Sinking The Market, Raising A New Consumption Boom

Consumption has always been the pinnacle of national economy. Under the new development pattern of "double cycle", expanding consumption has a strategic position, and the reform of demand side management and supply side is advancing continuously.

Among them, the market demand of rural economy is more exploitable, the supply quality is more promotable, and the development momentum is more cultivable. Especially with the comprehensive victory of poverty alleviation and rural revitalization, the rural market has entered a new development stage of accelerating quality improvement and transformation.

? ? ? The emerging sinking market has also become a hot topic in the past two years. In this year's NPC and CPPCC sessions, rural economic development has also been highly concerned. Rural e-commerce has been mentioned in the bills and proposals of several deputies. Zeng Na, deputy to the National People's Congress, proposed to innovate the mode of consumer assistance and vigorously develop rural e-commerce; Zhang Jindong, the NPC deputy and chairman of Suning holding group, suggested that the government should promote the development of rural e-commerce The digital empowerment of village small and micro retail enterprises will lead to the upgrading of rural consumption quality and release the rural consumption potential.

These proposals reflect the urgent needs of rural e-commerce development. Industry insiders pointed out that while the scale of callers has reached new highs in recent years, the development of e-commerce between urban and rural areas is not balanced. Some rural areas have not enjoyed the convenient services of e-commerce and have not participated in the "dividends" brought by e-commerce development. Rural e-commerce still has broad prospects for development.

Policy support for rural e-commerce

With the continuous development of the Internet economy, the new traffic in the first tier cities is exhausted and the cost of acquiring customers is rising day by day. The sinking market with congenital population base advantage has become the focus of the public. Before that, Internet enterprises have been "running horses to encircle the land", which has promoted the popularization and demand release of rural e-commerce to a certain extent, but the overall market space still needs to be explored.

According to the data released by the National Bureau of statistics, from January to December 2020, China's retail sales of consumer goods in cities and towns will reach 33.91 trillion yuan, compared with 5.28 trillion yuan in rural areas. In other words, although the rural resident population is more than 500 million, accounting for 40% of the total national population, the retail sales of rural consumer goods only account for 15.58% of the total retail sales of social consumer goods.

It can be seen that there is a huge gap between urban and rural consumption, and the rural consumption market is still a blue ocean market. Prior to this, rural e-commerce has received a series of policy support. In the two sessions of the National People's Congress last year, "supporting e-commerce express delivery to rural areas and expanding rural consumption" has been written into the government work report. The "14th five year plan" and the draft of the long-term goal outline in 2035 put forward to improve the consumption network of urban and rural integration, expand the coverage of e-commerce into rural areas, improve the consumption environment of counties and promote the upgrading of rural consumption.

On the one hand, with the continuous implementation of the policy, rural e-commerce ushers in a new development opportunity, on the other hand, the rural retail market is also facing many challenges.

Zhang Jindong pointed out to the 21st century economic reporter that due to the lack of effective means to deal with the market, the traditional business model and the lagging retail supply system, there have been a long-term phenomenon of rampant fake and shoddy products, high quality and low price, and uneven service quality in the rural consumer market. The lack of effective supply of high-quality goods and services in the rural market and the inability to meet the needs of rural residents have become the main problem restricting the development of rural retail market.

At present, in China's vast rural sinking market, rural snack shops are still the main carrier of rural retail, and 6.3 million husband and wife shops in China account for 40% of the retail share.

Therefore, Zhang Jindong suggested that quality upgrading and experience upgrading should be taken as the main direction of rural commercial consumption upgrading, and the leading and leading role of large-scale retail entities integrating successful experience online and offline should be brought into full play. Through digital empowerment of rural small and micro retail enterprises, rural consumption quality can be promoted and rural consumption potential can be fully released.

It includes three aspects, one is the integration of online and offline channels to promote the upgrading of rural retail; the second is to speed up the training of rural e-commerce talents to consolidate the upgrading foundation of rural consumption; the third is to strengthen the supervision of rural consumption market to prevent the impact of overheated capital.

Retail supply chain reform

With the opening of sinking market space, e-commerce and retailers are also moving, aiming at the new demand of consumption upgrading in low-level cities.

Taking Suning as an example, Suning launched a new retail cloud business form in 2017, mainly aiming at the low-level county and town markets, rapidly copied stores in the form of franchise, and adopted online and offline dual line operation to help stores break the "flow anxiety". In the ecology of domestic retail giants, there are similar Jingdong convenience stores and tmall stores.

According to the data released by Suning, in 2020, a total of 8000 new retail cloud stores will be opened nationwide, with an overall growth of more than 100%, realizing a sales scale of 20 billion, and nearly 3200 new stores will be built, and the development will be accelerated this year.

A retail cloud shopkeeper in Xueyan Town, Changzhou, once told the 21st century economic report that since joining Suning's retail cloud store in 2018, the store turnover has reached 7 million yuan a year. It is reported that in 2020, the store's home sales will exceed 700000 yuan, with a gross profit of nearly 300000 yuan.

Behind the rapid growth, on the one hand, the user demand of the county and town market is changing in the direction of quality and diversification, on the other hand, retailers are upgrading the supply chain.

In terms of demand evolution, kitchen products are typical. Liu Huaili, vice president of Suning retail cloud group, said in an interview: "last year, in the county-level market, our overall kitchen and bathroom products sold more than 700 million yuan. However, from March this year, we found that small kitchen products such as soybean milk machine and steamer were popular, and it is estimated that the sales volume will be about 2.6 billion yuan this year."

White power is also a major consumer after the Spring Festival. Suning e-buy retail cloud data shows that from February 20 to March 5, 2021, air conditioning sales of more than 8000 retail cloud door stores nationwide increased by 245% year-on-year.

Liu Huaili also said that taking the home appliance market as an example, the macro policy of the supply side was to send home appliances to the countryside in 2009. At that time, it was mainly in the form of subsidies. Now, it is a more three-dimensional action. Two years ago, the county and town markets were mainly brand stores such as Haier Meidi Gree. However, from the perspective of supply, with the upgrading of consumption, it has been unable to meet the needs of users. The retail cloud has both e-commerce capabilities and offline stores, which is in line with the supply side demand change.

Different from the stores operated by Suning in the past, the retail cloud is expanding rapidly with the light-weight franchise mode. For the shopkeepers, they can join in as long as they pay a small amount of deposit, and the goods are provided by Suning supply chain. Store inventory can also be stored in Suning's warehouse, which will be delivered by Suning logistics after placing orders.

At the same time, retail cloud has carried out digital transformation for stores in counties and towns, including the management mode of supply chain, which is also a challenge for merchants. Liu Huaili talks about that, for example, the original clerks may only operate a dozen SKUs. Now, after the expansion of the supply chain, they need to operate a large number of SKUs and master new digital tools. All of these require training in retail operations.

It can be seen that from demand to supply chain and operation system, the retail of sinking market is undergoing new changes. The sinking movement of retail enterprises continues, and the hand to hand combat on the streets is becoming more intense. Ni Yuqing, reporting group of the National People's Congress and the National People's Congress of China Southern finance and economics all media group reports from Shenzhen

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