Whether consumer goods can maintain a growth rate higher than GDP in 2023 and continue to play the role of the economic engine with the domestic circul

ation as the main body is still a stressful problem.

Exclusive content, first published in Yicai

In 2023, as the first year of restoring normal order after the new crown epidemic, the intermediate year of the 14th Five-Year Plan (2021-2025), and the first

 year of the "Outline of the Strategic Plan for Expanding Domestic Demand (2022-2035)" issued by the CPC Central Committee and the State Council in De

cember 2022, the performance of the consumer market has become the key to influencing various industrial links and affecting the overall economic situation.

The "June 18" promotion event coincided with the middle of the year, and major e-commerce platforms joined hands with various merchants, including large

 brands and various small and medium-sized brands or retailers, to carry out a variety of promotional activities, striving to fight a beautiful performance soari

ng battle in the middle of the year. So, after the "June 18" warm-up that began in late May, what are the results of the major platforms? From the performance

 point of view, how to make some evaluations, forecasts and countermeasures for this year's consumer market? Let's start with the consumption and supply da

ta for the first quarter of 2023.

According to data from the National Bureau of Statistics, in the first quarter, the total retail sales of consumer goods reached 114922 billion yuan, an increase 

of 5.8% year-on-year, and final consumption expenditure contributed 66.6% to economic growth. Among them, the national online retail sales were 3,286.3 b

illion yuan, a year-on-year increase of 8.6%; The online retail sales of physical goods amounted to RMB2,783.5 billion, an increase of 7.3%, accounting for 2

4.2% of the total retail sales of consumer goods. Vehicle production totaled 6.21 million units, down 4.3% y/y, and sales totaled 6.076 million units, down 6.7

% y/y. Among them, the production and sales of new energy vehicles increased by 27.7% and 26.2% respectively. The sales area of commercial housing was 

299.46 million square meters, down 1.8% year-on-year. The sales volume of commercial housing was 3,054.5 billion yuan, an increase of 4.1%.

On the other hand, from the supply side, that is, the sales revenue data of enterprises, the sales revenue of enterprises in the first quarter of 2023 increased by 

4.7% year-on-year. The sales revenue of contact services such as accommodation and catering, recreation, sports and entertainment, and resident services inc

reased by 22.8%, 13.7% and 9.4% year-on-year, respectively, exceeding the pre-epidemic level in 2019. In the first quarter, the sales of upgraded goods incre

ased significantly, and the retail sales of gold, silver, jewelry and cosmetics products above designated size increased by 13.6% and 5.9% respectively.

From the supply and demand data of the first quarter, combined with the data of the same period before, there are the following trends:

(1) Final consumption is still the main driving force of economic development, with a year-on-year growth rate slightly higher than GDP growth (4.5%), play

ing a driving role in driving economic growth.

(2) Online retail sales led the growth rate, compared with the growth rate of online retail sales in the first quarter of 2022 (6.6%), the growth rate was slightly

 higher, showing consistent growth potential, which also shows that online consumption habits have been increasingly consolidated and gradually invaded the

 share of offline consumption. For offline stores, it is necessary to embrace online and achieve online and offline integration.

(3) Compared with the same period of the previous year, the growth rate of online retail sales of physical goods decreased slightly (8.8%), accounting for a sli

ght increase, from 23.3% to 24.2%. Despite this, the growth rate has declined, and before the pandemic, in the first quarter of 2019, online retail sales of phys

ical goods grew by 21%, accounting for 18.2%. This shows that the growth rate of physical online retail sales has declined, but the proportion of social zero h

as steadily increased. Further, physical goods accounted for 84.7% of online retail sales, compared with 83.6% in the same period last year and 79.4% in the s

ame period in 2019. It can be seen that the production ratio of physical products sold online has gradually increased, which also shows that people are increas

ingly choosing to buy online when buying physical products.

