Ten Highlights of China’s Commercial Sector 2022
14 January 2022
Fung Business Intelligence and the Expert Committee of the China General Chamber of Commerce are pleased to present the 19th edition of our annual Ten Highlights of China’s Commercial Sector report.
2021 is a year of recovery for Chinese businesses. Even though the COVID-19 pandemic continued to disrupt economies around the world, China has brought COVID-19 largely under control, which lays the foundation for the turnaround in commercial activities and consumer spending. By the end of 2021, China’s retail sales of goods have surpassed pre-pandemic numbers and the catering revenue has almost recovered to 2019 levels.
The year also saw continued evolution of pandemic-driven business models and practices. While community group buying platforms started to consolidate amid tightened regulation, the concept of “15-minute community living circles” focusing on community-based retail and local lifestyle services has received wide attention. Moreover, enterprises’ digital adoption continued to accelerate, with on-demand consumer retail and home delivery and experiential retail leveraging VR and AR technologies gaining increasing popularity.
2021 also marks the fresh start of a new era with the introduction of the 14th Five-Year Plan (2021-2025), which places greater emphasis on China’s domestic market (or “internal circulation”). The Chinese government rolled out a raft of supportive policies and initiatives, including efforts on improving the circulation system to further integrate rural and urban markets and to boost rural income and consumption, initiatives to develop five cities into international consumption centres, and measures to promote duty-free shopping in Hainan.
With input from more than 160 top-tier mainland experts, Ten Highlights once again identifies top trends of the past 12 months and anticipates what will shape China’s commercial landscape in the year ahead.
In 2022, three significant factors will be the continued rise of China’s middle class, the pursuit of green development, and the promotion of “common prosperity”. Chinese consumers, led by the younger generation, are flocking into more sophisticated, high-quality, and novel products and services, especially those offered by home-grown brands. There is also a green transformation in the commercial sector. Many commercial and trade firms have started to “go green”, and consumers increasingly embrace environment-friendly goods. Besides, the Chinese government is committed to expanding rural consumption and rural e-commerce. These developments will open up new opportunities for local and foreign businesses alike.
The ten highlights forecast for 2022 are summarized below.
1. Promoting common prosperity through high-quality development of the circulation sector and increasing rural consumption
2. Consumption upgrading continues as the consumer market steadily rebounds after COVID-19
3. Commercial sector aims for comprehensive green transformation to support China’s carbon dioxide peaking and carbon neutrality goals
4. China to develop international consumption centres and promote duty-free industry
5. China is embracing local homegrown brands, fuelled by young consumers’ increasing spending power
6. Community-based businesses gradually transform into one-stop “retail + lifestyle” destinations
7. More resources allocated towards building a modern rural distribution system and further integrating urban and rural markets
8. China’s catering market sees stable recovery with accelerated digitalization and innovation efforts
9. Continuous innovation and digitalization drive further transformation and reforms in the retail industry
10. Business environment for physical retail is improving; e-commerce enters an adjustment phase
For Ten Highlights of the previous years, please visit here.