Steady Revenue Growth Amid a Competitive Landscape

In the three months ending September 30, JD.com achieved net revenues of RMB 260.4 billion (USD 37.1 billion), marking a year-on-year increase of 5.1%. The growth was fueled by a resurgence in electronics and home appliances, alongside sustained momentum in general merchandise categories.

JD.com’s Chief Executive Officer Sandy Xu attributed this performance to the company’s ability to adapt to shifting consumer demands.

“In the third quarter, we played a crucial role in China’s government-backed trade-in programs, leveraging our advanced supply chain capabilities. This, coupled with robust user response to our Singles Day promotions, has strengthened our market position and laid the groundwork for sustainable growth,” Xu remarked.

Profits and Margins Reflect Operational Strength

JD.com recorded a significant boost in profitability. Net income attributable to shareholders surged by 47.8% year-over-year to RMB 11.7 billion (USD 1.7 billion), while operating income rose by 29.5% to RMB 12 billion (USD 1.7 billion). The company’s operating margin improved to 4.6%, compared to 3.8% during the same period last year.

This profitability was driven by efficiency gains across its extensive logistics network and economies of scale, which helped offset increased marketing and fulfillment expenses.

Strategic Business Initiatives Drive Engagement

JD.com’s Q3 performance was underpinned by several key initiatives that highlight its commitment to innovation and expansion across diverse sectors:

1. Government Trade-In Program: The company emerged as a pivotal player in China’s trade-in initiatives, operational in over 20 provinces. By integrating its logistics expertise, JD.com enabled customers to seamlessly trade in old appliances and electronics while benefiting from government subsidies. This program has been well-received by users and showcases the company’s ability to adapt to policy-driven market opportunities.
2. Fashion Expansion: Demonstrating its commitment to capturing the high-value fashion segment, JD.com welcomed flagship stores from luxury brands such as Balenciaga and Saint Laurent. This move not only expands JD.com’s product portfolio but also enhances its appeal to fashion-conscious consumers, fostering a new wave of growth in apparel and accessories.
3. Supermarket Milestone: Marking its 10th anniversary, JD Supermarket has become a cornerstone of the company’s retail strategy. With a focus on supply chain efficiency and competitive pricing, JD Supermarket continues to strengthen its partnerships with key brands, ensuring high-quality offerings for consumers.
4. Healthcare Advancements: JD Health made strides in enabling online payments through individual medical insurance accounts, now available in 12 cities. This innovation broadens access to healthcare services for millions, further embedding JD.com into the daily lives of its users.
5. Logistics Integration with Taobao and Tmall: In a notable development, JD Logistics reached a significant agreement with Alibaba’s Taobao and Tmall platforms. This integration allows merchants and consumers to track JD shipments directly within Taobao and Tmall apps, showcasing JD.com’s leadership in logistics excellence.

Commitment to ESG and Shareholder Returns

JD.com has maintained a strong focus on sustainability, achieving higher scores in the 2024 S&P Global Corporate Sustainability Assessment. The company’s efforts span governance improvements, employee development, and supplier management, positioning it as a global leader in retail ESG practices.

In terms of shareholder value, JD.com completed its USD 3 billion share repurchase program, reducing outstanding shares by 8.1% as of September 30, 2024. The company has now launched a new USD 5 billion share buyback initiative, reflecting its confidence in long-term growth.

Looking Ahead

Ian Su Shan, Chief Financial Officer of JD.com, expressed optimism about the company’s trajectory. “This quarter’s results highlight our commitment to delivering value through efficiency and innovation. Our expanding ecosystem and competitive pricing strategies will ensure continued growth and engagement with users and partners alike.”

JD.com’s Q3 results underscore its resilience in a challenging economic environment. As the company continues to innovate and scale its operations, it remains a key player in shaping the future of China’s e-commerce and logistics sectors.

JD.com Reports Significant Profit Growth in Q2

JD.com reported its unaudited financial results for the second quarter of 2024, showcasing a solid performance in its core business areas.

Despite a modest 1.2% year-on-year increase in net revenues, the company demonstrated significant profitability improvements and strategic business growth, particularly in its retail, health, and logistics segments.

In the second quarter, JD Retail strengthened its market position by entering into strategic partnerships with prominent brands like Xiaomi, Lenovo, OPPO, and luxury fashion houses including MONCLER and alexanderwang.

These collaborations focused on smart devices, intelligent supply chain management, and AI integration, underscoring JD.com’s commitment to enhancing user experience and expanding its platform ecosystem.

JD Health continued to innovate by partnering with major pharmaceutical companies to debut new and specialty drugs online, such as the Alzheimer’s treatment drug Leqembi®. These efforts highlight JD Health’s advanced omni-channel supply chain and service capabilities.

JD Logistics, another key segment, saw a significant improvement in profitability due to continued optimization of its network layout, algorithm-based vehicle scheduling, and product structure. These enhancements contributed to cost reductions and efficiency gains, further solidifying JD.com’s leadership in China’s logistics industry.

Financial Highlights

JD.com reported a net revenue of RMB291.4 billion (US$40.1 billion) for the second quarter of 2024, a slight increase from RMB287.9 billion in the same period last year.

Despite the modest revenue growth, the company achieved significant improvements in profitability metrics. Cost of revenues slightly decreased by 0.4% to RMB245.5 billion, contributing to a gross margin increase of 137 basis points year-on-year to 15.8%.

Operating income for the quarter rose by 27.0% to RMB10.5 billion (US$1.4 billion), with an operating margin of 3.6%, up from 2.9% in Q2 2023. On a non-GAAP basis, operating income increased by 33.7% to RMB11.6 billion (US$1.6 billion), with a non-GAAP operating margin of 4.0%.

Net income attributable to JD.com’s ordinary shareholders saw a remarkable 92.1% year-on-year increase, reaching RMB12.6 billion (US$1.7 billion), while non-GAAP net income attributable to shareholders rose by 69.0% to RMB14.5 billion (US$2.0 billion).

This strong profit growth was reflected in the diluted net income per ADS, which nearly doubled, increasing by 97.3% to RMB8.19 (US$1.13).

JD.com also reported robust cash flow figures, with operating cash flow for the twelve months ended June 30, 2024, increasing by 40.9% to RMB74.0 billion (US$10.2 billion). Free cash flow, excluding the impact from consumer financing receivables, surged by 66.2% to RMB55.6 billion (US$7.7 billion).

Additionally, the company’s ongoing share repurchase program resulted in the buyback of approximately 224.3 million Class A ordinary shares during the first half of 2024, representing around 7.1% of its outstanding shares as of December 31, 2023. This move, coupled with JD.com’s record-high operating and net profits, underscores the company’s commitment to delivering long-term value to its shareholders.

Q1 2024

JD.com reported its unaudited financial results for Q1 2024, alongside significant operational developments.

Strategic and Operational Highlights

CEO Sandy Xu emphasized JD.com’s focus on improving user experience, leading to significant growth in active users and engagement. The company continues to provide a superior combination of selection, speed, quality, and price, resonating with consumers nationwide.

AI in Livestreaming

On April 16, 2024, JD.com introduced an AI digital representative of founder Richard Qiangdong Liu for its livestreaming rooms. This innovation attracted over 20 million views within the first hour, marking a significant milestone in AI integration within e-commerce.

Healthcare Expansion

JD Health partnered with pharmaceutical giants like Pfizer and Sanofi to debut new drugs online, enhancing accessibility and upgrading its one-stop medicine retailing and healthcare services through collaborations with Shanghai Pharmaceuticals and Daiichi Sankyo.

Logistics Growth

JD Logistics expanded its support for Chinese brands globally. In Q1 2024, it provided integrated supply chain services to MINISO stores in Australia and Malaysia, showcasing JD’s international warehousing and fulfillment capabilities.

Financial Highlights

• Revenue: Net revenues for Q1 2024 were RMB260.0 billion (US$36.0 billion), a 7.0% increase from Q1 2023.
• Income from Operations: Reached RMB7.7 billion (US$1.1 billion), up 19.8% from Q1 2023.
• Net Income: Net income attributable to ordinary shareholders was RMB7.1 billion (US$1.0 billion), up 13.9% from Q1 2023.
• Earnings per Share: Diluted net income per ADS was RMB4.53 (US$0.63), a 15.3% increase from Q1 2023.

Between January 1 and May 15, 2024, JD.com repurchased 98.3 million Class A ordinary shares (49.2 million ADSs) for US$1.3 billion, representing 3.1% of its outstanding shares as of December 31, 2023.

Key Figures and Growth Areas

From January to June, China’s total retail sales of consumer goods amounted to 23.5969 trillion RMB, representing a 3.7% increase compared to the same period last year.

Online retail sales of physical goods reached 5.9596 trillion RMB, up by 8.8%, accounting for 25.3% of the total retail sales of consumer goods.

Significant growth was observed in the online retail sales of food, clothing, and daily necessities:

• Food products: +17.8%
• Clothing: +7.0%
• Daily necessities: +7.8%

Technological Impact on Retail

According to a spokesperson from the NBS, the advent of new technologies such as big data and artificial intelligence has generated innovative consumption scenarios.

Emerging consumer models like live-streaming e-commerce and instant delivery services have been pivotal in driving the 8.8% increase in online retail sales of physical goods. Additionally, the volume of express delivery services has surpassed 80 billion packages.

E-Commerce Trends and Analysis

The China Retail Performance Index (CRPI) for July, released by the China General Chamber of Commerce, showed the e-commerce physical goods total sales index at 50.2%, down 4.2 percentage points from the previous month but still within the expansion range.

Meanwhile, the e-commerce average order value index stood at 50.0%, a 1.6 percentage point increase from the previous month.

Analysts attribute the rise in the average order value to the conclusion of mid-year e-commerce promotional events, which resulted in a decrease in “bargain-hunting” consumer behavior.

Outlook

The robust growth in China’s online retail sector reflects the continuous evolution and adaptation of the retail industry to new technologies and consumer preferences. As digital transformation accelerates, the integration of AI and big data is expected to further enhance the efficiency and appeal of online shopping, maintaining the sector’s upward trajectory.

China’s Retail Sales Sees 4.7% Year-on-Year Increase in Q1

China’s retail sector showed a robust increase in March, with total retail sales of consumer goods climbing to 3.9 trillion yuan ($568 billion), marking a 3.1% rise compared to the same month last year, according to data from the National Bureau of Statistics released on April 17. Excluding automobiles, sales rose by 3.9% to nearly 3.5 trillion yuan.

For the first quarter of 2024, the total retail sales reached approximately 12 trillion yuan, a 4.7% increase year-over-year. Sales excluding cars also mirrored this growth rate, amounting to 10.9 trillion yuan.

Urban areas saw significant retail activity, with sales amounting to 3.38 trillion yuan in March alone, up by 3% from last year, while rural retail sales rose by 3.8% to 518 billion yuan. Over the first three months, urban sales increased by 4.6% to 10.4 trillion yuan, whereas rural sales grew faster at 5.2%, reaching 1.6 trillion yuan.

The data also highlighted a divergence in performance across different retail sectors. In March, goods sales increased by 2.7% to reach 3.5 trillion yuan, while the catering industry surged by 6.9% to 396 billion yuan. From January to March, goods sales rose by 4% to 10.7 trillion yuan, and catering revenues jumped by 10.8% to 1.3 trillion yuan.

Looking at retail formats, the first quarter showed mixed results. Supermarkets, convenience stores, specialty stores, and brand-exclusive shops saw sales increase by 2.2%, 5.2%, 6.3%, and 1.1% respectively, while department stores experienced a sales drop of 2.4%.

E-commerce continued to expand rapidly, with online retail sales hitting 3.3 trillion yuan in the first quarter, up by 12.4% year-over-year. Online sales of physical goods, which include food, clothing, and other consumer items, grew by 11.6% to 2.8 trillion yuan, representing 23.3% of the total retail sales. Specific increases were seen in food (21.1%), clothing (12.1%), and other consumer goods (9.7%).

Excluding automobiles, the retail sales ascended to 3,813.1 billion yuan, demonstrating a 7.9% rise. This surge is part of a broader trend observed throughout the year, with total sales reaching 47,149.5 billion yuan, up 7.2% from the previous year.

Non-automobile sales contributed significantly, reaching 42,288.1 billion yuan, a 7.3% increase, showcasing the robust consumer confidence and spending that defines the retail landscape in China.

Urban and rural areas alike witnessed growth, with urban consumer goods sales hitting 3,707.1 billion yuan in December, a 7.2% increase, and rural sales climbing to 647.9 billion yuan, up by 8.9%.

Annually, urban sales reached 40,749.0 billion yuan in 2023, and rural sales saw a notable 8.0% increase to 6,400.5 billion yuan, highlighting the widespread economic vitality across various demographics.

The consumption pattern analysis reveals a diversified growth trajectory, with goods retail sales reaching 3,814.5 billion yuan in December, a 4.8% year-on-year increase.

The catering industry, in particular, experienced a remarkable boom, with income soaring to 540.5 billion yuan, up by an astonishing 30.0%. Over the year, goods retail sales saw a 5.8% increase, totaling 41,860.5 billion yuan, while the catering industry’s income surged by 20.4%, reaching 5,289.0 billion yuan, underscoring the dynamic recovery and expansion of China’s service sectors.

The retail format analysis for 2023 indicates a nuanced landscape.

