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Online shopping festival to boost domestic consumption

By Xinhua (China Daily) Updated: 2014-11-10 09:29

Premier Li Keqiang's recent comments on the role domestic consumption has to play in the economy are well timed as China's annual "Nov 11" 24-hour online shopping marathon is just around the corner.

Nov 11, widely recognized as "Singles' Day", has become China's biggest annual commercial holiday and a huge e-commerce success story, with thousands of discounts and record-breaking sales.

Online shopping festival to boost domestic consumption

Last year, Alibaba Group Holding Ltd, China's e-commerce giant and the original promoter of Singles' Day, recorded a 83 percent year-on-year increase on its two online platforms - Tmall.com and Taobao.com - with sales reaching 35 billion yuan ($5.69 billion) thanks to the shopping carnival.

According to State-run broadcaster CCTV's latest online survey, among the 5,584 users registered with real names, 82 percent submitted budgets for the upcoming shopping festival, with most budgets recording year-on-year increases. Laptops and clothing remain the most desirable categories.

Alibaba's performance shows how much China's online consumption, a key growth driver in the central government's outlook, is booming.

The premier, who was speaking at a State Council meeting on Oct 29, highlighted the importance of boosting domestic consumption to raise economic quality and efficiency.

"Among the driving forces for growth, consumption has the largest scale and the closest bearing on people's livelihoods," according to the meeting.

Li said China must make full use of all market forces to bolster supply and promote the expansion and development of domestic consumption, which will in turn push development of new industries forward and boost economic growth.

Higher incomes, a better social security system and stronger consumer protection will help strengthen consumption's role as a driver of growth, said Li.

The statement pinpointed the major sectors that could boost consumption, including information-related products (such as mobile Internet); green and energy-saving products; housing; tourism and leisure; education; and elderly care.

Premier Li specifically drew attention to the success of the Singles' Day business model, while stressing that supporting new industries and e-commerce was paramount to growth.

This is not the first time Li has lauded online consumption.

Alibaba Chairman Jack Ma met with Li in November, 2013, and said that Nov 11 had become a Chinese "shopping day", just like Christmas shopping season.

Phasing out obstacles and cutting down costs in sectors like logistics, express delivery and online shopping will stimulate new growth potential, said the government work report delivered by Li in March.

HSBC chief China economist Qu Hongbin said that measures taken by the State Council signalled a keenness to support consumption.

Amid the slow global recovery, which offers limited room to expand exports, the government is aware that new growth drivers are needed.

Faster consumption, he said, can only be achieved gradually as a result of fairer income distribution, as well as new laws to protect consumers' rights and enhance their consumption experience.

"Achieving these will help the economy along its transition path, better deal with challenges over the next few years and achieve a more balanced growth trajectory over the medium term," said Qu.

Online shopping festival to boost domestic consumption
Online shopping festival to boost domestic consumption
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