Shanghai ramps up efforts to boost consumption

Shanghai's per capita GDP has now surpassed $27,000 and new consumption forms have become a crucial driver for tapping latent domestic demand and promoting consumption transformation.

Residents are showing rapidly evolving consumption concepts and behaviors, said Hua Yuan, vice-mayor of Shanghai, during his keynote speech at the China Development Forum in Beijing on March 25. These consumption shifts manifested in Shanghai's 2023 retail sales performance. The city achieved total retail sales of 1.85 trillion yuan ($256 billion) in consumer goods worth, a 12.6 percent year-on-year increase and a historic high. Service consumption reached 1.3 trillion yuan, surging 29.2 percent and contributing nearly 60 percent to the total social consumption expenditure.

"New consumption forms have become a key driving force propelling Shanghai's development into an international consumption hub," he said.

Hua stated that personalized consumption sectors, such as immersive entertainment, medical tourism, and other niche offerings, are emerging due to increasingly segmented consumer demands. He outlined multiple trends that are shaping Shanghai's consumption landscape.

Accelerated integration of commercial, tourism, cultural, and sports domains is creating new consumption hotspots. Events such as performances, competitions, and exhibitions are providing fresh service consumption opportunities in commercial complexes.

Rapid digitalization, driven by 5G, VR, AI, and other technologies, is continually expanding the possibilities for new consumption models. At the same time, traditional businesses are enhancing their market reach via digital transformation.

Consumption is becoming more globalized. Hua stated that Shanghai has over 13,000 restaurants featuring global cuisines and is a significant hub for major international sporting events. Additionally, domestic cultural products in industries such as anime and gaming are gaining popularity overseas.

Shanghai has become a popular location for product launches, with over 1,000 inaugural store openings each year for the past three years. Additionally, there are over 3,000 new global and domestic brand product premieres and exhibitions every year.

Hua also highlighted Shanghai's powerful rebound in cultural, tourism, and sports-related consumption.

In 2023, the city's inbound tourism foreign exchange revenue reached $6.19 billion. Its international tourist resorts welcomed 25.63 million visitors, a 44 percent rise from 2019. The performing arts market also saw a resurgence, with over 30,000 commercial shows held citywide, including 194 large-scale productions.

Sports consumption is booming, with 118 sporting events held in 2023 generating 3.71 billion yuan in direct consumption and catalyzing 12.86 billion yuan in related industrial impacts. In 2024, Shanghai will host 175 major national and international sporting spectacles, including the Formula 1 Chinese Grand Prix 2024 and the Olympic Qualifier Series.

Shanghai's senior care industry has huge potential for development, Hua said, revealing that the total output of the city's senior care industry exceeded 300 billion yuan in 2023. New models in senior care like home-based care and community-based care are accelerating. The senior care service system continues to improve.

Hua also noted that with the completion of the high-speed rail network in the Yangtze River Delta region, both passenger flow and transportation revenue on rail lines have maintained rapid growth. Statistics show that during this year's Spring Festival period, the amount of inbound consumption in Shanghai totaled 15.55 billion yuan, up 21.6 percent year-on-year. The recovery of the cruise industry has also picked up momentum.

Shanghai is also working to promote green consumption concepts among brands, malls, and consumers. Currently, 79 large commercial complexes over 100,000 square meters in Shanghai have obtained national green building certifications. Over 260,000 consumers benefited from the subsidies when purchasing green-certified home electronics over the past two years and supportive policies stimulated over 2.1 billion yuan in appliance sales.

To sustain the consumption boom while enhancing quality, Shanghai will further enrich the supply of products and services, encourage innovation, and improve consumption environments, Hua said.

The city aims to solidify its status as an international venue for new consumption brands and pioneering business models while setting global consumption trends. World-class commercial districts will be developed as highlighted areas, with customized plans to create an international metropolitan commercial landscape.

Payment services will also be optimized to facilitate domestic and cross-border transactions. Efforts will be made to attract more inaugural product launches and premieres, capitalizing on Shanghai's established strengths.