Department stores, convenience stores, specialty stores, and brand stores in retail enterprises above the designated size witnessed growth rates of 8.8%, 7.5%, 4.9%, and 4.5% respectively.

However, supermarkets experienced a slight contraction, with sales decreasing by 0.4%, signalling shifting consumer preferences and the evolving retail environment.

Online retail sales emerged as a formidable force, totaling 15,426.4 billion yuan in 2023, an 11.0% increase from the previous year.

Physical goods online sales accounted for 27.6% of the total retail sales, reaching 13,017.4 billion yuan, up by 8.4%. Within this segment, food, clothing, and consumer goods experienced growth rates of 11.2%, 10.8%, and 7.1% respectively, illustrating the increasing consumer reliance on digital platforms for a wide range of purchases.

Private domain operation trends of retail chain enterprises in China

In rural areas, the seriously unbalanced gender ratio makes it more difficult for men to find a partner. Some people are reluctant to introduce a partner because the success rate is too low.

Since the 1980s, there has been a high proportion of boys in children born every year in China. As they gradually enter marriage and childbearing age, there has indeed been a phenomenon that men encounter fierce competition in the marriage market and even can’t find a spouse.

However, the distribution of this phenomenon is uneven. This phenomenon is not obvious in large cities due to the supplementary effect of the incoming population, but it will be more prominent in some rural areas, remote areas, and areas with a low level of economic development.

There are differences in the gender ratio of the marriageable population between urban and rural areas.

The gender ratio of the marriageable population in big cities tends to be feminine, resulting in the phenomenon of “older leftover women”; the gender ratio of the marriageable population in the vast rural areas, especially in remote areas, tends to be masculine, resulting in the problem of “grass-roots singles”.

Gender composition should be divided into age groups. From the main marriage and childbearing age group of 20 to 40, there are more than 17 million men than women, not more than 30 million, according to NBS.

Guangdong is the province with the highest proportion of men, accounting for 53.07% of the male population and 46.93% of the female population, with a gender ratio of 113.08. Followed by Hainan, the proportion of the male population is 53.02%, the female population is 46.98%, and the gender ratio is 112.86.

The three northeastern provinces are the most balanced. Among them, Jilin and Liaoning are the only provinces in China where the female population exceeds the male population.

7 Major Consumer Segments Shaping Chinese Market Landscape

The retail sales of consumer goods in urban areas was 35,131.7 billion yuan (US$5,129 bn) in 2019, up by 7.9% year-on-year while that in rural areas was 6,033.2 billion yuan (US$881 bn), up by 9.0% year-on-year.

The catering services in 2019 gained 4,672.1 billion yuan (US$682 bn), up by 9.4% year-on-year.

In 2019, the retail sales of supermarkets, department stores, specialty stores, and specialty stores in the retail sector above designated size increased by 6.5%, 1.4%, 3.2%, and 1.5% respectively over the previous year.

In 2019, China’s online retail sales reached 10,632.4 billion yuan (US$1,552 bn), an increase of 16.5% over the previous year.

Among them, the online retail sales of physical goods reached 8,523.9 billion yuan, an increase of 19.5%, accounting for 20.7 percent of the total retail sales of social consumer goods; among the online retail sales of physical goods, food, clothing, and other consumer goods increased by 30.9%, 15.4%, and 19.8% respectively.

Breakdown of Total Retail Sales of Consumer Goods in China: Dec vs. 2019

The turnover of post services totaled 1,623.0 billion yuan, up by 31.5 percent over the previous year.

In 2019, the number of mail delivery was 2.17 billion; that of parcel delivery was 20 million, and that of express delivery was 63.52 billion with revenue reaching 749.8 billion yuan.

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The gross domestic product (GDP) of China was 45,093.3 billion yuan (US$6,565.68 billion) in the first half of 2019, a year-on-year increase of 6.3% at comparable prices according to the preliminary estimates of National Bureau of Statistics of China. The year-on-year GDP growth for the first quarter was 6.4 percent, and 6.2% for the second quarter.

The value-added of the primary industry was 2,320.7 billion yuan, a year-on-year growth of 3.0%; the secondary industry was 17,998.4 billion yuan, a year-on-year growth of 5.8%; and the tertiary industry was 24,774.3 billion yuan, a year-on-year growth of 7.0%.

Agricultural Production

In the first half of 2019, the value-added of crop farming grew by 3.9% year on year, 0.5 percentage point slower than the first quarter. The overall output of summer grain was 141.74 million tons, an increase of 2.93 million tons over last year, up by 2.1 percent, hitting the highest record as that of 2017.

The structure of crop farming was further optimized, as planting area for cotton and soybean increased. In the first half, the output of eggs grew by 3.6% year on year, and that of milk grew by 1.7%. The output of pork, beef, mutton, and poultry was 39.11 million tons, down by 2.1 percent, among which, the output of beef, mutton and poultry grew by 2.4 percent, 1.5% and 5.6% year on year respectively, while the output of pork went down by 5.5%.

Industrial Production

In the first half, the year-on-year growth rate of total value added of the industrial enterprises above the designated size was 6.0 percent, 0.5 percentage point slower than the first quarter.

In June, the year-on-year growth rate of total value added of the industrial enterprises above the designated size was 6.3 percent, 1.3 percentage points faster than that of May, up by 0.68% month on month.

An analysis by types of ownership showed that the value-added of the state holding enterprises went up by 5.0% year on year; that of share-holding enterprises up by 7.3%; and enterprises funded by foreign investors or investors from Hong Kong, Macao, and Taiwan up by 1.4%.

In terms of sectors, the value-added of the mining grew by 3.5% year on year, the manufacturing grew by 6.4% and the production and supply of electricity, thermal power, gas, and water grew by 7.3%. The value-added of strategic emerging industries grew by 7.7 percent, 1.7 percentage points faster than that of the industrial enterprises above the designated size.

The value-added of high-tech manufacturing grew by 9.0 percent, 3.0 percentage points faster than that of the industrial enterprises above the designated size, accounting for 13.8% of the total value added of the industrial enterprises above the designated size, 0.8 percentage point higher than that of the same period last year.

The output of new energy vehicles and solar cells grew by 34.6% and 20.1% year on year.

In the first five months of 2019, the total profits made by industrial enterprises above the designated size was 2,379.0 billion yuan, down by 2.3% year on year, 1.1 percentage points less than that of the first four months. The profits of industrial enterprises above the designated size in May grew by 1.1 percent, while that for April was down by 3.7% year on year.

The profit rate of the business revenue of industrial enterprises above the designated size was 5.72 percent, 0.2 percentage point higher than that of the first four months in 2019.

Service Sector Grew Fast

In the first half, the service sector maintained good momentum. The value-added of information transmission, software, and information technology services, that of leasing and business services, that of transport, storage and postal services, and that of financial intermediation grew by 20.6 percent, 7.8 percent, 7.3% and 7.3% year on year respectively, or 13.6 percentage points, 0.8 percentage point, 0.3 percentage point and 0.3 percentage point faster than that of the tertiary industry.

In the first half of 2019, the Index of Services Production increased by 7.3% year on year, 0.1 percentage point lower than that of the first quarter; specifically, that for June grew by 7.1 percent, 0.1 percentage point faster than that of May.

In June, the Business Activity Index for services was 53.4 percent, continuing to stay above the 50-point mark separating growth from contraction. The Business Activities Expectation Index for services was 60.3 percent, staying at a high level.

In the first five months, the business revenue of service enterprises above the designated size increased by 10.1% year on year, 0.3 percentage point faster than that of the first four months; specifically, the business revenue of strategic emerging services, high-tech services and technology services demonstrated fast growth, which increased by 12.5 percent, 12.3% and 12.0% respectively, or 2.4 percentage points, 2.2 percentage points and 1.9 percentage points faster than the growth of the service enterprises above the designated size.

Market Sales Demonstrated a Stable and Rising Trend with Higher Growth Rate and Share for Online Retail Sales

Investment Witnessed Steady Growth and the Investment in High-tech Industries Grew Fast

In the first half, the investment in fixed assets (excluding rural households) reached 29,910.0 billion yuan, up by 5.8% year on year, 0.2 percentage point faster than that of the first five months, or 0.5 percentage point slower than that of the first quarter.

Specifically, the private investment reached 18,028.9 billion yuan, up by 5.7%. The investment in the primary industry went down by 0.6%; the secondary industry went up by 2.9 percent, among which, that in manufacturing went up by 3.0%; the tertiary industry went up by 7.4 percent, among which, that in infrastructure was up by 4.1%.

The investment in the high-tech manufacturing industry increased by 10.4 percent, 4.6 percentage points faster than the total investment; the investment in high-tech services went up by 13.5 percent, 7.7 percentage points faster than the total investment. In June, the investment in fixed assets (excluding rural households) grew by 0.44% month on month.

In the first half, the total investment in real estate development was 6,160.9 billion yuan, up by 10.9 percent, or 0.9 percentage point slower than that of the first quarter. The floor space of commercial buildings sold reached 757.86 million square meters, down by 1.8% year-on-year. The total sales of commercial buildings were 7,069.8 billion yuan, up by 5.6 percent, maintaining the same speed as that of the first quarter.

Imports and Exports Showed Slight Growth

In the first half, the total value of imports and exports of goods was 14,667.5 billion yuan, a year-on-year increase of 3.9 percent, 0.2 percentage point faster than the first quarter.

The total value of exports was 7,952.1 billion yuan, up by 6.1%; the total value of imports was 6,715.5 billion yuan, up by 1.4%. The trade balance was 1,236.6 billion yuan in surplus, up by 41.6% year on year.

The import and export of general trade increased by 5.5 percent, accounting for 59.9% of the total value of the imports and exports, an increase of 0.9 percentage point compared with the same period last year.

The exports of mechanical and electrical products increased by 5.3 percent, accounting for 58.2% of the total value of exports. The total value of imports and exports by private enterprises increased by 11.0 percent, accounting for 41.7% of the total value, 2.7 percentage points higher than the same period last year.

In June, the total value of imports and exports was 2,561.9 billion yuan, a year-on-year increase of 3.2%. The total value of exports was 1,453.5 billion yuan, up by 6.1 percent, and the total value of imports was 1,108.3 billion yuan, down by 0.4%.

In the first half, the export delivery value of industrial enterprises above the designated size reached 5,836.1 billion yuan, a year-on-year increase of 4.2%. In June, the export delivery value of industrial enterprises above the designated size reached 1,055.5 billion yuan, up by 1.9 percent, 1.2 percentage points faster than that of May.

Consumer Price

In the first half, the consumer price went up by 2.2% year on year, 0.4 percentage point faster than the first quarter.

Specifically, the price went up by 2.2% both in the urban and rural areas. Grouped by commodity categories, prices for food, tobacco and alcohol went up by 3.9% year on year; clothing up by 1.8%; housing up by 2.0%; articles and services for daily use up by 1.1%; transportation and communication down by 1.0%; education, culture and recreation up by 2.5%; medical services and health care up by 2.6%; other articles and services up by 2.2%.

In terms of food, tobacco and alcohol prices, prices for grain went up by 0.5 percent, pork up by 7.7 percent, fresh vegetables up by 9.2%. Core CPI excluding the price of food and energy went up by 1.8% year on year, 0.1 percentage point lower than that of the first quarter.

In June, the consumer price went up by 2.7% year on year, increasing at the same speed as last month, and down by 0.1% month on month.

In the first half of 2019, the producer prices for industrial products went up by 0.3% year on year, 0.1 percentage point faster than the first quarter. In June, the producer prices for industrial products were unchanged compared with the same period last year, down by 0.3 percentage month on month.

In the first half, the purchasing prices for industrial producers went up by 0.1% year on year, increasing at the same speed as the first quarter. In June, the prices dropped by 0.3% year on year and down by 0.1% month on month.

Employment

In the first half, the newly increased employed people in urban areas totaled 7.37 million, accounting for 67% of the whole-year target. In June, the surveyed unemployment rate in urban areas was 5.1 percent, 0.1 percentage point higher than the previous month.

Specifically, the surveyed unemployment rate of the population aged from 25 to 59 was 4.6 percent, 0.5 percentage point lower than that of the surveyed unemployment rate in urban areas. The urban surveyed unemployment rate in 31 major cities was 5.0 percent, the same as the previous month.

In June, the employees of enterprises worked averagely 45.7 hours per week. At the end of the second quarter, the number of rural migrant workers reached 182.48 million, an increase of 2.26 million over the same period last year, up by 1.3 percent, and 0.1 percentage point faster than the first quarter.

Residents Income Grew Faster than Economic Growth and Urban-Rural Income Ratio Continued to Narrow Down.

In the first half, the nationwide per capita disposable income of residents was 15,294 yuan, a nominal growth of 8.8% year on year, 0.1 percentage point faster than that of the first quarter; the real increase was 6.5% after deducting price factors, 0.2 percentage point higher than the economic growth.

In terms of permanent residence, the per capita disposable income of urban households was 21,342 yuan, real growth of 5.7%. The per capita disposable income of rural households was 7,778 yuan, real growth of 6.6%.

The per capita disposable income of urban households was 2.74 times of the rural households, 0.03 less than that of the same period last year. The median of the nationwide per capita disposable income was 13,281 yuan, a nominal increase of 9.0% year-on-year.

