Economic Watch: China's consumption gathers steam amid epidemic gloom

Source: Xinhua| 2020-02-21 19:40:25|Editor: huaxia

BEIJING, Feb. 21 (Xinhua) -- Despite the bite of the novel coronavirus outbreak, market players in China are braving the epidemic with quicker steps to upgrade their products and services to bet on a consumption boom after the epidemic ends.

Since the beginning of the holiday, retail giant Carrefour has seen order volume in vegetables and fruits increase over 600 percent year on year thanks to its boosted services to deliver within one hour for consumers from zones of less than 3 km.

The firm's departments in operation, supply chain and procurement have coordinated to ensure daily necessities' supply, with thousands of staff transferred temporarily to aid delivery work.

"Facing the outbreak, it is a whole different ball game for fresh food retail," said Tian Rui, CEO of Carrefour China.

Besides retail, the country's consumption industry is gathering transformation steam across the board thanks to recovering logistics and businesses, as well as supportive policies.

Enterprises in retail and catering sectors were encouraged to run outdoor stalls and open-air markets and use group purchases, according to a circular released by the Ministry of Commerce (MOC).

The circular also stressed efforts to boost online consumption, guide e-commerce firms to better meet people's new demands with big data and expand online sales.

Industrial giants are taking the lead in business adjustments, such as the rollout of non-contact delivery services and the promotion of virtual reality salesrooms and online product launches.

In one of the hardest-hit sectors, many restaurants take to food delivery to keep business going. Some even put their chefs on livestreaming platforms to pitch dishes or sets of half-prepared ingredients while offering cooking tips.

For China, a broad market with nearly 500 million online shoppers, e-commerce accounted for 24 percent in the retail sector and held a higher proportion among young people, said Ira Kalish, the chief global economist of Deloitte Touche Tohmatsu Limited, noting that China is the most important market for consumer-facing companies worldwide.

In response to the effects of COVID-19 on China's consumption, MOC official Wang Bin said at an online press conference that it would not dent the long-term stability and continuous upgrade of China's consumer market.

Wang estimated the epidemic impact to peak in February and consumption to bottom out in March, while the market would recover in the second quarter and further pick up in the latter half of the year.

The outbreak will only dampen short-term consuming demands, and would not drain the sector's growth momentum, said Guotai Junan Securities in a research note. "However, the market landscape might change, as it will be the survival of the fittest."