Mother Day’s spending shows growth potential

By Huang Ge Source:Global Times Published: 2019/5/12 21:50:41

More efforts needed to release buying power of migrants: analyst




Photo: Xinhua



A new generation of young mothers has become an emerging driving force behind domestic consumption during this year's Mother's Day, which fell on Sunday, as they focused more on the quality of spending to further tap the growth potential of the high-end retail market in China.

"The gift I gave my mom this year was a free trip to Japan," said Cai Xiaojie, who is in her early 30s and also the mother of a daughter aged 2.

"I wanted my mom to have some relaxation and experience something different after her retirement and a week-long trip to Japan will definitely make her happy," Cai told the Global Times on Sunday. Booking the trip online cost her about 5,000 yuan ($733), Cai said.

According to a recent report released by Ctrip, a domestic online tourism platform, the consumption upgrading of senior people is being influenced by their children. The report said 60 percent of those children have become more likely to spend money for their parents to travel.

The average outbound travel budget for an elderly woman is 5,152 yuan and the individual cost of a domestic trip was 1,879 yuan from January to May, the report said.

Apart from travel, this new generation of mothers aged 25 to 40 years old has become a driving force in consumption during some special occasions like a traditional Chinese festival, according to a recent report by the e-commerce platform jddj.com.

Their consumption on the platform rose 88 percent year-on-year in 2018, with spending on medical treatment and healthcare up 75 percent on a yearly basis, the report said, noting "they focus more on a balance of quality, efficiency and price."

Thanks to the consumption upgrading, young Chinese consumers are not restricted to gifts such as flowers and food. They also like more "expensive" items such as electronics, jewelry and healthcare products, a Shenzhen-based industry insider surnamed Du told the Global Times on Sunday.

The spending of young female consumers during the festival shows that sound growth potential persists in the Chinese market given the domestic economic pressure and global growth uncertainties, Du said.

China is expected to become the world's top retail market in 2019, surpassing the US by more than $100 billion, according to a report by New York-based research company eMarketer in January.

"The growth potential of domestic consumption is expected to be further released mainly through two ways - promoting high-end domestic consumption and advancing urbanization to release the buying power of migrant workers," said Tian Yun, vice president of the Beijing Economic Operation Association.

In previous years, as China's high-end market in sectors such as education, healthcare and sports couldn't meet the demand of some Chinese consumers, they spent a lot overseas, Tian told the Global Times on Sunday.

"If this portion of high-end consumption can be released in the Chinese market, it will contribute more to domestic economic growth," he said.

Consumption of luxury goods in the Chinese mainland accounted for 27 percent of residents' total spending in this segment in 2018, increasing from 2015's 23 percent, and the number is expected to reach 50 percent by 2025, read a report by Bain & Co in March.

Also, many Chinese cities have rolled out favorable policies to attract talent, aiming to tap the consumption potential for migrants, which is quite a large group, Tian noted. For instance, China has told local governments of cities with an urban population of 3 million to 5 million to ease restrictions for migrant workers, the National Development and Reform Commission, the country's top economic planner, said in early April. 

Retail sales rose 8.3 percent year-on-year to 9.8 trillion yuan in the first quarter, according to official data. In March alone, sales reached 3.2 trillion yuan, up 8.7 percent on a yearly basis.



Posted in: ECONOMY

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