Chinese rural areas embrace new opportunities with growing consumption of big-ticket items

Recently, Zhong Congxue, a rural resident in Jining city, east China’s Shandong Province, bought a mini new energy vehicle (NEV) at a promotional campaign aiming to boost the sales of NEVs in rural areas.

File photo shows a visitor looking at a new energy vehicle (NEV) during a promotional activity for NEVs in rural areas held in Kunming, southwest China's Yunnan Province. (Xinhua/Jiang Wenyao)

“I am very satisfied with the vehicle,” said Zhong, who got a driver’s license not long before buying the vehicle, adding that it’s easy to park. More importantly, it helps save money on fuel, Zhong added.

Sales of big-ticket items such as automobiles, home appliances, and furniture account for a large proportion of China’s retail sales for consumer goods. The consumption market at the township and village levels across China represents 38 percent of the country’s total, and with this market segment boasting a huge potential for future growth.

In April, the General Office of the State Council released guidelines on further tapping the country’s consumption potential. According to the guidelines, China intends to encourage those localities in rural areas with favorable conditions to promote increased spending on NEVs and smart home appliances.

On May 31, the Ministry of Industry and Information Technology, the Ministry of Agriculture and Rural Affairs, the Ministry of Commerce, and the National Energy Administration issued a circular aimed at launching a new round of promotional campaigns focused on boosting sales of NEVs in the country’s rural areas.

Statistics from the China Association of Automobile Manufacturers have shown that a total of 1.1 million NEVs were sold in China’s rural areas last year during such promotional campaigns directed at spurring sales of NEVs, surging 169.2 percent year-on-year, 10 percent higher than the growth rate for the country’s overall NEV market.

Aside from NEVs, green and smart home appliances have also been gaining enormous popularity among rural consumers.

Many townships are growing at a faster rate than first and second-tier cities when it comes to the consumption of smart home appliances, said Yu Yong, president of the B2B platform 1688.com, which is owned by Chinese e-commerce giant Alibaba Group.

Thanks to the rapid economic development in counties and townships, as well as the continued growth of resident’s disposable incomes, consumers in counties are more willing to buy medium-and high-end products, said Wang Yun, deputy director of the international economics research institute at the Chinese Academy of Macroeconomic Research, a think tank under the National Development and Reform Commission.

China has recently introduced many policies to promote consumption and stabilize growth, which has bolstered consumption in counties, Wang noted, adding that spending on big-ticket items will see new growth opportunities in the years ahead.