Views from Global Media

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Total retail sales of consumer goods in China increased to US$1,457 billion in Q1 2019 and roughly 85.3% came from urban areas. Online retail sales of goods and services totaled US$333.45bn, representing 22.9% of the total.

In March 2019, retail sales of consumer goods grew by 8.7% year-on-year to 3,172.6 billion yuan (US$472.73bn).

• About 85.7% of that came from urban areas (2,719.2 billion yuan, up 8.5%), and 14.3% from rural areas (453.4 billion yuan, up 9.4%).
• Grouped by consumption patterns, around 10.7% were from the catering services (339.3 billion yuan, up 9.5%) and 89.3% from retail sales of goods (2,833.3 billion yuan, up 8.6%)

China Retail Overview in Q1 2019

In China, retail sales of consumer goods totaled 9,779 billion yuan (US$1,457.10bn) for Q1 2019, up 8.3% from the prior year period, according to the National Bureau of Statistics of China.

• About 85.3% came from urban areas (8,340.2 billion yuan, up 8.2%) and over 14.7% from rural areas (1,438.8 billion yuan, up 9.2%).
• Grouped by consumption patterns, around 10.9% were from the catering services (1,064.4 billion yuan, up 9.6%) and 89.1% from retail sales of goods (8,714.6 billion yuan, up 8.2%)

Of the total retail sale, the supermarket, department store, and specialty store of units above-designated size went up by 7.5%, 0.9%, and 3.9% year-on-year, respectively; the exclusive shop of units above designated size declined by 0.9% year-on-year.

Online retail sales of goods and services in China amounted to 2,237.9 billion yuan (US$333.45bn) (around 22.9% of the total), increased by 15.3% year-on-year.

Specifically, the online retail sales of physical goods reached 1,777.2 billion yuan (US$264.81bn) with an increase of 21%, accounting for 18.2% of the total retail sales of consumer goods. Food, clothing, and other commodities went up by 24.6%, 19.1%, and 21.3%, respectively.

E-commerce companies investment in retail: China vs. the U.S.

The Chinese Academy of Social Sciences (CASS) issued a warning that China’s population could start to shrink as soon as 2027 if its fertility rate remains at the current level of about 1.6. According to Singapore media Channel NewsAsia, China’s population is set to reach a peak of 1.442 billion in 2029 and start a long period of “unstoppable” decline in 2030.

In 2018, the number of births was 15.23 million with a birth rate of 10.94 per thousand. The number of deaths was 9.93 million with a death rate of 7.13 per thousand. The natural growth rate was 3.81 per thousand.

Regarding gender, the male population was 713.51 million, and the female population was 681.87 million. The sex ratio of the total population was 104.64 (the female is 100).

Concerning age composition, the population at the working age of 16-59 was 897.29 million, accounting for 64.3% of the total population. People aged 60 and over was 249.49 million, accounting for 17.9% of the total, 166.58 million of which aged 65 and over, accounting for 11.9% of the total.

Concerning urban-rural structure, the permanent residents in urban areas were 831.37 million, an increase of 17.90 million over that at the end of last year; and the permanent residents in rural areas were 564.01 million, a decrease of 12.60 million.

The proportion of the urban population to the total population (urbanization rate) was 59.58%, 1.06 percentage points higher than that at the end of 2017.

The population who reside in areas other than their household registration and have been away from there for over six months reached 286 million, which was 4.50 million less than that at the end of 2017. Specifically, the floating population stood at 241 million, 3.78 million less than that at the end of 2017.

Insights of China internet users in lower-tier cities

In the whole year of 2018, the total retail sales of consumer goods amounted to 38,098.7 billion yuan (US$5,620.13 billion), up by 9.0% year-on-year (nominal growth rate), according to the National Bureau of Statistics of China. Of the total. The retail sales of consumer goods of units above-designated size reached 14,531.1 billion yuan (US$2,143.55 billion), with an increase of 5.7%. 

In December 2018, the total retail sales of consumer goods reached 3,589.3 billion yuan (US$529.48 billion) in China, up by 8.2% year-on-year, 0.1 percentage point more than that of November. Of the total, the retail sales of consumer goods of units above-designated size reached 1,508.4 billion yuan (US$222.51 billion), increased by 2.4%.

In terms of different areas, from January to December 2018, the retail sales of consumer goods in urban areas was 32,563.7 billion yuan (US$4,803.63), up by 8.8% year-on-year; while that in rural areas was 5,535.0billion yuan (US$816.5 billion), up by 10.1%.

In December, the retail sales of consumer goods in urban areas was 3,032.9 billion yuan (US$447.4 billion), up by 8.0% year-on-year; while that in rural areas was 556.5 billion yuan (US$82.09 billion), up by 9.3% year-on-year.

In terms of different consumption patterns, the catering services generated a total of 4,271.6 billion yuan (US$630.13 billion) in 2018, up by 9.5% year-on-year. The retail sales of goods were 33,827.1 billion yuan (US$4,990.0 billion), increased by 8.9%. In December, the catering services generated 442.2 billion yuan (US$65.23), up by 9.0% year-on-year. The retail sales of goods were 3,147.2 billion yuan (US$464.26 billion), an increase of 8.0% year-on-year.

The income of retail sales of goods of the enterprises (units) above designated size totaled 13,607.5 billion yuan (US$2,007.31 billion) in 2018, up by 5.7% year-on-year. In December, it was 1,417.5 billion yuan (US$209.10 billion), up by 2.2% year-on-year.

In 2018, the online retail sales of goods and services totaled 9,006.5 billion yuan (US$1,328.59 billion), up by 23.9% year-on-year. The online retail sales of physical goods were 7,019.8 billion yuan (US$1,035.53 billion) with an increase of 25.4%, accounting for 18.4% of the total retail sales of consumer goods. Of the online retail sales of physical goods, food, clothing, and other commodities went up by 33.8%, 22.0%, and 25.9%, respectively.

In 2018, of the total retail sale, the supermarket, store, pro shop, and exclusive shop of units above designated size went up by 6.8%, 3.2%, 6.2%, and 1.8% respectively.

China retail trend 2019; to hit US$6.77 trillion, fueled by e-commerce and new retail

The gross domestic product (GDP) of China was 65,089.9 billion yuan (US$9,368.51 bn) in the first three quarters of 2018, a year-on-year increase of 6.7% at comparable prices, according to the preliminary estimates of National Bureau of Statistics of China.

Specifically, the year-on-year growth was 6.8% for Q1 2018, 6.7% for Q2 2018, and 6.5% for Q3 2018. The value added of the primary industry was 4,217.3 billion yuan (US$607 bn), up by 3.4% year-on-year; the secondary industry 26,295.3 billion yuan (US$3,784.73 bn), up by 5.8%; and the tertiary industry 34,577.3 billion yuan (US$4,976.78 bn), up by 7.7%.

Agricultural Production was Sound

The output of summer crops was 138.72 million tons, a decrease of 3.06 million tons or 2.2% less over last year, and that of the early rice was 28.59 million tons, a decrease of 1.28 million tons or 4.3% less over last year.

In the first three quarters, the output of pork, beef, and mutton was 60.07 million tons, up by 0.2% year-on-year, among them, the output of pork was 38.43 million tons, up by 0.3%. There were 428.87 million pigs registered, a year-on-year decrease of 2.3%; and 495.79 million pigs were slaughtered, a year-on-year increase of 0.1%.

The Industrial Production was Generally Stable

In the first three quarters of 2018, the real growth of the total value added of the industrial enterprises above designated size was 6.4% year-on-year, 0.3 percentage point slower than H1 2018.

From the perspective of ownership types, the value added of the state holding enterprises went up by 7.0% year-on-year; collective enterprises down by 1.4%; share-holding enterprises up by 6.6%; and enterprises funded by foreign investors or investors from Hong Kong, Macao, and Taiwan up by 5.7%.

In terms of sectors, the value added of the mining increased by 1.8% on a year-on-year basis, the manufacturing grew by 6.7%, and the production and supply of electricity, thermal power, gas, and water grew by 10.3%.

In September, the value added of the industrial enterprises above designated size grew by 5.8% year-on-year.

In the first three quarters, the Index of Services Production increased by 7.8% year-on-year, 0.2 percentage point slower than H1 2018. Specifically, information transmission, software, and information technology services grew by 37.5% year-on-year; leasing and business services grew by 10.8% year-on-year.

In September, the Index of Services Production increased by 7.3% year-on-year.

In the first eight months, the total profits registered by industrial enterprises above the designated size were 4,424.9 billion yuan (US$636.88 bn), up by 16.2% year-on-year. The profit rate from the principal businesses of industrial enterprises above the designated size was 6.43%, 0.35 percentage point higher than that of the same period last year.

From January to August, the business revenue of service enterprises above the designated size grew by 12.0% year-on-year, and the profits for service enterprises above the designated size grew by 15.5% year-on-year.

Growth of Residents’ Consumption was Accelerated

In the first three quarters, the total retail sales of consumer goods reached 27,429.9 billion yuan (US$3,948.04 bn), a year-on-year rise of 9.3%, 0.1 percentage point slower than H1 2018. In terms of areas, the retail sales in urban areas reached 23,471.7 billion yuan (US$3,378.33 bn), up by 9.1%, and the retail sales in rural areas were 3,958.2 billion yuan (US$569.71 bn), up by 10.4%.

Grouped by consumption patterns, the income of the catering was 2,976.3 billion yuan, up by 9.8% year-on-year; and the retail sales of goods were 24,453.6 billion yuan, up by 9.2%.

The sales of upgraded consumer goods witnessed fast growth. Among the retail sales of enterprises above designated size, the retail sales of petroleum and related products, as well as communication appliances increased by 14.4% and 10.7% year-on-year, or 5.4 percentage points and 1.4 percentage points faster than the same period last year.

In September, the total retail sales of consumer goods grew by 9.2% year-on-year, 0.2 percentage point faster than August.

In the first three quarters, the national per capita consumption expenditure of residents was 14,281 yuan (US$2,055.49), a nominal year-on-year growth of 8.5%, 1.0 percentage point faster than the same period last year, or a real growth of 6.3% after price adjustment, 0.4 percentage point faster.

Specifically, the nominal growth of per capita consumption expenditure of urban households increased by 6.5%, 0.3 percentage point faster than the same period last year; the nominal growth of per capita consumption expenditure of rural households increased by 12.0%, 3.4 percentage points faster.

Private Investment and the Investment in Manufacturing Accelerated

In the first three quarters, the investment in fixed assets (excluding rural households) was 48,344.2 billion yuan (US$6,958.27 bn), a year-on-year growth of 5.4%, 0.6 percentage point less than the first six months, and 0.1 percentage point faster than the first eight months.

Specifically, private investment reached 30,166.4 billion yuan (US$4,341.91 bn), up by 8.7% year-on-year, 0.3 percentage point faster than H1 2018, or 2.7 percentage points faster than the same period last year.

The investment in the primary industry was up by 11.7%; the secondary industry grew by 5.2%, among which the investment in manufacturing was up by 8.7%, 1.9 percentage points faster than H1 2018, achieving a faster growth for the sixth consecutive month; the tertiary industry went up by 5.3%, among which the investment in infrastructure increased by 3.3%.

In the first three quarters, the total investment in real estate development was 8,866.5 billion yuan (US$1,276.17 bn), a year-on-year growth of 9.9%. The floor space of commercial buildings sold reached 1,193.13 million square meters, a year-on-year increase of 2.9%. The total sales of commercial buildings were 10,413.2 billion yuan (US$1,498.79 bn), a growth of 13.3% year-on-year.

Growth of Export Speeded up

In the first three quarters, the total value of imports and exports of goods was 22,283.9 billion yuan (US$3,207.36 bn), an increase of 9.9% year-on-year, 2.1 percentage points faster than H1 2018.

Specifically, the value of exports totaled 11,858.5 billion yuan (US$1,706.82 bn), up by 6.5%, 1.8 percentage points faster than H1 2018; the value of imports totaled was 10,425.4 billion yuan (US$1,500.55 bn), an increase of 14.1% year-on-year, 2.5 percentage points faster than H1 2018.

The trade balance was 1,433.1 billion yuan (US$206.27 bn) in surplus, down by 28.3% than the same period last year. The imports and exports with major trading partners increased. The imports and exports with the European Union, the United States, and ASEAN went up by 7.3%, 6.5%, and 12.6%, respectively.

And the imports and exports with some countries along the “Belt and Road” demonstrated growing momentum. The imports and exports with Russia, Poland, and Kazakhstan went up by 19.4%, 11.9%, and 11.8%, respectively.

In September, the total value of imports and exports was 2,885.2 billion yuan (US$415.27 bn), a year-on-year increase of 17.2%. Among that, the total value of exports was 1,549.2 billion yuan (US$222.98 bn), up by 17.0%, and the total value of imports was 1,336.0 billion yuan (US$192.29 bn), up by 17.4%.

In the first three quarters, the export delivery value of industrial enterprises above designated size reached 8,972.9 billion yuan (US$1,291.49 bn), a year-on-year increase of 8.1%.

In September, the export delivery value of the industrial enterprises above designated size reached 1,183.9 billion yuan (US$170.40 bn), a year-on-year increase of 11.7%.

Consumer Price Grew Mildly and the Growth of Prices for Industrial Products was Stable.

In the first three quarters, the consumer price went up by 2.1% year-on-year, 0.1 percentage point higher than H1 2018.

