The Key Words Of "Buy And Buy" In 2019: Consumption Classification, "Town Youth" And Sinking Market

In 2019, GDP growth slowed down, Global trade environment turbulence and geopolitical uncertainty, let all trades and professions frequent "too difficult" anxiety, but the consumer industry is gradually becoming the main force of economic growth. Chinese consumers' enthusiasm for buying and buying is still the engine of economic growth.

In December 16th, the National Bureau of statistics released the latest data. In 2019 1-11, the total retail sales of consumer goods amounted to 372872 billion yuan, up 8% over the same period last year. Among them, the retail sales of consumer goods other than cars amounted to 337951 billion yuan, an increase of 9%.

According to McKinsey's 2020 consumer survey, China's consumer confidence index (CCI) recovered in the second half of 2018 and recovered to a 10 year high in early 2019. Chinese consumers are still spending substantially in 2019.

At the same time, people's consumption view is constantly remolding and changing rapidly under the influence of policy superposition, income level, channel differentiation, social rise and so on. Unlike previous years of "consumption escalation" or "consumer demotion", this year's "consumption classification" has become a more frequent key word, while the purchasing power of the new generation in the low and middle tier cities has become more and more powerful, and has become a new growth point for many categories.

Can't stop buying and buying

In 2019, the sales volume of the "double 11" Shopping Festival created by the Chinese people once again broke the record. The total transaction volume of all platforms increased by 31% over the previous year, reaching 410 billion yuan (about 58 billion US dollars), which is much higher than the sum of online transactions on "online shopping Monday" and "black Friday". McKinsey concludes that the demand for Chinese consumers is still strong, and is still the engine of economic growth in China and even the world.

According to the National Bureau of statistics, according to the consumption type, 1-11 months, food and beverage revenue was 41896 billion yuan, an increase of 9.4% over the same period, and retail sales of 330976 billion yuan, an increase of 7.9%.

From the point of view of channels, in 2019 1-11 months, the national online retail sales volume of 94958 billion yuan, an increase of 16.6% over the same period last year. Among them, the online retail sales of physical commodities increased by 76032 yuan, an increase of 19.7%, accounting for 20.4% of the total retail sales of social consumer goods, and the consumption, wear and use of commodities increased by 29.6%, 16.5% and 19.8% respectively in online retail sales of physical commodities. The highest growth rate in 1-11 months was +13.9, cosmetics, 12.7%, and cereals, Oils and foodstuffs (+10.2%).

Cosmetics are still one of the most attractive categories of "double eleven". L'OREAL said it has won many sales titles including beauty brand, men's skin care, high-end hair salons, etc. the top ten brands of cosmetics and L'OREAL accounted for five seats. Shiseido said that during Tmall double 11 in 2019, Shiseido group's total sales volume on Tmall increased by 91% over the same period last year.

New forces in the sinking Market

According to the statistics of the National Bureau of statistics, according to the location of the business units, the retail sales of urban consumer goods in the 1-11 months were 318614 billion yuan, an increase of 7.9% over the same period last year; the retail sales of rural consumer goods amounted to 54259 billion yuan, an increase of 9%, and the rural growth rate was higher than that of the urban areas.

China's consumer market has undergone tremendous changes in the past ten years. The annual disposable income of urban households has increased from less than 140 thousand yuan to 14~30 million, and the demand of residents has begun to pursue higher quality consumption from the necessities of life. During this period, the consumption contribution of China's rural population was relatively low, and almost all consumption growth came from cities.

McKinsey points out that urban consumers contribute more than 60% of GDP growth to China, but this shows that there is great potential in the low and middle cities and rural markets.

At any time and anywhere, China's consumer behavior is being differentiated, from the collective growth of the past consumer groups to a more personalized and differentiated consumption mode.

In the first tier cities, because of the high cost of living, some are more rational, paying for quality rather than social recognition; some are more smart and pursue the highest price performance; others are more cautious, reduce expenses and take precautions. Consumption classification, thousands of thousands of faces.

At the same time, a new force of consumption has sprung up in the 234 tier cities of China. They are represented by young women in cities of the second tier and below. This group is not concerned about the cost of living or future savings, and has a strong desire to buy. These middle and low line cities, "young shopping people", have contributed to the sustained and substantial growth of China's consumer spending.

This group also has more free time than young people in big cities. They often end their work at five or six p.m. and return home. The commuting time is much lower than that of consumers in big cities. Therefore, they have more free time to eat out, chase the latest trend, buy high-end products, improve the quality of life and social status. In McKinsey's survey, the group accounted for only 1/4, but it contributed nearly 60% of the growth of consumer spending in 2018.

Consumers in the middle and low line cities are becoming increasingly important, and are closely related to the rise of Jingdong, Tmall, and many other electronic business platforms. To some extent, the electronic commerce platform helps brand dealers extend their sales channels to the low level cities, and promotes the consumption of rich young people in the low level cities.

"We feel that the three or four tier city is an important growth point for the future, and there are many opportunities and space." Feng Qiyao, President of Yat Sen's new retail business division, told the twenty-first Century economic report.