GBA Brief

Guangdong’s consumers show the way on shopping

Retail sales in Guangdong grew 6.9% year-on-year to Rmb1.02 trillion in the first quarter, according to the statistics bureau. That makes the Greater Bay Area’s home province the biggest consumer market nationwide. 

Did someone mention a trade war? In Guangdong it doesn’t seem to be slowing consumer spending. Behind the numbers are major changes in how people are shopping as well. 

Many consumers are more willing to splash out on better quality products. Take groceries, where local suppliers have been struggling to meet new demand for premium vegetables and meat. The shortages are creating new opportunities across the supply chain: for overseas exporters, importers, logistics companies and retailers.

At one AEON-run MaxValu supermarket in Guangzhou, nearly half of the fruit being sold is imported, according to Yangcheng Evening News. That includes American oranges, Belgian pears, Chilean cherries and Mexican avocados

The trend, often described as a “consumption upgrade”, is great for cross-border e-commerce as well, where shoppers source other products from around the world. Sales on platforms like JD Worldwide soared 62% in the first four months of the year, hitting Rmb23.7 billion, according to customs data.

In a similar vein, people are trading up from more basic necessities into categories like beauty products and going to the gym. Purchases once considered as a treat or a luxury are starting to become a part of everyday life for millions of people. 

Tourism is also taking hold and the region’s increasingly well-connected railways are spurring retail sales. During the three-day break for the Dragon Boat Festival at the start of June more than 20 million outsiders came to Guangdong. Guangzhou, the capital, was the third most favoured destination for domestic holidaymakers, says online travel giant Ctrip.

While big cities like Guangzhou and Shenzhen are the key engines for retail sales, lower-tier cities such as Huizhou and Zhaoqing are also making headway, partly because of their lower housing costs, which frees up more discretionary spend.

Across the GBA, younger people tend to spend more than their elders too. And Guangdong’s retail market is also serving as a testing ground for new technology. Apart from the now ubiquitous mobile payment, facial recognition is being adopted to shorten supermarket queues, as seen at nearly a thousand 7-11 convenience stores across the province. Even older-style retailers know they have to adapt by selling more of their goods online and by partnering with delivery startups to make life easier for shoppers. 

The provincial government doesn’t want anyone to miss out, turning to live-streaming platform Kuaishou in a Rmb3 billion initiative to help thousands of local villages sell their agricultural goods over the next three years.

China’s fragmented retail sector is a shifting landscape in general, but where better than Guangdong for gleaning the latest trends?

Sponsored content