Grouped by commodity categories, prices for food, tobacco, and alcohol went up by 1.6% year-on-year; clothing up by 1.2%; housing up by 2.4%; articles and services for daily use up by 1.6%; transport and communication up by 1.7%; education, culture, and recreation up by 2.2%; medical services and health care up by 5.0%; other articles and services up by 1.1%.

In September, the consumer price was up by 2.5% year-on-year, 0.2 percentage point higher than last month, and up by 0.7% month-on-month.

In the first three quarters, the producer prices for industrial products went up by 4.0% year-on-year, 0.1 percentage point higher than H1 2018. The purchasing prices for industrial producers went up by 4.5% year-on-year.

In September, the producer prices for industrial products went up by 3.6% year-on-year, 0.5 percentage point less than last month, up by 0.6% month-on-month; and the purchasing prices for industrial producers were up by 4.2% year-on-year, or up by 0.6% month-on-month.

The Surveyed Unemployment Rate Dropped and the Employment Situation was Generally Stable

In September, the surveyed unemployment rate in urban areas was 4.9%, 0.1 percentage point less than last month, or 0.1 percentage point less over the same month last year.

The urban surveyed unemployment rate in 31 major cities was 4.7%, 0.2 percentage point less than last month and 0.1 percentage point less than the same month last year. Specifically, the surveyed unemployed rate of major labor force aged from 25 to 59 was 4.3%, which was the same as last month.

By the end of Q3 2018, the number of rural migrant workers reached 181.35 million, 1.66 million more than the same period last year, an increase of 0.9% year-on-year. The average monthly income of rural migrant workers was 3,710 yuan (US$533.99), an increase of 7.3% year-on-year.

Resident Income Grew Synchronized with the National Economy

In the first three quarters, the national per capita disposable income was 21,035 yuan (US$3,027.61), a nominal increase of 8.8% year-on-year, or a real increase of 6.6% after price adjustment; the growth rate was the same as H1 2018, which is almost same as that of the national economy.

In terms of permanent residence, the per capita disposable income of urban households was 29,599 yuan (US$4,260.24), a nominal increase of 7.9% year-on-year, or a real increase of 5.7% after price adjustment.

The per capita disposable income of rural households was 10,645 yuan (US$1,532.16), a nominal increase of 8.9% year-on-year, or a real increase of 6.8% after price adjustment. The per capita income of urban households was 2.78 times that of rural households, 0.03 less than the same period last year. The median of the national per capita disposable income was 18,236 yuan (US$2,624.74), a nominal increase of 8.7% year-on-year.

Economic Structure Continued to be Optimized and the Economy was more Consumption-based.

Industries continued to be upgraded. In the first three quarters, the growth rate of the value added of the tertiary industry was 1.9 percentage points higher than that of the secondary industry, accounting for 53.1% of the GDP, which was 0.3 percentage point higher than the same period last year and 12.7 percentage points higher than that of the secondary industry.

The role of consumption as the basic economic function was further solidified. In the first three quarters, the contribution rate of final consumption expenditure to economic growth was 78.0%, 46.2 percentage points higher than the total capital formation.

The consumption expenditure on services continued to represent a larger share. In the third quarter, the consumption expenditure on services accounted for 52.6% of the national consumption expenditure of households, 0.2 percentage point higher than the same period last year.

The investment structure continued to be optimized. In the first three quarters, the investment in the high-tech manufacturing industry grew by 14.9% year-on-year, 9.5 percentage points higher than the total investment.

The trade structure was further improved. In the first three quarters, import and export of general trade increased by 13.5%, accounting for 58.4% of the total value of the imports and exports, an increase of 1.9 percentage points compared with the same period last year. The export of mechanical and electronic products grew by 7.8%, accounting for 58.3% of the total value of exports.

Growth of New Driving Forces was Accelerated

The capacity utilization rate maintained stably. In the first three quarters, the industrial capacity utilization rate nationwide was 76.6%, maintaining the same level as compared with the same period last year.

In Q3 2018, the capacity utilization rate of smelting and pressing of ferrous metals, as well as mining and washing of coals were 78.7% and 70.1%, respectively, or 2.0 and 1.1 percentage points higher than the same period last year.

The corporate cost and leverage ratio decreased. In the first eight months, the cost for per-hundred-yuan turnover of principal business of the industrial enterprises above the designated size was 84.39 yuan, 0.35 yuan less than the same period last year.

By the end of August, the asset-liability ratio of the industrial enterprises above the designated size was 56.6%, 0.5 percentage point lower than the same period last year.

The inventory of commercial buildings continued to decrease. By the end of September, the floor space of commercial buildings for sale has dropped by 13.0% year-on-year.

More efforts were taken to improving weak links of key fields. In the first three quarters, the investment in the management of environmental protection and treatment of environmental pollution and the investment in agriculture increased by 33.7% and 12.4% year-on-year, respectively, or 28.3 percentage points and 7.0 percentage points faster than the total investment.

The progress of green development was achieved steadily. In the first three quarters, the energy consumption per unit of GDP dropped by 3.1% year-on-year.

New industries grew fast. In the first three quarters, the value added of high-tech industries and equipment manufacturing increased by 11.8% and 8.6% year-on-year, 5.4 and 2.2 percentage points faster than that of the industrial enterprises above the designated size.

The value added of industrial strategic and emerging industries went up by 8.8% year on year, 2.4 percentage points faster than that of the industrial enterprises above the designated size.

New products grew rapidly. In the first three quarters, the production of new energy vehicles was up by 54.8% year-on-year, and integrated circuits up by 11.7%.

New types of business were booming. In the first three quarters, the online retail sales reached 6,278.5 billion yuan (US$903.68 bn), a year-on-year growth of 27.0%. Specifically, the online retail sales of physical goods were 4,793.8 billion yuan (US$689.98 bn), a year-on-year growth of 27.7%, accounting for 17.5% of the total retail sales of consumer goods; the online retail sales of non-physical goods was 1,484.7 billion yuan (US$213.69 bn), an increase of 24.8%.

In September 2018, the total retail sales of consumer goods reached 3,200.5 billion yuan (US$461.81 bn) in China, up by 9.2% year-on-year (nominal growth rate), according to National Bureau of Statistics of China. The retail sales of consumer goods of units above-designated size reached 1,276.2 billion yuan (US$184.15 bn), increased by 5.7%.

From January to September 2018, the total retail sales of consumer goods amounted to 27,429.9 billion yuan (US$3,957.98 bn), up by 9.3% year-on-year. The retail sales of consumer goods of units above-designated size reached 10,479.2 billion yuan (US$1,512.09 bn), increased by 6.9%.

The retail sales of consumer goods in urban areas was 2,706.9 billion yuan (US$390.59 bn) in September, up by 9.0% year-on-year; while that in rural areas was 493.6 billion yuan (US$71.22 bn), up by 10.5% year-on-year.

From January to September 2018, the retail sales of consumer goods in urban areas was 23,471.7 billion yuan (US$3,386.83 bn), up by 9.1% year-on-year; while that in rural areas was 3,958.2 billion yuan (US$571.15 bn), up by 10.4%.

In terms of different consumption patterns, the catering services in September generated 344.7 billion yuan (US$49.74 bn), up by 9.4%, year-on-year. The retail sales of goods were 2,855.8 billion yuan (US$412.08 bn), an increase of 9.2% year-on-year.

From January to September, the catering services generated 2,976.3 billion yuan (US$429.46 bn), up by 9.8% year-on-year. The retail sales of goods were 24,453.6 billion yuan (US$3,528.52 bn), increased by 9.2%.

The income of retail sales of goods of the enterprises (units) above designated size was 1,196.2 billion yuan (US$172.61 bn), up by 5.6% year-on-year. From January to September, it totaled 9,809.9 billion yuan (US$1,415.51 bn), up by 6.9% year-on-year.

From January to September 2018, the online retail sales of goods and services in China totaled 6,278.5 billion yuan (US$905.95 bn),  up by 27.0% year-on-year.

Among that, the online retail sales of physical goods were 4,793.8 billion yuan (US$691.72 bn) with an increase of 27.7%, accounting for 17.5% of the total retail sales of consumer goods; food, clothing, and other commodities went up by 43.8%, 23.3%, and 27.7%, respectively.

From January to September, among the retail sales of goods of the enterprises (units) above designated size, supermarket, department store, professional shop, and specialty store went up by 7.3%, 4.6%, 8.6%, and 4.4%, respectively.

The transactions of the online retail market in China totaled US$593.18 bn in H1 2018, representing 22.7% of total retail sales. Meanwhile, the mobile shopping market in China saw US$397.83 trillion transactions. Tmall, Jingdong, and Pinduoduo led the B2C online retail market.

Total transactions of the online retail market in China was 4,081 billion yuan (US$593.18 bn), an increase of 30.1% year-on-year, accounting for 22.7% of the total retail sales of consumer goods.

There are 568.92 million online shoppers in China in H1 2018. The transactions of mobile shopping grew by 22% to 2,737 billion yuan (US$397.83 bn), which was 2,245 billion yuan in H1 2017.

Online retail sales in the rural area totaled 632.28 billion yuan (US$90.91 bn) in H1 2018, a 44% increase year-on-year compared with 440.2 billion yuan in H1 2017.

The gross merchandise volume of the online retail B2C market expected to be 5283.23 billion yuan (US$767.92 bn) by the end of 2018.

Tmall continues to lead the market with a share of 55%, a 5% increase year-on-year. Jingdong (JD.com) took the second position with a share of 25.2%, increased by 0.8% year-on-year. Pindduoduo and Suning took the next two positions with a share of 5.7% and 4.5%, respectively.

Continue to read articles on cross-border e-commerce, B2B, and mobile e-commerce.

Related CIW Dossier: Retail E-Commerce (updated on 2 Oct 2018)

As of July 2017, there were 751 million internet users in China, a figure which increased by 19.92 million in the first half of this year. The proportion of internet users as a part of the total population has reached 54.3%, 1.1 percentage points higher than in 2016.

The number of mobile internet users in China rose by 28.3 million to reach 724 million at the end of the first half of 2017; mobile internet users also accounted for 96.3% of internet users (non-exclusive), up from 95.1% at the end of 2016.

The gender of internet users in China is nearly identical to the split in the population at large; 52.4% of internet users are male (vs. 51.2% of the general population) and 47.6% are female (48.8% of the general population).

Internet users are also generally younger than the populace as a whole. 72.1% of internet users are between the ages of 10 and 39. Among users aged 40 and over, penetration rates increased by 1.7 percentage points over the first half of 2017.

Incomes among internet users were concentrated among the 2001-3000 yuan/month (US$300-450 /month) and 3001-5000 yuan/month (US$451-750/month) ranges, with the former accounting for 15.8% of users.

Download the details in the updated China Internet Insights report here.

Online retail sales in China’s rural areas in H1 2017 achieved 537.62 billion yuan (US$79.9 billion), including 328.64 billion yuan (US$48.8 billion) for service retail sales and 208.98 billion yuan(US$31.1 billion ) for physical goods retail sales.

Rural e-commerce of China in H1 2017 presents the following characteristics:

1. Rural retail continues to maintain rapid growth. Online retail sales in rural areas grew 38.1% YoY in H1 2017, which is 4.9 percent higher than the city.

The proportion of rural retail sales in the whole country accounted for 17.3%. Rural e-commerce shows to maintain an accelerated growth in the quarterly trend, for online retail sales grew by 39.2% in Q2, 2.4 percent higher than Q1.

2. Rural online travel and catering are growing rapidly, which contributes to the high-speed growth of service type retail sales.

Service type online retail sales grew up to 44.4% YoY, 10.1 percent higher than physical type online retail sales, for which is 34.3%. Service type takes 38.9% of the whole online retail sales, 1.7 percent higher than last year.

Service type sales lead rural online retail sales reached 16.5 percentage points. In the service industry, online travel, entertainment, online catering are leading the development of service type e-commerce, with retail sales of 84.19, 8.17, 68.95 billion yuan(US$12.55B, US$1.22B, US$10.27B) and growth of 61.6%, 58.3%, 56.6% respectively, of which online travel grows as 23.4 percentage points higher than the whole country, significantly more than the national level of development.

Online travel and catering led rural online retail sales to 8.2 and 6.4 percentage points, becoming the largest contribution to the growth among all 19 industries.

3. Food health leads the development of rural physical goods type e-commerce, and remarkable results have been achieved in agricultural and their processed products.

Food health industry which covers most of the agricultural and the processed products reached an amount of retail sales of 42.08 billion yuan (US$6.26 billion) in H1 2017, with a high-speed growth of 62.0%, that is 20.2 percentage points higher than the industry’s average increasing speed in the country and 27.7 percentage points higher than the growth of the physical goods type online retail sales.

It led the rural online retail sales to a growth of 4.1%, which contributes the most to the physical goods type industry. Industries of beauty care, books&videos and outdoor sports maintain growth over 50%, their growth rates achieved 105.2%, 54.5% and 53.3% YoY, which are 83.5, 65.5, 36.3 percentage points higher than their industries of the country.

Food health rates as the fourth of the growing speed, following by mom&baby and 3C digital which kept a growth rate of over 40%.

