Holiday economy reflects China's tremendous consumption potential

Spurred by the accelerated application of new technologies and the emergence of new business forms, the huge consumption potential of China's burgeoning consumer market was vividly revealed during the recently concluded May Day holiday.

Photo shows people of the Miao ethnic group performing in Leishan county, southwest China's Guizhou province. (People's Daily Online/Li Tong)

Overall consumption witnessed a period of explosive growth during the five-day holiday. On May 1 and 2, online transactions through the China UnionPay network rose by 6.9 percent compared with the same period in 2019.

Nearly 729,000 items were sold at the duty-free outlets in south China’s Hainan province between May 1 and 3, with total sales revenues edging up to reach 485 million yuan ($75.32 million), according to Haikou Customs, which oversees the offshore duty-free shopping business in the province.

Thanks to the rapid application of new technologies, such as 5G, big data, cloud computing, and artificial intelligence, the supply-demand relationship in China’s consumer market is undergoing profound changes, Wang Qing, chief macro-economic analyst with Golden Credit Rating, a major credit rating agency in China, told People’s Daily Online.

New consumption demand has been stimulated through better consumer experiences, new consumer scenarios and other methods, Wang added.

Wang also pointed out that new types of consumption, as represented by smart tourism and online consumption, were expected to have been the key highlights during the holiday.

A woman surnamed Chen, who works in southwest China's Chongqing municipality, is just one of the beneficiaries of these new technologies, and her holiday activities were enriched to a large extent even though she decided to stay home.

The woman said she enjoyed a colorful holiday life since she had easy access to smart supermarkets and restaurants that adopted these kinds of new technologies in her neighborhood, permitting her to pursue her hobbies through online courses and take virtual tours of the online exhibition halls at some museums.

Photo shows tourists visiting an ancient cultural street in north China's Tianjin municipality during the May Day holiday. (People's Daily Online/Chen Shiyi)

For a fitness enthusiast surnamed Zhang, from north China's Hebei province, smart wearable devices became a necessity for him, having engaged in some long-distance rides along with his friends during the holiday.

Meanwhile, the widespread application of new technologies has spawned new business forms, including intelligent retailing and online education, and has accelerated the transformation of traditional industries.

For instance, some brick-and-mortar stores have accelerated the pace of digitalizing their operations, applying the use of data analysis technologies for personalized customization and flexible production, while increasing the frequency of interactions with consumers through WeChat mini-programs.

Pro-consumption measures rolled out by local governments during the holiday were also paying off. Consumption expenditures exceeded 2 billion yuan in just two hours during a shopping festival that kicked off on May 1 in Shanghai.

Photo shows tourists sightseeing at a scenic spot in central China's Hubei province. (People's Daily Online/Yu Lu)

The growth of rural consumption was also a highlight during the holiday. Data indicates that the total number of online searches for rural homestay hotels in Beijing during the May Day holiday this year was 5.2 times higher than the rate for the same period last year.

"Rural consumption is vital for the expansion of the domestic market," said Zhao Ping with the Academy of China Council for the Promotion of International Trade, forecasting a huge rural consumption potential owing to the continued development of rural tourism and the commercialization of agricultural products.

For the next step, China will need to increase people's spending power by boosting their incomes and effectively stimulating consumer demand to further promote consumption, Wang Qing pointed out.