(4) The growth rate of the main categories of the service industry, accommodation, catering, recreation, sports and entertainment and resident services is high

er than the growth rate of physical online retail sales. This shows that the potential of service consumption is greater, and it is also the main category that can 

promote growth next. At the same time, due to the characteristics of contact, the service industry also represents offline consumption to a certain extent. In th

e future, offline development of experiential consumption is a direction.

(5) The growth of retail sales of gold and silver jewelry above the designated size is optimistic, and the growth rate of cosmetics is average, which shows tha

t non-essential goods, especially some "durable" hedonic products - gold and silver jewelry is a durable hedonic physical product that can be sustainably ow

ned, high priced, and not easy to consume, with high market potential. This also reveals that in the context of China's annual household savings reaching 17.

84 trillion yuan (13 trillion regular savings and more than 4 trillion current savings) in 2022, compared with lower-value, consumable hedonistic products - 

cosmetics, high-end physical products represented by gold and silver jewelry may be a breakthrough point for activating savings into consumption.

By extension, luxury sales confirm this. According to the first quarter of 2023 financial reports announced by global luxury groups LVMH and Hermès, its 

revenue and growth rate showed a double-digit trend. In terms of global markets, LVMH sales increased by 17% year-on-year to 21 billion euros, and Herm

ès' consolidated revenue increased by 22.3% year-on-year to 2.28 billion euros. In this regard, the contribution of the Chinese market cannot be ignored: for

 LVMH Group, the Chinese market accounted for 80% of the revenue in the Asia-Pacific region excluding Japan, and for Hermès, the revenue of the Asian r

egion excluding Japan increased by 23%, and the demand in the Greater China market was strong.

Let's take a look at the achievements of major platforms during the warm-up period of the "6•18" promotion. According to the 618 "home consumption" dat

a released by Suning.com on June 1, during the first round of outbreak, the customer flow of Suning.com stores nationwide increased by 147% year-on-yea

r, the order volume of "one-stop consumption" of home appliances increased by 132% year-on-year, and the sales of high-quality home appliances above 10,0

00 yuan increased by 103% year-on-year. Green and intelligent and cutting-edge trend products for home appliance consumption have become an important g

rowth point. At 20 o'clock on May 31, Taobao Tmall "618" officially opened. Data show that between 20:00 and 24:00 on May 31, within four hours of the la

unch of Taobao Tmall "618", the sales volume of 84 fresh food categories such as buffalo milk, functional candy, light meals, sparkling and champagne wine 

quickly exceeded last year's whole day, and the turnover of 122 brands' live broadcast rooms increased by 100% year-on-year. These diet-related categories p

erform well and are also important online physical consumer goods categories. As of 24:00 on May 31, 2023, the sales of the flagship store "618" on the Tma

ll platform NetEase Yanxuan increased by 100% year-on-year. According to the data of the Jingdong platform, from May 23 to May 31, during the pre-sale pe

riod of Jingdong 618, as of May 30, the pre-sale of major appliances was 55 billion yuan; Pre-sales of notebook computers reached 4.1 billion yuan; The pre-s

ales of facial skin care categories reached 1.3 billion yuan, and the pre-sales of perfume and makeup reached 110 million yuan. At the same time, the turnover

 of JD International exceeded the turnover in the first two hours of last year's opening, and the turnover of 3 categories such as cross-border drinks, cross-bord

er mobile phone communications, and cross-border luggage and leather goods increased by more than 100% year-on-year, and the transaction volume of 51 br

ands such as Aitami, Nintendo, Childhood Time, and Coach increased by more than 100% year-on-year.

