Introduction to this report:
New changes have taken place in China's economy and population, and new trends in residents' consumption are emerging. Referring to the experience of the United States and Japan, the new trend of Chinese consumption: the proportion of service consumption has increased, commodity consumption has paid more attention to high cost performance, and the importance of emotional value has increased.
Summary:
Look for new consumption trends from economic and social changes. ① Since 2021, the trend of consumer stocks has been weak, and the decline of real estate has had an impact. However, experience at home and abroad shows that consumption is an important base for long-term bull stocks. ② The main line of consumer stocks leading the rise changes with economic and social development. Food, drink and medicine will lead the way for a long time before 2020; Retail led the rise before 2006; The real estate chain led the rise in 2007-13 and 2016-20; Social services led the rise in 2014-20. ③ At present, the domestic economy and population have undergone significant changes, and new consumption trends are emerging. Since 2023, the rapid development of cost-effective consumption represented by Pinduoduo, and the booming demand for concerts and other entertainment, whether these can evolve into long-term consumption trends is worth considering. We choose the United States and Japan, which have rich economic and demographic evolution data and developed consumer markets, as experience references.
Japan's experience: the economy and population are jointly affected, and the service/cost performance ratio consumption is growing against the trend. ① 1994 was the watershed of Japan's consumption. The growth rate of total consumption fell, commodity consumption shrank, and service consumption increased, mainly due to the long-term downturn in the economy and the change in the structure of the total population. ② Service consumption: In 1981, the per capita GDP broke 10000 US dollars, and the service consumption accounted for more than 50% and continued to increase. After 1994, science and technology and medical care were important contributions. The aging, childless and single population trend accelerated, and medical and self pleasing entertainment consumption rose. ③ Commodity consumption: The propensity of consumption has changed from individualization and branding to simplicity and parity. After the bursting of the real estate bubble, the economy has continued to be depressed. The lack of confidence of residents has curbed the consumption of durable goods and semi durable goods. The middle-class families have been severely impacted and consume more rationally, and the slowdown in population growth has also become a drag. ④ The breakthrough case, Uniqlo parity and sailing strategy were successful.
American experience: service/entertainment consumption increases rapidly, and the trend of commodity consumption parity also appears. ① The total consumption of the United States has been strong for a long time, benefiting from economic growth and strong willingness of residents to borrow and consume; Service/entertainment consumption increased significantly, and commodity consumption differentiated. ② Service consumption: In 1970, the per capita GDP of the United States exceeded 5000 US dollars, and the service consumption accounted for more than 50% and continued to increase. Medical/entertainment/finance was the main contribution. The aging population increased the medical demand, and the migrant population made the structure of the labor force and youth steadily promote the entertainment demand. ③ Commodity consumption: while maintaining the purchasing power of luxury goods, cost performance consumption rose in the 1980s and 1990s. The core is that the oil crisis and the scientific and technological revolution led to the widening of income differentiation, and the middle and low income groups are more pursuing rational consumption. ④ In a typical case, Costco provides cost-effective products in a way consistent with American consumption habits, and its scale growth and stock price performance are outstanding.
New consumption trend in China: the proportion of services has increased, and cost-effective consumption has risen. ① American and Japanese experience: the proportion of service consumption increases after the per capita GDP is high; Shifting of economic growth has greater impact on middle-income groups, and commodity consumption is more cost-effective. ② New trend 1: China's per capita GDP is close to that of the US and Japan in the 1980s, and the proportion of service consumption is still low. The aging, childless and single population trend is accelerating, and the medical/entertainment demand drives the proportion of services to increase. ③ New trend 2: economic structure transformation, short-term real estate downturn affects consumption expectations, the proportion of low-income groups increases under the long-term common prosperity policy, and commodity consumption pays more attention to high cost performance. ④ New trend 3: After the basic consumption demand is met, the pressure of social life will increase, and the emotional value consumption demand will increase against the background of the aging and single population trend. ⑤ Recommend the service consumption (medical service/insurance/games/digital media), commodity consumption (cost-effective consumption/popular products/cross-border e-commerce), and emotional value consumption (tourism, pets, and fun) that benefit from the new trend.
Risk warning: the effectiveness of historical experience declines; The policy is not as expected; Geopolitical uncertainty.