4. Midwest and northeast rural e-commerce maintain high-speed growth trend, and the eastern area is showing obvious advantages as always. The retail sales achieved 341.86, 107.95, 75.96, 11.84 billion yuan(US$50.86B, US$16.06B, US$11.3B, US$1.76B) for the eastern, middle, western and northeastern areas of China in H1 2017, with growths of 30.6%, 46.4%, 63.1%, 60.8% YoY.

In the midwest and northeast rural areas, the total online retail sales amount is 195.76 billion yuan(US$29.13 billion), and the growth rate is as high as 53.3%, which is 22.7 percent higher than the east rural area and covers as 36.4% of all rural online retail sales, 3.6 percentage points higher than last year.

For service type online retail sales, the amount of midwest and northeast areas achieves 92.5 billion yuan(US$13.76 billion), with a growth rate of 71.2%, which is 31 percentage points higher than the physical goods type and covers as 47.3% of all online retail sales, 4.9 percentage points higher than last year.

The retail sales achieved 341.86, 107.95, 75.96, 11.84 billion yuan(US$50.86B, US$16.06B, US$11.3B, US$1.76B) for the eastern, middle, western and northeastern areas of China in H1 2017, with growths of 30.6%, 46.4%, 63.1%, 60.8% YoY. In the Midwest and northeast rural areas, the total online retail sales amount is 195.76 billion yuan(US$29.13 billion), and the growth rate is as high as 53.3%, which is 22.7 percent higher than the east rural area and covers as 36.4% of all rural online retail sales, 3.6 percentage points higher than last year.

From the industry distribution, leading by agricultural and the processed products, travel and catering e-commerce, the development of different rural areas shows their own characteristics. Food health contributes the most to the growth of online retail sales in northeast, western and middle areas, with rates of 25.7%, 23.2%, and 11.5%.

Clothing, shoes & bags led online retail sales development with a growth rate of 16% in the eastern rural area. Online travel contributes the most to the service type industry in western, middle and eastern areas with growth rates of 36.5%, 24.7%, and 15.8% respectively.

Online catering rates the fourth with over 10% of the rate. Besides, beauty care, 3C digital of the eastern rural area, mom&baby, 3C digital of the middle rural area, home furnishings, clothing, shoes&bags of the western rural areas and clothing, shoes & bags and outdoor sports are all making great contributions to their online retail sales growth.

5. The 618 campaign promotes obvious improvement in rural areas, but there is still a big gap compared with the city.

During the 618 period from 1st June to 18th June, the rural online retail sales kept a high-speed development trend with a rate of 62.7%, which is 24.2 percentage points higher than May, but still 8.3 percentage points lower than the city.

It shows that during the shopping campaign in rural areas, the pressure of logistics warehousing response and centralized large-scale customer service, the ability of similar products and brand supply and competition and large data precision marketing, and related personnel training and so on are to be improved.

During 618 period, a number of online retail sales in the western rural area reached a top growth rate of 91.5%, and the growth rates for the northeast, middle and eastern areas are 78.4%, 69.3%, and 56.7%. Food health of midwest and northeast areas, clothing, shoes&bags of eastern areas contributed the most to their online retail sales of all industries.

6. E-commerce accesses to the rural comprehensive demonstration counties and becomes the leading vanguard of the development of rural e-commerce, e-commerce shows the obvious effect to the rural poverty alleviation.

In H1 2017, 496 rural comprehensive demonstration counties with e-commerce achieved online retail sales of 169.94 billion yuan(US$25.29 billion), with a growth rate of 45.4% YoY and 7.3 percentage points higher than the average growth rate.

Demonstration counties with less than a quarter of the number of the counties contributed about one third of the rural online retail sales. 93.2% of the demonstration counties locate at Midwest areas and 52.6% are state level poverty stricken counties.

The online retail sales of physical goods type and service type of demonstration counties in H1 are 98 billion yuan(US$14.58 billion) and 71.94 billion yuan(US$10.71 billion), with growth rates of 41.5% and 51.0% YoY. During 618 campaign, the retail sales grew 87% YoY with 24.3 percentage points higher than the rural areas, which shows that their ability of products and brand competition and marketing are obviously improving.

832 state level poverty stricken counties achieved online retail sales of 53.28 billion yuan (US$7.93 billion) in the first half of 2017, with a growth rate of 60.1% which is 22.1 percentage points higher than the rural average.

261 of the demonstration counties achieved a sales of 34.34 billion yuan(US$5.11 billion), with 67.7% YoY and the average sales amount is 130 million yuan(US$19.35 million), 2.2 times that of the average online retail sales of the state level poverty stricken counties, which is 60 million yuan (US$8.93 million).

In June 2017, the total retail sales of consumer goods in China reached 2,980.8 billion yuan (US$439.37 billion), up by 11.0% year-on-year (nominal growth rate. The real growth rate was 10.0%). Of the total, the retail sales of consumer goods of units above designated size was 1,422.2 billion yuan, increased 10.2%.

From January to June 2017, the total retail sales of consumer goods reached 17,236.9 billion yuan (US$2,540.74 billion), up by 10.4% year-on-year. Of the total, the retail sales of consumer goods of units above designated size were 7,695.3 billion yuan, increased 8.7%.

The retail sales of consumer goods in China’s urban areas was 2,554.5 billion yuan, up by 10.7%, year-on-year; while that in rural areas was 426.3 billion yuan, up by 12.9%, year-on-year. From January to June, the retail sales of consumer goods in China’s urban areas was 14,778.6 billion yuan up by 10.1%, year-on-year; while that in rural areas was 2,458.3 billion yuan, up by 12.3%, year-on-year.

The catering services in June, gained 325.4 billion yuan, up by 11.9%, year-on-year. The retail sales of goods gained 2,655.4 billion yuan, up by 10.9%. In the first six months of 2017, the catering services gained 1,854.6 billion yuan, up by 11.2%, year-on-year. The retail sales of goods gained 15,382.2 billion yuan, up by 10.3%.

In the first six months of 2017, China’s national online retail sales of goods and services was 3,107.3 billion yuan, increased 33.4% year-on-year and accounting for over 18% of total retail sales.

The online retail sales of physical goods were 2,374.7 billion yuan, increased 28.6%, accounting for 13.8% of the total retail sales of consumer goods; Of the online retail sales of physical goods, food, clothing and other commodities went up by 25.1%, 20.8%, and 31.8% respectively.

In the first six months of 2017, of the total retail sale, the supermarket, store, pro shop and exclusive shop of units above designated size went up by 6.3%, 5.8%, 10.0% and 7.4% respectively.

China retail industry development report 2016-2017

The “Alibaba economy” could generate about 122 million of the 415 million total jobs available in China’s digital economy or 29.4% of all the jobs in 2035 from today’s 31 million jobs according to BCG.

If Alibaba’s emerging businesses, such as cloud computing and digital entertainment, play a strong future role as well, we can expect another 10 million jobs by 2035—for a total of 122 million jobs.

said BCG.

Currently about 15,000 “Tao Factories” offers smaller-quantity manufacturing to Taobao sellers; 1,300 “Taobao Villages”, centers of e-commerce in China’s rural areas, brings new job opportunities to farmers. And, Alibaba Cloud or Aliyun, has generated 1.2 million jobs at Chinese startups according to BCG.

The digital economy made up 13% of China’s total economy in 2015, accounting for $1.4 trillion in spending; and, it’s going to grow to 48% of the total economy in 2035, accounting for $16 trillion.

Continue to read → Whitepaper: China Internet Statistics 2017

The total retail sales of consumer goods in China reached 3,175.7 billion yuan in December 2016, up by 10.9% yoy (nominal growth rate. The real growth rate was 9.2%) according to National Bureau of Statistics of China.

The retail sales of consumer goods in China’s urban areas was 2,723.3 billion yuan in December, up by 10.9% yoy; that in rural areas was 452.4 billion yuan, up by 11.2% yoy. In 2016,

In 2016, the total retail sales of consumer goods in China reached 33,231.6 billion yuan, up by 10.4% yoy. The retail sales of consumer goods in urban areas was 28,581.4 billion yuan, up by 10.4% yoy; that in rural areas was 4,650.3 billion yuan, up by 10.9%.

Related: Alibaba retail marketplaces saw 443 mn active buyers in 2016

In 2016, the national online retail sales of goods and services in China was 5,155.6 billion yuan, increased by 26.2% yoy. The online retail sales of physical goods were 4,194.4 billion yuan, increased 25.6%, accounting for 12.6% of the total retail sales of consumer goods.

Of the online retail sales, physical goods, food, clothing and other commodities went up by 28.5%, 18.1%, and 28.8% respectively.

Continue reading: What are consumers buying for Chinese New Year 2017?]

The total retail sales of consumer goods in China reached 3,095.9 billion yuan (US$448.36 billion) in November 2016, up by 10.8% YoY according to National Bureau of Statistics of China.

Of the total, China’s retail sales of consumer goods of units above designated size was 1,479.2 billion yuan, increased by 9.5%.

From January to November in 2016, the total retail sales of consumer goods reached 30,056.0 billion yuan, up by 10.4% YoY. Of the total, the retail sales of consumer goods of units above designated size was13,720.3billion yuan, increased 7.9%.

Retail sales of consumer goods in China urban areas was 2,674.8 billion yuan in November 2016, up by 10.8% YoY; while that in rural areas was 421.0 billion yuan, up by 11.0% YoY. From January to November, the retail sales of consumer goods in urban areas was 25,858.1 billion yuan up by 10.3% YoY while that in rural areas was 4,197.8 billion yuan, up by 10.9% YoY.

China’s online retail sales of goods and services were 4,599.0 billion yuan, increased by 26.2% YoY. Of which, the online retail sales of physical goods was 3,747.0 billion yuan, increased 25.7%, accounting for 12.5% of the total retail sales of consumer goods. Of the online retail sales of physical goods, food, clothing and other commodities went up by 28.4%, 17.9%, and 28.8% respectively.

China’s total retail sales of consumer goods reached 3,111.9 billion yuan (US$451 billion) in October 2016, up by 10.0% year-on-year (nominal growth rate). The real growth rate was 8.8%.

From January to October, the total retail sales of consumer goods reached 26,960.1 billion yuan (US$3,909 bn), up by 10.3% YoY. Of the total, the retail sales of consumer goods of units above designated size was12,231.2 billion yuan, increased 7.8%.

In terms of different areas, the retail sales of consumer goods in urban areas was 2,689.3 billion yuan in October, up by 10%, YoY; while that in rural areas was 422.6 billion yuan, up by 10.3%, YoY. From January to October, the retail sales of consumer goods in urban areas was 23,183.3 billion yuan up by 10.2%, YoY; while that in rural areas was3,776.8 billion yuan, up by 10.9percent, YoY.

From January to October, the national online retail sales of goods and services was 3,928.8 billion yuan (US$570 billion), increased 25.7% YoY. Of which, the online retail sales of physical goods was 3,174.0 billion yuan, increased 24.9%, accounting for 11.8% of the total retail sales of consumer goods; Of the online retail sales of physical goods, food, clothing and other commodities went up by 28.8%, 17.1% and 27.8% respectively.

Chinese Consumer Confidence measured at 105 in Q1 2016, a decrease of two points from Q4 2015 but still the sixth most confident country in the world, according to the latest Nielsen survey.

Confidence in East China increased from 115 to 117, boosted by local consumers’ promising personal finance prospects. Consumers in East China are more optimistic regarding their personal finances, with 76% respondents saying they have good or very good expectations for their personal finances in the coming 12 months.

The stronger demands for high quality products have pushed forward the trend of consumption upgrading in China. China’s regions have developed at different speeds and consumer trends vary greatly among different groups and regions. Understanding the preferences and mindset of consumer groups is the key to successfully expanding a business in China, according to Yan Xuan, president of Nielsen Greater China.

Willingness to spend remains strong across cities, especially in lower tier cities, which drives sales growth. But in tier 1 cities, expectation of rising real estate prices drive down people’s willingness to spend.

In towns and rural China, with the rising disposable income, people’s willingness to spend keeps increasing, which ultimate boosted people’s intension to travel, although the number is still fewer compared to upper tier cities.

The results offer further evidence of a trend toward rising consumer spending power in the country’s less-developed rural areas.

Men’s willingness to spend hit 54 in the first quarter, higher than female consumers at 49. Men’s rising enthusiasm for spending is mainly derived from their promising expectations on employment prospects and personal financial situation.

Some 38% of the female respondents said they would stock up on goods taking advantage of sales, discounts or promotions. By contrast, only 32% of male respondents said they would do the same. Male consumers are also less likely to make impulsive purchases affected by the promotional activities, with 46% saying they only buy things they need. Only 39% of the women surveyed said they will do so.

The survey also found that male consumers tend to put more of their discretionary money into savings or family improvement while female consumers prefer new clothes and skin care and cosmetics, both online and offline.

There are other differences between men and women when it comes to online shopping behavior as well. Men prefer to buy electronic and gaming products (26.09%), while women spend more money on cosmetics and personal care products (26.96%). The survey also found that both male and female consumers spend the most discretionary spending money on clothing (70% vs 80.47), household goods (33.75% vs 36.88%) and food, beverage and health products (14.37% vs 12.91%).

Also read: Chinese Consumers More Selective on Spending Habits

Total retail sales of consumer goods reached 30,093.1 billion yuan (US$4,573.5 billion) with an annual growth rate of 10.7% in China in 2015. Online retail sales reached 3,877.3 billion yuan (US$589.3 billion) with an annual increase of 33.3% in 2015.

