Summary of Key Points
The new retail policy introduced by nine departments is not merely about “promoting consumption”; it aims to transform the retail industry’s growth logic. The traditional approach of “opening more stores, competing for online traffic, and engaging in price wars” has reached its limits. In the future, the focus will shift from “scale competition” to “system efficiency competition.” The policy adjusts the underlying rules of retail operations: how to optimize the layout of commercial outlets, how to recreate value in physical stores, how retailers can generate profits, how platform traffic should be allocated, and how price wars can be conducted in a sustainable manner. The ultimate goal is to elevate retail from being about “being able to buy something” to about “buying something that’s worth it and wanting to return again.”
Detailed Explanation
1. Retail is no longer just about selling goods; it has become an essential part of urban infrastructure
In the past, retail was simply the final stage of transactions—businesses sold products, and customers made purchases. Now, the policy links retail with urban renewal, community services, and regional economic development. For example, there are efforts to create “15-minute convenience zones” where customers can buy groceries, have shoes repaired, or pick up deliveries within a short walk. Rural areas also need access to high-quality goods.
Opportunities: Companies that develop community stores, serve rural markets, or renovate old shopping malls will benefit from these policies.
Constraints: Businesses that open too many stores in the same area (e.g., three supermarkets on one street) or rely solely on rent income will face greater challenges.
2. Physical stores don’t need to fear being replaced by online platforms; they should become places customers want to visit
Standardized products available online (such as tissues and laundry detergent) have little appeal in physical stores. The policy encourages stores to create unique experiences, such as adding coffee areas in bookstores, offering children’s baking services in supermarkets, or hosting trendy brand exhibitions. In other words, the value of a physical store lies in providing a reason for customers to spend time there—perhaps even bringing friends along. Stores without distinctive features will become mere inventory warehouses, while those with engaging experiences will become popular hangouts in urban life.
3. Retailers must stop being passive landlords and learn to sell products themselves
Traditionally, shopping malls made money by charging entry fees and for the use of store space (brands had to pay to display their products). This no longer applies. The policy requires retailers to engage in deeper partnerships and take control of their operations, such as purchasing goods directly from farms or collaborating with brands to develop exclusive products.
Reason: Customer footfall is not increasing, so the value of a store’s space depends on its ability to sell products, not just its location. Retailers must shift from being landlords to becoming active sellers, focusing on product selection, supply chain management, and inventory control.
4. Growth comes from revitalizing existing stores, not opening new ones
Cities no longer lack shopping malls, but many are empty and unpopulous—either because they have outdated brands or their products don’t meet community needs (e.g., selling trendy brands to an elderly audience). The policy emphasizes upgrading the content of existing stores, such as transforming old department stores into places for young people or adding community-based services like group buying and laundry services. The key metrics for success are not just the appearance of the store but how often customers visit, how quickly products sell, and how much profit is generated per square meter.
5. Low prices are acceptable, but not at the cost of losing money
The policy prohibits platforms from promoting only the lowest-priced items or forcing retailers to subsidize sales (e.g., during events like Double 11). “Fake low prices” are often achieved by brands sacrificing profits or retailers paying extra. “True low prices” result from efficient supply chains (e.g., direct factory deliveries and reduced inventory).
For brands, the strategy is to offer both affordable introductory products and profitable core items, as well as products exclusive to specific channels, while maintaining a reasonable price structure.
In Conclusion
The new policy is not about supporting physical stores at the expense of online platforms or vice versa; it aims to return the retail industry to its essence: providing customers with products and services that are worth buying and worth returning for more. The opportunities will go to those companies that can break free from outdated practices (relying on opening stores, traffic, and low prices) and focus on delivering quality products, efficiency, and value to their customers.