On the whole, under the superposition of various promotional stimuli such as pre-sales and coupons, all platforms performed well during the "6•18" promotion,

 and almost every platform and category reached a year-on-year increase of more than 100%. Compared with the data of the same period last year, the order am

ount of JD.com's entire network during the 618 villages in 2022 exceeded 379.3 billion, an increase of about 10% compared with 2021, and the comprehensive 

growth rate of comprehensive e-commerce and live streaming e-commerce reached 13%, of which the comprehensive e-commerce platform increased by 0.7% 

year-on-year, and the live e-commerce platform increased by 124.1% (star map data). In 2021, during the 618 promotion, the transaction volume of the whole n

etwork increased by 26.5% year-on-year. During the 618 promotion period in 2020, the cumulative turnover of JD.com reached 269.2 billion yuan, a year-on-ye

ar increase of 33.6%, Suning connected to Douyin with a growth rate of 129%, and Tmall placed orders of 698.2 billion yuan. Although this year's "6.18" has n

ot yet reached its climax, from the opening rhythm and the data of the past years, after consumers have experienced more than 10 years of "big promotion" bec

oming more rational, market expectations and consumer confidence are insufficient, savings growth is high, consumption willingness is insufficient, and major

 e-commerce platforms and offline stores in order to cope with the pressure of growth increasing promotional efforts, especially the use of more direct price red

uction promotions and other factors, this year's 618 promotion may be difficult to get better performance than last year.

Although this year coincides with the 19th anniversary of the establishment of Jingdong Mall and the 20th year of Taobao's establishment, this year's "618" is k

nown as "the largest investment in the whole industry" and "the largest investment in history". As a mid-year e-commerce promotion, 618 is a promotion campa

ign launched by JD.com in 2008 to commemorate JD.com's store anniversary (established in Zhongguancun on June 18, 1998). Then, in 2009, Taobao Mall (Tm

all) opened the Double 11 event on November 11. Since then, 6.18 and Double 11 have become two battles for major e-commerce platforms. In the past, the sho

pping carnival that could arouse the enthusiasm of consumers was once sufficient to arouse consumers' enthusiasm, but as more than ten years passed, various ga

mes were familiar to consumers, and at the same time, the general needs of the consumer side were well met, and the growth became increasingly weak. Perhaps,

 returning to normality, returning to rationality, returning to innovation and consumption to promote a better daily life is the future of sustainable growth of e-com

merce and retail. We do not pursue temporary high growth, but maintain stable growth all the time.

Actually, it's not easy. According to the first quarter financial reports released by Alibaba and JD.com, JD.com's revenue was 243 billion yuan, an increase of 1.4%

 over the first quarter of 2022, the lowest growth rate in the past; Alibaba (as of March 31, 2023, which the company said was the fourth quarter of the previous ye

ar) generated revenue of 208.2 billion yuan, up 2% year-on-year. The growth rate of less than 2% in the first quarter cannot be said to be optimistic. The problems

 reflected in the circulation field are precisely the problems of the supply side and the demand side. Fundamentally, if it is limited to the premise of the domestic c

irculation and does not consider the export and international market demand, then the supply side is the transaction volume reached by enterprise income and the 

demand side, that is, the transaction volume of circulation enterprises. In this way, this year's consumer market is still not optimistic.

Throughout the past 20 years, the growth rate of total retail sales of social consumption, which reflects consumption, has been in sync with and slightly ahead of 

GDP growth. This is an inevitable trend for China's consumption to increase synchronously with economic development and per capita disposable income, and g

radually become the driving force of economic growth. However, with the maturity of China's economic development, the GDP growth rate began to fall below 

7% for the first time in 2015, and China's economy changed from high-speed growth to high-quality growth; In recent years, due to the impact of the new crown

 epidemic and the international situation, new consumption methods such as online live streaming have developed rapidly, but comprehensive e-commerce and o

ffline retail have been greatly impacted. In particular, as offline retail such as domestic shopping malls enter the stock era, shopping malls invested and construct

ed in the early stage are gradually put into use, the overall market tends to be saturated, superimposed on consumer confidence and insufficient economic expect

ations, and the operation and development of offline retailers are also affected. According to the statistics of Winshang data, as of December 31, 2022, there wer

e 5,685 shopping malls in stock nationwide, with a volume of 503 million square meters. According to the data of China Business Magazine, although it is far lo