Total retail sales of China consumer goods maintained a slow but steady growth rate in 2015. The retail sales of consumer goods by enterprises were 14,255.8 billion yuan (US$2,166.6 billion) in 2015 with an increase by 7.8% compared with 2014. Retail sales in urban areas reached 25,899.9 billion yuan (US$3,936.2 billion) with a YoY increase of 10.5% and the retail sales in rural areas reached 4,193.2 billion yuan (US$637.3 billion) with a YoY increase of 11.8% in 2015.

Grouped by consumption patterns, the income of the catering industry was 3,231.0 billion yuan (US$491.0 billion) with an increase by 11.7% and the retail sales of goods were 26,862.1 billion yuan (US$4,082.4 billion) with an increase of 10.6% in 2015.

China online retail sales reached 3877.3 billion yuan with an increase of 33.3% in 2015. Retail sales of online physical goods were 3,242.4 billion yuan (US$492.8 billion) with an increase of 31.6% accounting for 10.8% of the total retail sales of consumer goods in 2015. Retail sales of non-physical goods online were 634.9 billion yuan (US$96.5 billion) with an increase of 42.4% in 2015.

Total retail sales of consumer goods reached 2,863.5 billion yuan (US$435.2 billion) with a year-over-year increase of 11.1% (a real growth of 10.7 percent after deducting price factors) and month-over-month of 0.82% in December 2015.

Retail sales in urban regions reached 2456.6 billion yuan (US$373.3 billion) with an increase of 10.9% and sales in rural regions reached 406.9 billion yuan (US$61.8 billion) with an increase of 12.0% in December 2015.

Revenues of the catering industry reached 303.0 billion yuan (US$46.0 billion) with a YoY increase of 11.2% in 2015 and the retail sales of goods were 2560.5 billion yuan (US$389.1 billion) with a YoY increase of 11.0% in December of 2015.

Also read: China Online Luxury Shoppers Insights in 2015

According to news on press conference on 3 February 2015, the number of China travelers to countryside in 2014 was over 1.2 billion person-trips. China countryside now can provide various kinds of service for travelers around the world.

74% rural residents would like to travel in 2014 according to China Tourism Industry Report in 2014 released by China Tourism Academy. Travelers’ need is increasing. See online travel market overview in 2014 here.

Rural areas in China can supply agricultural products as well as service for people, such as rural home food and accomodations.

Chen Xiwen, one member in charge of rural business in China, said that China travelers to countryside accounted for 30% of total travelers in China in 2014. Besides, revenue from countryside traveling was RMB320 billion (US$52.21 billion). At present, there are 2 million rural home inns and 100,000 specialized towns in China.

Also read: China Rural Online Shopper Insights in 2015

China online shopping market is becoming mature. The e-commerce providers now are exploring markets in rural areas in China. Alibaba, Jingdong and other e-commerce giants are making efforts in online shopping market. Tencent’s latest research shows China’s rural online shoppers have great potential.

PHOTOS: How China Internet Companies Advertise in Rural Areas

64% China rural internet users shop online via mobile phone in 2015. China mobile internet’s rapid development stimulates rural online shoppers’ consumption.

43.5% rural internet users visit e-commerce websites for many times in a week in 2015; e-commerce websites are popular among rural internet users.

When it comes to purchasing online, the frequency is much lower; only 28.2% of them shop online for at least once a month in 2015.

73.6% respondents from rural areas in China use Tmall and Taobao for online shopping in 2015. Besides, 3.6% rural internet users shop on foreign e-commerce websites.

Top 3 categories of products among rural online shoppers are home appliance & digital product, clothing, agriculture tool in 2015 in China.

34.7% rural online shoppers are sensitive about prices most among all factors that affect their decisions for purchase, followed by quality and post-sale service in 2015.

In rural areas in China, 17.6% online shoppers complain about home express service in 2015 which shows that logistics system is still not completed in rural areas. In terms of payment, online shoppers from urban or rural areas have no such big difference. With cloud technology and mobile platform, Alipay aims to improve medical, public transportation, public services in third & fourth tier cities, and help popularize mobile finance service in rural China.

E-commerce giants have placed ads in rural areas since the second half of 2014 in China while 40.7% rural respondents still seldom see ads in 2015.

There are 78.3% rural respondents who never use financial service on e-commerce websites in 2015.

Also read: Over 60% of China’s Rural Internet Users are Online Shoppers

25% more rural shoppers than tier-1 and tier-2 city dwellers report feeling more ‘empowered’ and see themselves as ‘online gurus’ who are eager to be the first to try out new products.

Growth in online shopping in counties and villages in China has outpaced those in cities, becoming a new engine that is further driving China’s domestic consumption, according to research from Alibaba Group.

In Q2 2012, China’s online shopping on Taobao by people in rural areas accounted for 7.11% of total; by Q2 2014, the rate increased to 8.3%. Online shopping is a rising trend in rural China. Read an overview of rural China’s e-commerce market here.

Related: Tips for Reaching China Rural Consumers for E-commerce Marketing

Check out photos of how China Internet companies advertise in rural areas here.

Read more: 74% Chinese Rural Residents Willing to Travel in 2014

In December 2014, the total retail sales of China consumer goods reached 2,580.1 billion yuan ($414 billion), up by 11.9% year-on-year according to National Bureau of Statistics of China.

China’s retail sales of consumer goods of units above designated size was 1,427.4 billion yuan, increased 9.4%. In 2014, the total retail sales of consumer goods reached 26,239.4 billion yuan ($4,209 billion), with a nominal growth rate of 12%, and a real growth rate of 10.9%. Of which, the online retail sales of units above designated size was 13,317.9 billion yuan, increased 9.3%.

In 2014, China online retail sales was 2,789.8 billion yuan, increased 49.7% year-on-year. Of which, the online retail sales of units above designated size was 440.0 billion yuan, increased 56.2%.

In 2014, the retail sales of consumer goods in China urban areas was 22,636.8 billion yuan, up by 11.8 percent year-on-year; while that in rural areas was 3,602.7 billion yuan, up by 12.9%.

The catering services in December gained 272.8 billion yuan, up by 10.1%. The retail sales of goods gained 2,307.4 billion yuan, up by 12.1%. In 2014, the catering services gained 2,786.0 billion yuan, up by 9.7 percent, year-on-year; the retail sales of goods gained 23,453.4 billion yuan, up by 12.2%.

The retail sales amount of goods of units above designated size in December was 1,342.9 billion yuan, up by 9.7 percent. In 2014, the retail sales amount of goods of units above designated size was 12,497.1 billion yuan, up by 9.8%.

Read more: China E-commerce Market in 2014

According to National Bureau of Statistics of China, GDP of China was 63,646.3 billion yuan (USD 10,239.9 billion) in 2014, an increase of 7.4% at comparable prices.

The year-on-year GDP growth of the first quarter in 2014 was 7.4%, the second quarter 7.5%, the third quarter 7.3%, and the fourth quarter 7.3%. The gross domestic product of the fourth quarter of 2014 went up by 1.5% quarter-on-quarter.

Agricultural Production

China’s total grain output in 2014 was 607.10 million tons, an increase of 5.16 million tons, up by 0.9%.

• Summer grain: 136.60 million tons, an increase of 3.6%
• Early rice: 34.01 million tons, a decrease of 0.4%
• Autumn grain: 436.49 million tons, an increase of 0.1%
• Cereals: 557.27 million tons, an increase of 0.8%
• Cotton: 6.16 million tons, a decrease of 2.2%
• Pork, beef, mutton and poultry: 85.40 million tons, an increase of 2.0%
• Poultry eggs: 28.94 million tons, an increase of 0.6%
• Milk: 37.25 million tons, an increase of 5.5%

Industrial Production

The total value added of the industrial enterprises above designated size in 2014 was up by 8.3% at comparable prices.

An analysis by types of ownership showed that the value added growth of:

• the state-owned and state holding enterprises: 4.9%;
• collective enterprises: 1.7%;
• share-holding enterprises: 9.7 percent;
• enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan: 6.3%

Out of the 464 kinds of industrial products, the output of 329 kinds realized an increase compared with last year. In 2014, the sales-output ratio of industrial enterprises above designated size reached 97.8%. The export delivery value of these enterprises reached 12,093.3 billion yuan, up by 6.4%.

In December, the total value added of the industrial enterprises above designated size was up by 7.9% year-on-year or up by 0.75% month-on-month.

Investment in Fixed Assets

In 2014, the investment in fixed assets (excluding rural households) in China was 50,200.5 billion yuan, the nominal year-on-year growth of 15.7% over last year (a real growth of 15.1% after deducting price factors).

• The investment by the state-owned and state holding enterprises: 16,162.9 billion yuan, a rise of 13.0%
• Private investment: 32,157.6 billion yuan, up by 18.1%, accounting for 64.1% of the total investment

The growth in eastern, central and western regions was 14.6%, 17.2% and 17.5% respectively.

The total investment in real estate development in 2014 was 9,503.6 billion yuan, a nominal growth of 10.5% (a real growth of 9.9% after deducting price factors). In particular, the investment in residential buildings went up by 9.2%.

China Retail Market

In 2014, China’s total retail sales of consumer goods reached 26,239.4 billion yuan, a nominal annual rise of 12.0% (a real growth of 10.9 percent after deducting price factors).

The retail sales in urban areas reached 22,636.8 billion yuan, up by 11.8%; and the retail sales in rural areas stood at 3,602.7 billion yuan, up by 12.9%.

The income of catering industry was 2,786.0 billion yuan, up by 9.7%; and the retail sales of goods were 23,453.4 billion yuan, up by 12.2%.

In December, the nominal growth of total retail sales of consumer goods was 11.9% over last year (a real growth of 11.5% after deducting price factors), or 1.01% month-on-month.

In 2014, the online retail sales reached 2,789.8 billion yuan, an increase of 49.7% compared with last year and the online retail sales of the enterprises (units) above designated size stood at 440.0 billion yuan, up by 56.2%.

Imports and Exports: Slowed Down

The total value of imports and exports in 2014 was 26,433.5 billion yuan, an increase of 2.3%. The total value of exports was 14,391.2 billion yuan, up by 4.9%; the total value of imports was 12,042.3 billion yuan, a decrease of 0.6%. The trade balance was 2,348.9 billion yuan in surplus.

In December, the total value of imports and exports was 2,490.1 billion yuan, the year-on-year growth of 4.2%. Of this total, the value of exports was 1,397.3 billion yuan, up by 9.9%; and that of imports was 1,092.8 billion yuan, down by 2.3%.

Consumer Price: Increased at a Low Rate

In 2014, the consumer price went up by 2.0% in China. The price went up by 2.1% in urban areas and 1.8% in rural areas.

• Prices for food rose by 3.1%
• tobacco, liquor and related articles decreased by 0.6%
• clothing up by 2.4%;
• household facilities, articles and maintenance services up by 1.2%
• health care and personal articles grew by 1.3%
• transportation and communication down by 0.1%
• recreation, education, culture articles and services up by 1.9%
• housing up by 2.0%

Grain grew up by 3.1%, oil or fat down by 4.9%, pork down by 4.3%, fresh vegetables down by 1.5%.

In December 2014, the consumer prices went up by 1.5% year-on-year, or 0.3% up month-on-month. In 2014, the producer prices for industrial products went down by 1.9% compared with last year, while the price in December dropped by 3.3% year-on-year and 0.6% month-on-month. The purchasing price for industrial producers was down by 2.2% compared with last year and in December, the price was down by 4.0% year-on-year and 0.8% month-on-month.

Residents’ Income: Continued to Increase

Based on the integrated household survey, the national per capita disposable income was 20,167 yuan in 2014, a nominal growth of 10.1% or a real increase of 8.0% after deducting price factors.

In terms of permanent residence, the per capita disposable income of urban households was 28,844 yuan, a nominal growth of 9.0%, or a real growth of 6.8% after deducting price factors.

The per capita disposable income of rural residents was 10,489 yuan, up by 11.2% nominally, or 9.2% in real terms. The median of the national disposal income was 17,570 yuan, a nominal increase of 12.4%.

Taking the per capita disposable income of nationwide households by income quintiles, that of the low-income group reached 4,747 yuan, the lower-middle-income group 10,887 yuan, the middle-income group 17,631 yuan, the upper-middle-income group 26,937 yuan, and the high-income group 50,968 yuan.

The Gini Coefficient for national disposable income in 2014 was 0.469. The per capita net income of rural residents was 9,892 yuan, an increase of 9.2% after deducting the price factors. The number of rural migrant workers at the end of the year was 273.95 million, which was 5.01 million more than that in the previous year, or up by 1.9%. Specifically, the numbers of local and outside workers were 105.74 million and 168.21 million respectively, up by 2.8 and 1.3%. The average monthly income of migrant workers was 2,864 yuan, up by 9.8%.

Industrial Structural: Stable Progress

The industrial structure was further optimized. In 2014, the value of the tertiary industry accounted for 48.2% of GDP, 1.3 percentage points higher than last year, 5.6 percentage points higher than that of the secondary industry.

The structure of domestic demand was further improved. In 2014, the final consumption expenditure accounted for 51.2% of GDP in China, 3.0 percentage points higher than last year.

