To promote domestic consumption of high-quality products and services and thereby stoke high-quality economic development, it is necessary to further boost domestic brands, said Bai Chongen, dean of Tsinghua University’s School of Economics and Management.
Bai, who is also a member of the country’s top political advisory body, said that expanding household consumption, which now accounts for a relatively low proportion of the country’s GDP, is of great significance for fostering the dual-circulation economic pattern, where domestic and foreign markets boost each other, with the domestic market as the mainstay.
According to the National Bureau of Statistics, China’s per capita consumption expenditure in 2020 was 21,210 yuan ($3,264), while its per capita GDP is expected to reach 72,447 yuan, up 2 percent over the previous year.
The fact that domestic brands are not given full play was one of the major reasons that led to insufficient household consumption, Bai said.
As consumer incomes increase, there is a growing need for branded products. And homegrown brands are increasingly being favored by Chinese consumers in recent years because the brands’ design and production ability has improved and consumers are more culturally self-confident, he said.
Bai suggested greater efforts in cracking down on brand infringements to create a business environment where companies are enthusiastic about developing domestic brands.
Since many domestic brands, especially those in consumer goods, originated from small and medium-sized enterprises, it is necessary to improve the development environment for SMEs, Bai said.
While e-commerce makes it easier for domestic brands to reach consumers, a better e-commerce environment will enable SMEs to expand the recognition and impact of the domestic brands they created, Bai said.
He also stressed efforts to revitalize traditional brands and lift restrictions on time-honored Chinese brands.
“If we could make more progress in letting various types of market entities participate in the operation of time-honored brands, the value of such brands will be better revealed,” he said.
In February, the latest consumer insights report on China published by consumer-focused private equity firm L Catterton showed that China’s Generation Z consumers are driving the growth of domestic Chinese brands due to their rising purchasing power.
Born between 1996 and 2010, this group of young consumers accounts for 17 percent of China’s population but 25 percent of total expenditure on new brands, the report said. (Source: global.chinadaily.com.cn)