wer than the per capita 2.15 square meters in the United States, it is close to the same as Japan's per capita area of 0.365 square meters. In Shanghai, according t

o the "Shanghai Shopping Center 2022-2023 Annual Development Report" released by the Shanghai Shopping Association, the total number of shopping malls 

above 30,000 square meters in Shanghai will exceed 400 in 2023. In 2022, data from Winshang shows that the stock of 30,000 square meters of shopping malls 

in Shanghai will reach 26.65 million square meters, conservatively estimated, and the per capita shopping center is 1.08 square meters, which is close to the lev

el of New York. All these show that the stock of offline shopping malls is increasing, due to the crowding of online consumption and the lack of consumer conf

idence and behavior, the operation of merchants on the supply side and the production enterprises behind them is not optimistic.

Nevertheless, development is the last word. Under the premise of increasing savings of Chinese residents, it does not reflect the lack of absolute income (althou

gh it is reflected in the slowdown in income growth), but the problem of consumer confidence and structure, and after the basic needs of people's lives are met, 

after the short-term attraction and stimulation of new consumption and new retail over the years, consumers are increasingly returning to rationality, and the bur

nout of basic material consumption and low-level entertainment consumption or spiritual consumption. The same is true in terms of the growth rate of commod

ities (housing, automobiles) and the pullback in prices. On the other hand, in March 2023, the national consumer price increased by 0.7% year-on-year. In Marc

h, national consumer prices fell 0.3% month-on-month. In April, the core CPI, which excludes food and energy prices, turned 0.1% m/m and 0.7% y/y from flat

 in the previous month, the same rate as the previous month. From a month-on-month perspective, the CPI fell by 0.1%, a decrease of 0.2 percentage points fro

m the previous month. On the one hand, the CPI data reflects the stable domestic economic situation and stable prices, on the other hand, the decline in CPI larg

ely reflects the lack of consumption momentum, that is, insufficient demand. When the supply is sufficient, it leads to the stability or even decline of the price. T

his seems to be a negative signal for the boom in the consumer market.

Whether consumer goods can maintain a growth rate higher than GDP in 2023 and continue to play the role of the economic engine with the domestic circulatio

n as the main body is still a stressful problem. From the basic situation of income and expenditure, in the first quarter, the growth rate of per capita disposable in

come of national residents fell during the same period (3.8%), and the growth rate of per capita consumption expenditure also fell (4%) during the same period, 

slightly higher than the growth rate of income. The growth rate of per capita disposable income of urban residents (2.7%) fell during the same period and was lo

wer than that of rural residents (4.8%), although the latter also fell during the same period. The growth rate of per capita consumption expenditure of urban resid

ents fell during the same period (3.5%) and was lower than that of rural residents (4.2%). From the perspective of the long-term goal of common prosperity thro

ughout the country, this is a trend in line with the national development strategy and will help narrow the gap between urban and rural areas. However, whether 

it is income or expenditure, the growth rate has fallen during the same period, and it is difficult to achieve the target of 5% growth rate for the whole year in a d

omestic cycle-based economic cycle.

This poses greater challenges to the work in all aspects of the second half of the year. Although we only analyzed the economic data of the first quarter and the 

performance of the platform pre-sale period of the June 18 promotion, the last two quarters of the year tend to perform well; However, compared with the same

 period last year, the data has fallen back. Therefore, how to promote the recovery and prosperity of consumption next requires greater efforts by the governme

nt, enterprises and businesses, as well as social organizations - the method of mainly stimulating money and attracting promotional activities may not be effecti

ve. Combined with the aforementioned category analysis, it can guide merchants to develop high-quality consumer goods, rather than hitting the market on pri

ce. At the same time, it is crucial for individual residents' perceptions of consumption, the role of consumption in promoting production, and the recognition th

at consumption as a necessary way and way of productivity investment can lead to the improvement of human capital and income improvement. This can be re

garded as the category of consumer education in a broad sense, which will be far-reaching and fundamental.