(Photo/NBD)

Nov. 27 (NBD) -- The sales of Double 11 Shopping Festival hits a new record this year, whereas traditional department stores have a few customers, which indicates ongoing changes in China's consumer market.

China is now at the stage of consumption upgrade, Zhao Ruijun, director and president of Gangtai Holding, commented at the 2017 China Consumption Upgrade and Retail Innovation Forum which kicked off on 24th November in Chengdu, capital of Southwest China's Sichuan Province.

Zhao introduced that in 2016, the country's GDP per capita amounted to 8,866 U.S. dollars. The compound average growth rate (CAGR) of consumption of high-income population will reach 17 percent from 2015 to 2020, and such group will become the major driving force of luxury products consumption.

As consumption is one of the driving forces of China' economic growth, its upgrade will provide opportunities for enterprises, especially traditional ones. 

For food producers, grasping the trend of consumption upgrade is beneficial for the companies' business operation, Mao Hongbin, COO of Hunan Dakang Pasture Farming Co., Ltd., noted.

Zhang Chen, director and vice general manager of LAF Co., Ltd., pointed out that consumption upgrade will benefit the company in two aspects. It will not only push up the price range, leaning towards high-end consumption, but also change the company's sales channels.

The year 2017 witnesses great reform in China's retail industry. The new concepts of "New Retail" advocated by Alibaba and "Unbounded Retail" introduced by JD.com have triggered heated discussion.

In addition, new business models which embrace new technologies including unmanned aerial vehicle (UAV) delivery and self-service supermarkets keep emerging.

Technology innovation creates numerous opportunities for Chinese market, said Wang Yao, vice president of China General Chamber of Commerce (CGCC) and director of China National Commercial Information Center, adding that with a fast growth of the market, all retail business models existing around the world will take shape in China.

Xiao Jun, vice president of JD Group Ltd. and president of JD X, said that the technological progress and increasing consumer demand will promote the development of the unbounded retail and bring the life that people have dreamed about into reality.

Chen Xiaodong, CEO of Intime Retail Group (Photo/NBD)

With regard to reform of retail channels, Chen Xiaodong, CEO of Intime Retail Group told NBD that the new retail brought by retail channel reform will at least bring benefits in three aspects. 

He further explained that firstly, the new tail enables products to connect and interact with consumers via internet, forming a network structure which is essentially different from a centralized tree structure.

Secondly, new retail will enhance the integration and optimization of the supply chain with the application of internet technology and people being digitalized and networked.

Besides, the new retail also promotes the intellectualization and application of technology in all aspects of retailing, which will improve the efficiency of the whole supply chains and the production of goods.

Moreover, the retailers will be able to find consumer demands using big data and provide tailored services for consumers, Chen said.

Chen added that O2O mode is more like a way to combine solutions rather than a solution itself. In the retail industry, retailers, brands and the internet should be integrated and in new retail, these three parties should make changes together, like interchanges of the dominant power of the buyers and the sellers, changes in the relationship between retails and the manufacturers as well as in the relationship between employees and enterprises, noted Chen.

Email: zhanglingxiao@nbd.com.cn