Stable and improved economic structure can promote consumption upgrading
In the recent period, whether China has experienced the escalation of consumption or the downgrade of consumption has been debated in public opinion.
In fact, this is about the different dimensions of consumption, from the consumer environment, consumer culture, and the changes that are taking place in the macro economy.
The discussion about consumption downgrades or consumption upgrades is actually caused by changes in business models. For example, a group-buying APP “spreads more and more” has emerged, and its core competitiveness is low prices. Earlier, Netease carefully selected the ODM supply chain model to provide customers with products that are considered to be cost-effective, that is, products to be branded, without brand premium, but the style and quality are almost the same as branded goods.
This practice of stimulating sales through price competition has been popular in China in recent years, but it reflects changes in production and sales, rather than changes in demand. Whether it is oversupply at the production end or supply chain and service improvement at the retail end, it will directly cause price changes and price competition. This cannot be considered as a result of “demotion downgrade”.
The consumer side has indeed undergone tremendous changes. First, there is a structural differentiation in spending power. In first- and second-tier cities, too high housing prices cause people who have just bought a house to take on excessive credit, which has a crowding out effect on consumption. Young people will also reduce their consumption expenditure because of excessive rents or down payment for home purchases; on the other hand, those The middle-aged and older people who bought the house earlier, especially those who have a large number of investment houses, have a wealth effect on them, which stimulates consumption and shows the demand for consumption upgrade.
Second, the consumption structure has changed significantly. In the context of a sharp rise in housing and car ownership, consumption distribution has changed on the basis of stable purchasing power (income), and consumption expenditures such as education, medical care, and tourism have increased substantially, while the proportion of consumption of food, tobacco, clothing, and other necessities has been increasing year by year. Going low, this is actually the process of upgrading consumption. Because the former spends more, the latter has a price competition because of the lower proportion of consumption.
Finally, the concept of consumption has changed. People began to pursue rational consumption. In the past, people’s consumption focused on factors such as brand, quality, experience, taste, etc. In the rational consumption culture, it is not to continue to pursue all the elements, but to have higher requirements for certain elements and lower requirements for other elements. . This phenomenon can also be explained by “personalization”, and each person decides that the factors of choice no longer follow the standard of social unification. The follow-up consumption and excessive attention to brand identity are phenomena in the primary consumer culture. Personalization means the upgrading and maturity of Chinese consumer culture.
Will consumption be downgraded? In fact, this is also an objective pressure. Therefore, it is necessary to promote the distribution of justice, increase public services, provide confidence for low- and middle-income people, and enable them to consume and dare to consume.
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