Participants at a recent global conference said that China’s consumption upgrades have forced companies to improve the quality of their products.
“Improving quality and service is the key to consumption upgrades,” said Li Baofang, chairman of Kweichow Moutai Co., a Chinese liquor company, who has been at the forefront of providing better service to its customers.
During the Boao Forum for Asia Annual Conference held in Hainan Province, South China in 20100, Li held a panel discussion on consumption: upgrading or downgrading.
Moutai closed in 2018 with a net profit of RMB 35.2 billion (US$5.2 billion), a 30% increase over the same period in 2017. In the past two weeks, its market value has exceeded 1 trillion yuan, and added that the company’s share price appreciation directly reflects China’s consumption upgrade.
Li said that Maotai will increase its production capacity by 6,000 metric tons by the end of this year, with an annual production capacity of 56,000 tons. “After that, we will stop capacity expansion for a long time to minimize the harmful effects on the environment,” he said.
Wang Junzhou, president of China’s home appliance retailer Gome Retail Holdings Co., Ltd. believes that the company is entering a new era, and its focus is no longer limited to narrowing the market gap, but to expand existing appliances.
“The smart home environment is one of the most visible changes brought about by the upcoming 5G era,” Wang said. “Smart home solutions are made up of artificial intelligence, speech recognition and deep learning technologies and are typical examples of consumer upgrades.”
Wang Zhonglei, co-founder, vice president and CEO of Huayi Brothers Media Co., said that content upgrades are very important, especially for the cultural industry and the film industry.
China has become the world’s second-largest film market, and the frequency of per capita film visits has increased from 0.1 times to 2 times in the past decade. Wang said that the number of films produced in China from 100 to 100 in the same period reached 1,000.
“This is partly due to the development of the Internet, because it has instilled a passion for film in many people, but we need to upgrade technology to support sustainable development,” Wang said.
Robert Asper, president of Cargill Asia Pacific and managing director of Cargill’s Agricultural Supply Chain Asia, said the 150-year-old company began investing in China 40 years ago, witnessing the country’s consumption upgrades and industrial upgrades.
“Small farmers planting vegetables are now doing business on WeChat,” Aspell said, adding that sustainability is important for doing business. He said that Asia needs to maintain trade with the rest of the world and the rest of the world.
Chinese consumers’ online shopping has played an important role in the development of the US food company Mars, and the company’s senior vice president Andy Faroya said that more than 50% of pet food sales in China come from online platforms.
“China’s sales account for 6% of our total revenue, and we hope to increase this number to 15% in the near future,” Pharoah said, adding that consumers are growing with individual needs.
“Consumers are now asking for more,” said Wilfred Wong, president and executive director of Sands China, an Australian integrated resort developer and operator, which is a subsidiary of Las Vegas Sands.
Wong said that in the Sands China project, casinos accounted for only 4% of the total area, while the rest were developed into hotel rooms, restaurants and entertainment facilities, adding that the industry needs to provide a more personalized one-stop service.
Wang Wei, founder and CEO of CEC Capital Group, China’s leading private investment bank, said that consumption growth is imperative given China’s rapid economic growth and per capita disposable income.
“Consumption downgrades are more relative because it’s only for a while or a certain group of people,” Wang said.
“By 2021, people under the age of 35 will account for 67% of the Chinese consumer market,” Wang said. “Z generation, or 95 years later… will bring more (market) changes, which will lead to new consumer experiences, scenarios and brands.”
