economic development is probably the case. The imbalance of economic development has led to the imbalance of income, which has led to the status quo in different consumption eras.
Different “consumer maps”
In addition to different regions at different levels of consumption, consumption growth data in different regions can reflect this difference in more detail.
In general, in various regions of China, the economically strong provinces along the southeast coast have performed steadily, the consumer market is huge, and the consumption growth in the central and western regions has been faster. But in different regions, residents’ consumption shows different characteristics.
Taking the data released by provinces and cities in the first half of 2019 as an example, in the first half of 2019, China’s consumption expenditures generally increased compared with 2018. The southeastern coastal provinces occupy half of the top ten provinces, and the five provinces of Jiangsu, Zhejiang, Shanghai, Min, and Guangdong have exceeded average levels.
Consumption growth in the central and western regions is relatively fast, and generally exceeds the southeastern coastal provinces, but it is still less than the total amount. For example, the total retail sales of consumer goods in Sichuan in the first half of the year increased by 10.5% year-on-year, which was 2.1 percentage points higher than the national average. In the first half of the year, the total retail sales of consumer goods in Jiangxi Province increased by 11.2% year-on-year, which was 2.8 percentage points higher than the national average.
In regions with high consumption power, they also have relatively advanced and novel consumption concepts. Such as the cost of spending in the gym, as well as cultural performances such as watching performances, watching dramas, and traveling.
At the same time, with the increase of income and the promotion of Internet technology, new service, development and experience consumption have become new special features.Color consumption. For example, the contribution rate of service consumption to the growth of total consumption in Beijing in the first half of the year reached 70.4%, and the contribution rate of consumption in education, culture, entertainment, and healthcare to the growth of total consumption reached 60%; retail sales in Shanghai without stores reached 117.324 billion yuan, The same period in 2018 increased by 20.4%.
The consumption caused by technological innovation is increasing. For example, the continuous advancement of network infrastructure construction and universal telecommunications services, gradually accelerating the deployment of 5G networks, and the accelerated application of next-generation information technologies have led to the emergence of digital, information and intelligent new products and new business formats. Especially with the increasing popularity of mobile payments, the rapid development of smart logistics and social e-commerce, online consumption has maintained rapid growth.
How much growth space does China’s consumption have?
According to the latest social consumer goods retail data from China and the United States, China ’s total consumption scale is closer to that of the United States in terms of exchange rates. Today, the gap is about US $ 270 billion.
Data from the National Bureau of Statistics show that the total retail sales of social consumer goods in the whole year of 2019 were 4114649 billion yuan, a nominal increase of 8.0% over the previous year. In the United States, the 2019 consumption data released by the Census Bureau shows that the total retail sales of consumer goods in the United States in 2019 reached 6.235557 trillion US dollars, up 3.6% year-on-year. In other words, the gap between China and the United States has narrowed from US $ 340 billion in 2017 to US $ 280 billion in 2018 and has further narrowed to around US $ 270 billion. In 2019, the scale of Chinese consumption is equivalent to 95.67% of the United States.
However, based on factors such as population, economic development, and domestic demand, in the long run, China’s consumer market will become the world’s largest domestic market. So, how big is this market?
A report by McKinsey shows that in the five years from 2016 to 2021, China ’s consumption increase will reach 1.8 trillion US dollars. What’s the point of this number? It is roughly equivalent to the total British consumption in 2021, that is, China’s consumption increase in these five years can catch up with the total British consumption in one year.
This data is by no means speculative. There are multiple factors behind it.
First is population. Although China ’s population growth rate is decreasing, according to the latest statistics, as of the end of 2019, the total population of the mainland exceeded 1.4 billion people, which was 1.4005 million, an increase of 4.67 million over the end of the previous year. In the future, these 1.4 billion people Will generate 400 million middle-income groups, the largest in the world,