The income gap between urban and rural households was further narrowed. In 2014, the real growth of the per capita disposable income of rural households was 2.4 percentage points faster than that of urban households. The per capita income of urban households was 2.75 times of the rural households, 0.06 less than last year.

In 2014, the energy consumption per unit of GDP decreased by 4.8% compared with last year.

Money Supply

By the end of December 2014, the balance of broad money (M2) was 122.84 trillion yuan, an increase of 12.2% compared with that at the end of last year; the balance of narrow money (M1) was 34.81 trillion yuan, up by 3.2%; and the balance of cash in circulation (M0) was 6.03 trillion yuan, a rise of 2.9%.

At the end of December, the amount of outstanding loans was 81.68 trillion yuan, while the amount of outstanding deposits was 113.86 trillion yuan. In 2014, the newly increased loans reached 9.78 trillion yuan, an increase of 890.0 billion yuan; the newly increased deposits were 9.48 trillion yuan, or 3.08 trillion yuan less than last year. The social financing reached 16.46 trillion yuan, a decrease of 859.8 billion yuan.

Population and Employment

By the end of 2014, the total population of mainland China was 1,367.82 million (including population of 31 provinces, autonomous regions and municipalities, and servicemen in CPLA; but excluding residents in Hong Kong SAR, Macao SAR, Taiwan Province and overseas Chinese), an increase of 7.10 million over that at the end of 2013.

In 2014, the number of births was 16.87 million and the birth rate was 12.37 in a thousand; the number of deaths were 9.77 million with a death rate of 7.16 in a thousand; the natural growth rate was 5.21 in a thousand, an increase of 0.29 in a thousand.

In terms of gender, the male population was 700.79 million, and female population was 667.03 million; the sex ratio of total population was 105.06 (the female is 100, male to female); the sex ratio at birth was 115.88.

Population at the working age of 16-59 was 915.83 million, a decrease of 3.71 million as compared that at the end of 2013, and it accounted for 67.0% of the total population; population aged 60 and over was 212.42 million, which was 15.5% of the total population; population aged 65 and over was 137.55 million, accounting for 10.1% of the total population.

In terms of urban-rural structure, the urban population was 749.16 million, an increase of 18.05 million over the previous year; and the rural population was 618.66 million, a decrease of 10.95 million. The proportion of urban population to total population was 54.77%.

The population who reside in street communities but with permanent household registration elsewhere and having been away from that place for more than 6 months reached 298 million, which was 9.44 million more than that in the previous year. The migrant population was 253 million, or 8.00 million more. At the end of the year, the total number of employed persons was 772.53 million, or 2.76 million more than that at the end of 2013; the number of urban employed persons was 393.10 million, or 10.70 million more.

Read more: WeChat Li Cai Tong Fund Reached 100 Bln in the First Year

In November 2014, the total retail sales of consumer goods reached RMB2,347.5 billion (US$381.7 billion), up by 11.7% year-on-year (nominal growth rate. The real growth rate was 11.2%). From January to November 2014, the total retail sales of consumer goods reached RMB23,659.3 billion, up by 12.0% year-on-year. 

Of which, the online retail sales of units above designated size was RMB385.8 billion (US$62.7 billion), increased 55.9%.

In terms of different areas, the retail sales of consumer goods in urban areas was 2,031.6 billion yuan in November, up by 11.6%, year-on-year; while that in rural areas was 315.9 billion yuan, up by 12.5%, year-on-year. From January to November, the retail sales of consumer goods in urban areas was 20,420.1 billion yuan, up by 11.8%, year-on-year; while that in rural areas was 3,239.1 billion yuan, up by 12.9%.

In terms of different consumption patterns, the catering services in November gained 254.1 billion yuan, up by 9.8%, year-on-year. The retail sales of goods gained 2,093.3 billion yuan, up by 12%. From January to November, the catering services gained 2,513.3 billion yuan, up by 9.7%, year-on-year; the retail sales of goods gained 21,146.0 billion yuan, up by 12.2%.

Month on Month Growth Rate:

Total Retail Sales of Consumer Goods in November:

Also read: E-commerce to Account for 18% of China’s Total Retail Sales in 2018

In 2013, the e-commerce transaction value of China’s agricultural products exceeded RMB50 billion (US$8.17 billion), said Chen Xiaohua, China’s Vice Agriculture Minister. Informatization has great influence on accelerating transformation of agriculture and developing modern agriculture in China.

China has made positive progress in agricultural informatization in recent years. China agricultural information service system involves over 40,000 agriculture-related sites and 12316 hotlines, covering one third of Chinese farmers.

As of 2013, 3G network covered all towns in China and 91% incorporated villages. In China’s rural areas, over 47 million families have access to broadband with 177 million Internet users. Every household on average owns two mobile phonesin rural areas. It is said that there are over 3,000 agricultural e-commerce platforms set up in China.

Besides, growth in online shopping in counties and villages in China has outpaced those in cities, becoming a new engine that is further driving China’s domestic consumption, according to research from Alibaba Group.

Alibaba plans to invest RMB10 billion ($1.63 billion) in the next 3 to 5 years to establish 1000 county-level operation centers and one million village-level service stations covering one-sixth of rural China.

Also read: PHOTOS: How China Internet Companies Advertise in Rural Areas

The total retail sales of consumer goods reached 2,396.7 billion yuan (US$390.15 billion) in China in October 2014, up by 11.5% year-on-year (nominal growth rate. The real growth rate was 10.8 percent). From January to October 2014, the total retail sales of consumer goods reached 21,311.8 billion yuan, up by 12% year-on-year.

China online retail sales exceeded 1.8 trillion Yuan, 9.64% of total retail from January to September 2014.

In terms of different geographic areas, the retail sales of consumer goods in urban areas was 2,075.4 billion yuan in October, up by 11.4%, year-on-year; while that in rural areas was 321.4 billion yuan, up by 12.4%, year-on-year. From January to October, the retail sales of consumer goods in urban areas was 18,388.6 billion yuan, up by 11.8 % year-on-year while that in rural areas was 2,923.2 billion yuan, up by 13%.

In terms of different consumption patterns, the catering services in October gained 265.7 billion yuan, up by 9.7%, year-on-year. The retail sales of goods gained 2,131.0 billion yuan, up by 11.7%. From January to October, the catering services gained 2,259.1 billion yuan, up by 9.7%, year-on-year; the retail sales of goods gained 19,052.7 billion yuan, up by 12.3%.

Month-on-Month Growth Rate:

Also read: China’s PMI in Oct 2014 Hits Five-month Low

In Q2 2012, China’s online shopping on Taobao by people in rural areas accounted for 7.11% of total; by Q2 2014, the rate increased to 8.3%. Online shopping is a rising trend in rural China.

In 2013, there were 268.94 million migrant workers in China. According to research of Tsinghua University, new generation of migrant workers spend 10% of their salary on clothes, which is mainly through online shopping. And some migrant workers would continue to do online shopping, or even become online shop owners when they are back home in rural areas, such as Wang Xiaobang, who sells agricultural products on Taobao and made a great success.

Rural China’s young people in their 20s or 30s tend to do online shopping, accounting for 23.3% and 32% respectively.

In 2013, 84.6% of Internet users in rural China surf the Internet on mobile phones according to data of CNNIC. By the end of November 30 2013, Taobao (including Tmall ) registered online stores located in China rural areas increased 24.9%, and the number in villages and towns rose 76.3% compared to the end of 2012.

A survey conducted by Wdxh.org in China’s 30 villages shows four characteristics about online shopping consumers in rural China.

1. Rural residents’ spend concentrate on daily expenditure and children’s education. There is great demands in services like clothes shopping, money deposit, utility bills payment and package delivery
2. 84.41% of rural residents accept online shopping
3. Most residents only buy products online which they can not buy in their daily life
4. Rural residents’ spend on online shopping is estimated between RMB500-2,000 per year.

Price advantage, products’ variety and convenience of delivery are three basic reasons for rural residents to shop online.

Tips for Reaching China Rural Consumers

According to the National Bureau of Statistics report, the domestic rural market  represents China’s largest consumer group. There are more than 800 million rural population, 70% of the total 13 million population. To reach rural consumers in China, the following tactics are more effective:

• Television ads
• Painting ads on walls
• Advertise at the rural entrances
• Shopping bags
• Promotion at Local County Markets

It is estimated that total transaction value in rural China’s online shopping market will exceed RMB180 billion ($29.39 billion) in 2014 and in 2016, the value will be over RMB460 billion ($75.11 billion). Growth in online shopping in counties and villages in China has outpaced those in cities, becoming a new engine that is further driving China’s domestic consumption, according to research from Alibaba Group.

PHOTOS: How China Internet Companies Advertise in Rural Areas

The total retail sales of consumer goods reached 2,304.2 billion yuan (US$376.4 billion) in China in September 2014, up by 11.6% year-on-year (nominal growth rate. The real growth rate was 10.8%).From January to September, the total retail sales of consumer goods reached 18,915.1 billion yuan, up by 12.0% year-on-year. The online retail sales was 1,823.8 billion yuan, increased 49.9% year-on-year.

In terms of different areas, the retail sales of consumer goods in urban areas was 1,961.4 billion yuan in September, up by 11.4%, year-on-year; while that in rural areas was 342.8 billion yuan, up by 12.5%, year-on-year. From January to September, the retail sales of consumer goods in urban areas was 16,313.2 billion yuan, up by 11.9%, year-on-year; while that in rural areas was 2,601.9 billion yuan, up by 13.0%.

In terms of different consumption patterns, the catering services in September gained 245.5 billion yuan, up by 8.7%, year-on-year. The retail sales of goods gained 2,058.7 billion yuan, up by 11.9%. From January to September, the catering services gained 1,993.4 billion yuan, up by 9.7% year-on-year; the retail sales of goods gained 16,921.7 billion yuan, up by 12.3%.

Related: China Online Food Ordering Market in 2014

According to National Bureau of Statistics of China, the gross domestic product (GDP) of China in the first three quarters of 2014 was RMB 41,990.8 billion (USD 6,858.5 billion), a year-on-year increase of 7.4%.

Also read: China GDP in Q3 2014

According to National Bureau of Statistics of China, the gross domestic product (GDP) of China in the first three quarters of 2014 was RMB 41,990.8 billion (USD 6,858.5 billion), a year-on-year increase of 7.4%.

China’s year-on-year growth was 7.4% for Q1 2014, 7.5% for Q2 and 7.3% for Q3. The value added of the primary industry was 3,799.6 billion yuan, up by 4.2 percent; that of the secondary industry was 18,578.7 billion yuan, up by 7.4 percent; and that of the tertiary industry was 19,612.5 billion yuan, up by 7.9 percent. The gross domestic product of the third quarter of 2014 went up by 1.9 percent on a quarterly basis.

Agricultural Production Showed Good Momentum.

The total output of summer grain was 136.60 million tons, an increase of 4.75 million tons, up by 3.6%. The output of early rice was 34.01 million tons, a decrease of 125 thousand tons, down by 0.4%. The autumn grain production is expected to get a good harvest again.

In the first three quarters of 2014, the total output of pork, beef, mutton and poultry reached 59.75 million tons, a year-on-year growth of 2.0%. The output of pork reached 39.72 million tons, up by 3.3%.

The Growth of Industrial Production Remained Stable

The total value added of the industrial enterprises above designated size in the first three quarters was up by 8.5% at comparable prices, or 0.3 percentage point lower than that in the first half of the year. The value added growth of the state-owned and state holding enterprises went up by 5.2%; collective enterprises 2.6%; share-holding enterprises 9.9%; and 6.7% for enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan provinces.

The value added of the mining grew by 4.8% on a year-on-year base, the manufacturing by 9.6% and the production and supply of electricity, thermal power, gas and water by 3.1%. The growth rates in eastern, central and western regions were up by 8.0%, 8.5% and 10.6% respectively.

Out of the 464 kinds of industrial products, 346 kinds realized year-on-year increase in output. In the first three quarters, the sales-output ratio of industrial enterprises above designated size was 97.7%, or 0.2 percentage point higher than that in the first half of the year. The export delivery value reached 8,748.3 billion yuan, up by 6.4%. In September, the total value added of the industrial enterprises above designated size was up by 8.0% year-on-year, or 0.91% month-on-month.

In the first eight months of this year, the profits made by industrial enterprises above designated size stood at 3,833.0 billion yuan, up by 10.0% year-on-year. Of this total, the profit from primary activities was 3,587.0 billion yuan, up by 9.6%. The costs for per-hundred-yuan turnover of primary activities of the industrial enterprises above designated size reached 86.06 yuan and the profit rate of the primary activities was 5.52%.

Investment in Fixed Assets Slowed Down.

In the first three quarters, the investment in fixed assets (excluding rural households) was 35,778.7 billion yuan, a growth of 16.1% (a real growth of 15.3% after deducting price factors), or 1.2 percentage points lower than that in the first half of the year.

Investment in the state-owned and state holding enterprises reached 11,236.9 billion yuan, a rise of 14.1%; private investment reached 23,150.9 billion yuan, up by 18.3%, accounting for 64.7% of the total investment.

