Industry insiders see continuous consumption upgrading in China

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Business leaders from industries ranging from home appliance, food, and movie all see continuous consumption upgrading trend in China, according to a panel discussion on consumption on Thursday during Boao Forum for Asia.

Business leaders discuss China's consumption trend during one of the panels at the Boao Forum for Asia Annual Conference 2019. /CGTN Photo

Wang Junzhou, CEO of GOME Retail Holdings Limited, said there is a general trend of consumption upgrading in the home appliances industry, whether it's in big cities or small ones, which are driven by two factors.

One is the changes in consumer demand, he said. The whole industry has entered an era when people will replace their old home appliances if there are superior products with better design, quality or other selling points.

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Technology is the other driving factor, according to Wang. With the arrival of 5G technology and the realization of Internet of Things (IoT), the whole-home solutions, such as air and water purification systems, air conditioning and whole kitchen system will replace the current independent home appliances.

“Consumer demand and technology are mutually reinforcing,” he said. “Consumer demand will drive technological advancement, which will, in turn, promote consumption upgrading.”

Andy Pharoah, Senior Vice President of Mars, world's leading food manufacturer, said that Chinese consumers want to have better products and care about brands.

The company has been in the Chinese market for 30 years and saw rapid business growth. China is now its second largest market in the world, but Pharoah still sees great potential.

“Now we only take up six percent of the market share, and our goal is 15 percent,” he noted.

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James Wang, CEO of Huayi Brothers Media Corporation, one of China's largest film production companies, said that the past decade had seen dramatic consumption upgrading in this sector, with China growing into the world's second-largest movie market.

According to Wang, on average, one person watched movies twice in China last year, while the number was 0.1 times ten years ago. Meanwhile, China's box office has expanded over ten times over the period.

Consumption has become the most important driver for China's economic growth, which contributed 76 percent to the GDP growth in 2018.