China Consumption Market Expected to Reach $6 Trillion

China’s consumption is expected to grow to $6 trillion from the current $4 trillion in the next three years thanks to the development of e-commerce, according to JPMorgan Chase.
Consumption and innovation will serve as two major driving forces promoting economic growth of the country, noted Jing Ulrich, managing director and vice chairman of Asia Pacific at JPMorgan Chase, who recently attended the 2017 Fortune Global Forum held in Guangzhou, China, ecns reported.
According to China’s National Bureau of Statistics, consumption has contributed over 60% to the country’s economic growth in recent years. The figure was 64.5% in the first three quarters of this year, up 2.8% year on year, and 31.7% more than that made by capital flow.
Zhu Baoliang, chief economist at the State Information Center, predicted that given the stability of consumption demand, the country’s household consumption will experience more accelerated upgrading in the next year or two.
Ulrich said that increasing disposable income, the narrowing income gap and enhanced social security, are all factors affecting consumption. In addition, the changing age structure of the population and decreased household savings will also further drive the growth of consumption.
“In fact, innovation shares a close bond with consumption,” said Quan Heng, head of the Research Institute of World Economy of the Shanghai Academy of Social Sciences. As a driving force that promotes consumption growth, innovation will accelerate the structural upgrading of consumption through the new technologies, new forms and new modes it produced, Quan explained.
Chinese consumers have embraced facial identification and mobile payments to buy everything possible, drawn towards the efficiency and the novelty of semi-automated stores.
Ecommerce giant JD.com is the latest to branch into automation, announcing a tie-up last week with Hong Kong-listed developer China Overseas Land & Investment to build hundreds of self-serve convenience stores and 1,500 medicine dispensers across China.
In so doing, JD.com is chasing competitors such as Alibaba that are developing their own cashier-less outlets. Rising labor costs and high turnover among blue-collar jobs has price sensitive online retailers looking to apply logistics and online payment systems to automate shopping.
Some automated outlets are less like stores and more like walk-in vending machines. Chief among them is BingoBox, which this year installed 5,000 of its compact units selling snacks and fresh fruit across major Chinese cities.