The growth in eastern, central and western regions was 14.9%, 17.8% and 17.9% respectively. The investment in the primary industry was 864.2 billion yuan, up by 27.7%; the secondary industry 15,018.0 billion yuan, up by 13.7%; and the tertiary industry 19,896.5 billion yuan, an increase of 17.4%. The funds in place for investment in the first three quarters were 39,114.1 billion yuan, up by 12.4%. Specifically, the state budget went up by 14.1%, domestic loans up by 11.2%, self-raising funds up by 16.1%, and foreign investment down by 7.0%. The total planned investment in newly-started projects in the first three quarters was 30,372.9 billion yuan, an increase of 14.4%. In September, investment in fixed assets (excluding rural households) grew by 0.77% month-on-month.

The total investment in real estate development in the first three quarters was 6,875.1 billion yuan, a nominal annual growth of 12.5% (a real growth of 11.7% after deducting price factors), or 1.6 percentage points lower than that in the first half of the year. In particular, the investment in residential buildings went up by 11.3%. The floor space started in the first three quarters was 1,314.11 million square meters, down by 9.3%. Specifically, the floor space of residential buildings went down by 13.5%. The floor space of commercial buildings sold was 771.32 million square meters, down by 8.6%. Specifically, the floor space of residential buildings sold was down by 10.3%. The total sales of commercial buildings were 4,922.7 billion yuan, down by 8.9%. Specifically, the sales of residential buildings were down by 10.8%. The land space purchased for real estate development was 240.14 million square meters, down by 4.6%. By the end of September, the floor space of commercial buildings for sale was 571.48 million square meters, up by 28.0%. The funds in place for real estate development enterprises in the first three quarters reached 8,986.9 billion yuan, up by 2.3%.

Sales on Domestic Markets Enjoyed a Steady Growth.

In the first three quarters, the total retail sales of consumer goods reached 18,915.1 billion yuan, a nominal annual rise of 12.0% (a real growth of 10.8% after deducting price factors), or 0.1 percentage point lower than that in the first half of the year.

The retail sales of the enterprises (units) above designated size stood at 9,423.3 billion yuan, up by 9.5%. Analyzed by different areas, the retail sales in urban areas reached 16,313.2 billion yuan, up by 11.9%, and the retail sales in rural areas stood at 2,601.9 billion yuan, up by 13.0%.

Grouped by consumption patterns, the income of catering industry was 1,993.4 billion yuan, up by 9.7%; and the retail sales of goods were 16,921.7 billion yuan, up by 12.3%. In particular, the retail sales of the enterprises (units) above designated size reached 8,841.4 billion yuan, an annual growth of 10.1%. In September, the total retail sales of consumer goods rose 11.6% year-on-year (a real growth of 10.8% after deducting price factors), or 0.85% month-on-month.

In the first three quarters, the online retail sales reached 1,823.8 billion yuan, a year-on-year growth of 49.9%, and the online retail sales of the enterprises (units) above designated size stood at 288.8 billion yuan, up by 54.8%.

The Growth Rates of Imports and Exports Picked up.

The total value of imports and exports in the first three quarters was 19,422.3 billion yuan or 3,162.6 billion US dollars, an increase of 3.3%, or 2.1 percentage points higher than that in the first half of the year.

The total value of exports was 10,422.4 billion yuan, or 1,697.1 billion US dollars, up by 5.1%; the total value of imports was 8,999.8 billion yuan, or 1,465.5 billion US dollars, an increase of 1.3%. The trade surplus was 1,422.6 billion yuan or 231.6 billion US dollars.

In September, the total value of imports and exports was 2,441.7 billion yuan or 396.4 billion US dollars, up by 11.3%. The total value of exports was 1,315.9 billion yuan or 213.7 billion US dollars, up by 15.3%; and that of imports was 1,125.8 billion yuan or 182.7 billion US dollars, up by 7.0%.

The Growth of Consumer Price was Generally Stable.

In the first three quarters, the consumer price went up by 2.1% year-on-year, or 0.2 percentage point lower than that in the first half of the year. Specifically, the price went up by 2.2% in urban areas and 1.9% in rural areas.

Grouped by commodity categories, prices for food rose by 3.3%; tobacco, liquor and articles down by 0.6%; clothing up by 2.4%; household facilities, articles and maintenance services up by 1.2%; health care and personal articles grew by 1.2%; transportation and communication up by 0.1%; recreation, education, culture articles and services grew by 2.2% and housing went up by 2.3%.

In terms of food prices, grain grew up by 3.1%, oil or fat down by 5.0%, pork down by 4.5% and fresh vegetables down by 1.3%. In September, the consumer prices went up by 1.6% year-on-year, or 0.5% month-on-month.

In the first three quarters, the producer prices for industrial products went down by 1.6% year-on-year, while the price in September dropped by 1.8% year-on-year and 0.4% month-on-month. The purchasing price for industrial producers was down by 1.8% year-on-year. In September, the price was down by 1.9% year-on-year and 0.4% month-on-month.

Residents’ Income Kept Steady Growth.

In the first three quarters, the per capita cash income of rural households was 8,527 yuan, up by 11.8% nominally, or 9.7% in real terms. The per capita disposable income of urban households was 22,044 yuan, a nominal growth of 9.3%, or a real growth of 6.9% after deducting price factors.

Based on the integrated household survey, in the first three quarters of 2014, the national per capita disposable income was 14,986 yuan, a nominal growth of 10.5% or a real increase of 8.2%. The median of the national per capita disposable income was 13,120 yuan, a nominal increase of 12.1%.

By the end of September, the number of rural migrant workers was 175.61 million, which was 1.69 million more than that in the same period last year, or up by 1.0%. The average monthly income of migrant workers was 2,797 yuan, up by 10.0%.

Structural Adjustment Achieved Considerable Progress.

The industrial structure was more optimized. In the first three quarters, the value added of the tertiary industry accounted for 46.7% of the GDP, which was 1.2 percentage points higher than that in the same period last year, or 2.5percentage points higher than that of the secondary industry.

The structure of domestic demand continued to be improved. In the first three quarters, the final consumption expenditure accounted for 48.5% of the GDP growth, which was 2.7 percentage points higher than that in the same period last year. The income gap between urban and rural households was further narrowed.

In the first three quarters, the real growth of the per capita cash income of rural households was 2.8 percentage points higher than the per capita disposable income of urban households. The per capita income of urban households was 2.59 times that of the rural households, 0.05 less than that of the same period last year. Energy conservation and consumption reduction continued to make new achievements. In the first three quarters, the energy consumption per unit of GDP went down by 4.6%.

Money Supply Maintained a Steady Growth.

By the end of September, the balance of broad money (M2) was 120.21 trillion yuan, a year-on-year growth of 12.9%; the balance of narrow money (M1) was 32.72 trillion yuan, up by 4.8%; and the balance of cash in circulation (M0) was 5.88 trillion yuan, a rise of 4.2%.

At the end of September, the amount of outstanding loans was 79.58 trillion yuan, while the amount of outstanding deposits was 112.66 trillion yuan. In the first three quarters, the newly increased loans reached 7.68 trillion yuan, an increase of 404.5 billion yuan; the newly increased deposits were 8.27 trillion yuan, a decrease of 2.99 trillion yuan year-on-year. The social financing reached 12.84 trillion yuan, a decrease of 1.12 trillion yuan year-on-year.

China’s economy grew at its slowest pace in more than five years in Q3 2014 though the data still beats estimates.

Read more: China Consumer Prices Index Up by 1.6% YoY in September

Growth in online shopping in counties and villages in China has outpaced those in cities, becoming a new engine that is further driving China’s domestic consumption, according to research from Alibaba Group.

It said in its first county-level economy and e-commerce forum in its headquarters in Hangzhou on Thursday that the overall online shopping market in China reported a growth of YoY 50% in 2013. The growth rate of online transactions in counties and villages in the same year was 13.6 percentage higher than that of cities’.

According to statistics from Taobao and Tmall, residents in counties and villages in China received a total of 1.8 billion packages in 2013 from the purchases they ordered online and sold 1.4 billion packages online in the same year.

Counties and villages in East China still enjoy an edge in e-commerce, thanks to the advanced manufacturing bases in coastal China.

However, the online transactions generated by counties and villages in North China, Central China and South China, have shown stronger growth momentums, accounting for 30% of the overall online transactions made by counties and villages in China.

Check out photos “How China Internet Companies Advertise in Rural Areas” or find out China’s Top 100 Best E-Commerce Cities.

Source: China Daily

Wall ads in rural areas prove to be a good way of penetrating into lower tier cities; let’s take a look at some of the wall ads of China internet companies.

Taobao and AliResearch released Taobao Village Report 2.0 on December 27, 2013. By the end of November 30 2013, Taobao (including Tmall ) registered online stores located in China rural areas increased 24.9%, and the number in villages and towns rose 76.3% compared to the end of 2012.

Top mobile shopping platforms in China: Taobao, Pinduoduo, JD

The report pointed out that Taobao villages gradually became a new force of the rural economy, in 2013, the number of Taobao villages increased to 20 which brought about 60,000 job vacancies directly and many job opportunities in the logistics and packaging industries indirectly. Taobao village is a unique economic phenomenon in the world.

The definition of Taobao village includes that online stores have to account for above 10% of local families and online transaction surpassed 10 million yuan (USD 1.64 million). These retailers in rural areas based on the Taobao C2C platform, achieved economies of scale and synergy effects.

By December 2013, the discovered 20 Taobao villages located in Hebei, Shandong, Jiangsu, Zhejiang, Jiangxi, Fujiang and Guangdong province. A village in Yiwu city with 2,000 online stores hit 2 billion yuan (USD 328 million) sales in 2013. Many Taobao villages had evolved from grass roots stage 1.0 to stage 2.0, began building their own brands.

According to CNNIC, by June 2013, the number of Chinese netizens reached 591 million, increased 26.56 million compared to the end of 2012. 54.5% of new netizens were from rural areas, and Chinese rural netizens grew to 165 million which accounted for 27.9% of total.

AliResearch estimated that Taobao village would continue growing in the next few years and affect rural economy greatly and deep.

Alibaba takes on Pinduoduo with Taobao Special Offer

In China’s fifth or sixth tier cities, the total number of online shopping users in the first half of 2012 doubled, especially in sixth-tier cities, the growth rate reached 150.6%.

In 2012, the number of online paying users in fourth-tier cities grew by 64%, and the total online payments amounts increased by 68%, surpassing that of the second-tier cities.

By the end of June 2013, total number of China’s netizens reached 591 million, and the mobile phone users reached 464 million. With the mobile provider’s aggressive promotion and the growing purchasing power in the fourth-tier cities, the online shopping force are expanding rapidly.

According to the National Bureau of Statistics report, the domestic rural market  represents China’s largest consumer group. There are more than 800 million rural population, 70% of the total 13 million population.

To maximize the online shopping market share in the rural market is not an easy thing due to the developing internet infrastructure in these areas. Here we share some advice for promotion:

1. Television Ads

The media resources in many rural areas are very limited. China is a large agricultural country, and the rural towns occupy a very large proportion. In rural areas, television is the primary broadcasting media for most families.

2. Painting Ads on Walls

Three big e-commerce operators have already repeatedly used simple painting wall ads in the countryside, with the outside walls as the media for broadcasting purposes.

3. Advertise at the rural entrances

Brainstorm on all the possible entry accesses to rural areas for outdoor advertising, i.e., the  highways, national and provincial highways, buses, minibuses, trains…

4. Shopping Bag

Shopping bags for rural people, are very practical. Ad shopping bags, shopping bags, simple commemorate shopping bags and so on, all of them can be utilized. You can print your logo or Ads on them. For example, Jingdong shopping bags can be often seen in rural areas.

5. Promotion at Local County Markets

People in rural areas mainly go to the local market for shopping and commodity purchase, which is a good place for businesses to promote B2C websites.

After Chinese confidence levels fell to 104 and 105 index points in Q2 and Q3, Chinese consumer confidence in Q4 returned to Q1 levels, ranked the sixth most optimistic country last quarter, according to Nielsen’s China Consumer Confidence Report.

China and the U.S. posted two of the strongest gains of 108 and 83 points respectively, while 60 percent of global markets measured posted confidence declines. Year-on-year, Chinese consumers spent more on out of home entertainment (+8), new technology purchases (+5), clothes (+5), dining out (+4) and vacations (+4) according to Nielsen.

At the end of last year, Chinese consumers topped global rankings for discretionary spend on out-of-home entertainment, technology spend and investing in the stock market and were the second biggest discretionary spenders on new clothes (after Russian consumers).

Rural consumers in China remained the most optimistic region with a four index point confidence gain 110 to 114, its highest level in the last three quarters and six points above the national average of 108. Consumer in rural areas enjoyed the highest confidence on employment (89%) and income (73%) prospects followed by consumers in lower tier cities.

Consumers in tier one were the most willing to spend (44%) compared to 33% a year ago, followed by consumers in tier two (43%).

Income, health and increasing food prices to be the top concerns for Chinese consumers nationwide. Differences in concerns prevailed across tier cities and rural areas. Income (72%) was the main concern for rural consumers, followed by health (32%) while in tiers 1 to 4 cities, consumers maintained similar concern levels for income and health.

According to Nielsen, total fast moving consumer goods (FMCG) sales for 2010 increased by 17 percent year-on-year, with non food FMCG sales accelerating at a faster pace than food sales. Other foods (mainly edible oil +24%), Personal Care (+23%) and Impulse Foods (19%) showed growth in 2011. FMCG sales increased 19 percent year on year in the latest quarter.