Summary of Key Findings
After five years of development, the five major international consumer centers—Beijing, Shanghai, Guangzhou, Chongqing, and Tianjin—have seen a general slowdown in the growth rate of retail sales of consumer goods (social retail sales) in the first half of this year. While the highest growth rate was recorded in Guangzhou at 2.9%, Beijing experienced a year-on-year decline of 2.2%. However, there is a crucial transformation taking place in the consumption structure: traditional durable goods (such as fuel vehicles and household appliances) are entering a period of transition, while service consumption, experiential consumption, and upgraded products (such as new energy vehicles and smart devices) have become new growth drivers. In the future, the focus of urban competition will shift from "scale expansion" to "quality improvement," which includes upgrading the "first-store economy," expanding service consumption, attracting inbound tourism, and aligning with international standards (by increasing the length of visitors' stays, enhancing their experiences, and improving the overall hospitality).
Detailed Analysis
1. Slowing Growth in Retail Sales: Traditional Consumer Goods Facing a Decline
The lack of impressive growth in retail sales among these five cities is mainly due to the high base created by previous "trade-in" policies for old products. Now, traditional durable goods consumption has entered a period of decline. For example, Beijing's retail sales declined significantly because fuel vehicles were not selling well; Shanghai saw a 11.7% decrease in automobile sales, and household appliances and communication equipment also experienced negative growth. Although Guangzhou had the highest overall growth rate, the growth in household appliances and sports goods was only around 1%, with many categories still showing declines.
New energy vehicles are growing rapidly (29.2% in Guangzhou and 47.1% in Chongqing), but this is not enough to offset the decline in fuel vehicle sales. In short, the enthusiasm for purchasing new vehicles and appliances has subsided, and new consumption trends have not yet taken hold.
2. Consumption Demand Has Not Disappeared; It Has Just Shifted towards "Experiences and Interests"
The slowdown in retail sales does not mean that people are no longer spending money; rather, the direction of their spending has changed. Basic consumer goods (such as food and oil) and "interest-driven/quality-oriented" purchases have become more prominent. For instance, sports and entertainment products in Chongqing grew by 22.5%, and cultural and office supplies in Tianjin increased by 76.2%. Smartphones and wearable devices also saw growth rates of over 14%. This indicates that people are preferring to spend money on activities (such as fitness and travel) and items related to their interests (cultural and trendy products) rather than large items like houses and cars. Guangzhou's ability to maintain the highest growth rate is also due to the presence of high-end commercial brands (such as Taikoo Li and SKP), which provide a variety of experiential opportunities.
3. Upgrading the "First-Store Economy": From Simply Opening Stores to Competing for Exclusive Events
The concept of a "first store" (where a brand opens its doors in a city for the first time) is no longer enough; cities are now competing for exclusive events like "first launches, premieres, and exhibitions." Chongqing plans to add 300 new first stores this year, offering subsidies of up to 5 million yuan; Beijing added 483 physical first stores in the first half of the year and hosted 520 new product launch events.
The reason for this is that such events attract fans and media attention, thereby boosting local consumption. It's like using these events as a brand ambassador to attract visitors and increase consumer activity.
4. Service Consumption Becoming a New Engine: Cities are Betting on "Intangible Goods"
In June of this year, the National Bureau of Statistics included service consumption in its statistics, highlighting its importance for the future. For example, despite a decline in overall retail sales in Beijing, service consumption increased by 4.5%. Guangzhou launched a "Service Consumption Season" that covered various sectors such as dining, culture and tourism, sports, and domestic services; Shanghai aims to create an experience-friendly environment suitable for all ages.
The reason is simple: with per capita GDP reaching around $14,000, people are more willing to spend on experiences (such as travel and massage) rather than tangible items. Cities need to capitalize on this trend by providing high-quality services.
5. The Importance of International Standards: Attracting and Retaining Foreign Visitors
To become true international consumer centers, cities must attract and retain foreign visitors. In the first half of this year, the number of inbound foreigners increased by 20.4%. Shanghai, Beijing, and Guangzhou are popular among foreign tourists, but they still fall short of cities like New York and Paris in terms of visitor duration, experience quality, and overall hospitality.
- High transaction prices but short stays: Foreign visitors may only stay for a few days in China, compared to longer stays in Paris.
- Limited cultural and fashion experiences: While we have many shopping malls, there is a lack of cultural and fashion events (e.g., Paris has fashion weeks, while Tokyo hosts anime festivals).
- Convenience of services: Factors such as payment systems and language support for foreigners need to be improved.
To transform from "big consumer cities" into "strong international cities," these cities must promote their own brands (such as Hanfu and tea culture) and optimize their services to make it more appealing for foreigners to visit, stay longer, and spend more.
Conclusion
The five major international consumer centers are shifting from focusing on scale to emphasizing quality. This transformation presents both opportunities and challenges. Whether they can become true international benchmarks in the future depends on their ability to leverage service consumption and inbound tourism, as well as their ability to provide deeper and more engaging experiences. After all, consumption is not just about buying goods; it's also about choosing a lifestyle.