Actively Developing Time-Saving Consumption to Release Residents' Consumption...

Actively Developing Time-Saving Consumption to Release Residents' Consumption Potential
 

Time is the most valuable resource for everyone, and it is also an important budget line that constrains residents' utility maximization. In recent years, the pursuit of "speed" by residents has been a significant trend in consumption upgrades. The shift from offline consumption to online consumption leads to the integration of the two consumption models; various household production activities, such as cooking, laundry and cleaning, are transitioning to social production activities. During the pandemic, instant retail, characterized by "local stores plus instant delivery", became increasingly popular among consumers, and this change in consumption trend was sustained and consolidated in the post-pandemic era. However, as time-saving consumption models are often new forms of business that have emerged with the development of the digital economy, they face issues such as unclear regulatory authority, lagging policy standards, inadequate supply of related infrastructure, and especially insufficient supply of consumption in rural areas. It is recommended to strengthen comprehensive interdepartmental regulation, adhere to inclusive and prudent regulation, improve related infrastructure, enhance rural consumption supply, and leverage the advantages of urban consumption agglomeration.

"Speed" is an Important Dimension to Meet Residents' Consumption Needs

The pursuit of "speed" has been a significant trend in recent years, driven by consumption upgrades among residents. China's life services industry has been undergoing rapid digital transformation, leading to a shift from offline consumption to online shopping. The integration of online and offline consumption allows people to save costs, especially time. In commodity consumption, online consumption is growing faster than overall consumption. Between 2015 and 2023, the annual growth rate of online retail sales of physical goods averaged 18.7%, 11.7 percentage points higher than the growth rate of total retail sales of consumer goods. The proportion of online retail sales of physical goods in total retail sales increased from 10.8% in 2015 to 27.6% in 2023. In service consumption, various household production activities, such as cooking, laundry and cleaning, have shifted to social production, allowing residents to focus their time on more valuable pursuits. According to data from the National Bureau of Statistics, the ratio of dining out to total food consumption in the annual per capita consumption expenditure of urban residents in China rose from 9.1% in 1995 to 21.8% in 2012. Between 2013 and 2019, the ratio of food service expenditure to total food, tobacco and alcohol expenditure in the per capita cash consumption expenditure of national residents rose from 16.8% to 23.1%. According to data from the China Internet Network Information Center (CNNIC), the usage rate of online food delivery among residents increased from 16.5% at the end of 2015 to 52.7% at the end of 2021.

During the pandemic, the importance of "speed" became even more pronounced. With limited activities and scenarios, as well as logistical constraints in some cities, residents were particularly concerned about timely, sufficient and convenient access to essential living supplies, such as fresh fruits and vegetables, grains, oils, rice, flour and medicine. In this context, instant retail, characterized by "local stores plus instant delivery", has gained increasing popularity among consumers. The 2022 China Sharing Economy Development Report shows that the proportion of take-out in the national catering market rapidly increased from 12.8% in 2019 to 21.4% in 2021. This instant delivery model has gradually been accepted by the public, extending beyond food delivery to encompass various industries and categories, moving towards the "Everything Now" application scenario. The Research White Paper on Instant Retail Open Platform Models released by the China Chain Store & Franchise Association (CCFA) shows that the compound annual growth rate of the instant retail market scale reached 81% between 2016 and 2021. According to the results of the instant retail consumption habit survey questionnaire released by the Meituan Research Institute in August 2022, nearly 72% of respondents increased their use of instant retail shopping in the past year. In terms of consumption categories, fresh fruits and vegetables, snacks, alcoholic and non-alcoholic beverages, meat, eggs, poultry, dairy, grains, oils, and groceries are the main choices for residents' instant consumption, characterized by high immediacy or low portability. For example, fresh fruits and vegetables demand prompt delivery to maintain quality and freshness. Moreover, from the perspective of category development trends, consumption categories are gradually covering consumption categories, and the demand for instant consumption of classic e-commerce categories such as digital appliances, furniture and kitchenware, books and audio-visual products, and pet supplies is also constantly increasing.

In the post-pandemic era, the demand for "speed" has gradually become an ingrained habit among residents. According to COVID-19 and E-commerce: A Global Review, a report released by UN Trade and Development (UNCTAD), during the pandemic, global e-commerce achieved rapid growth, with its share of global retail trade increasing from 14% in 2019 to about 17% in 2020, with a more noticeable shift in consumption patterns among residents in some emerging economies. Moreover, this growth trend appears long-term and stable, with over 50% of respondents expecting to continue shopping online more frequently after the pandemic. Since the beginning of 2024, with the rapid and stable transition of pandemic prevention and control, supported by various government initiatives to expand domestic demand and promote consumption, there has been a notable recovery in household consumption. Meanwhile, instant retail consumption continued to maintain a steady upward trend, promoting consumption expansion. Meituan data shows that during this year's Spring Festival holiday, the sales volume of festive products on the Meituan Instashopping platform increased by 155% year on year, and the order volume of "Cloud Gifting" (orders placed from different locations) during the New Year's shopping festival increased by more than 50% year on year, while orders for food delivery related to tourism increased by 106% year on year. Additionally, instant retail has enriched local supply in vast county areas, injecting new momentum into the development of the county-level real economy. During the Spring Festival holiday, the order volume of instant retail in county areas increased by 36% compared to the same period last year. Specifically, instant retail orders from county convenience stores increased by 28% year on year, department stores by 29% year on year, and coffee shops by 124% year on year.

"Time Saving" as an Ongoing Pathway to Expand Residents' Consumption Capacity

Time is the most valuable resource for everyone. According to consumer behavior theory in economics, residents maximize utility within the constraints of their income budget line. However, in reality, time is also an important constraint on utility maximization. With continuous economic development and rising income levels, people increasingly pursue spiritual enjoyment rather than mere material satisfaction, leading to a growing demand for leisure. Keynes predicted in the 1930s that a century later, human labor productivity would significantly increase, necessary working time would greatly decrease, and leisure time would increase substantially. By then, how to meaningfully spend a large amount of leisure time would become an important issue. From the US experience, between 1900 and 2005, the average working hours for Americans aged 14 and above decreased from 27.7 hours per week to 23 hours per week, a reduction of 17.0%. Average leisure time increased from 5.3 hours per week to 5.8 hours per week, an increase of 10.0%. However, since average working hours are based on the total social working hours by the total population, and the significant increase in female labor force participation in the US since the 20th century has led to a corresponding rise in total social working hours, actual average working hours may be lower.

Compared with developed economies in Europe and the US, there is still significant room for improvement in residents' leisure time in China, making time-saving consumption even more necessary to broaden the time budget curve. The National Bureau of Statistics conducted two nationwide surveys on residents' time utilization in 2008 and 2018. According to the 2018 survey data, excluding sleep and rest, the time spent by Chinese residents on paid labor accounted for 18.3%, unpaid labor accounted for 11.3%, personal discretionary time for 16.4%, and time spent on other activities such as learning and training, transportation, dining, and personal hygiene accounted for 15.4%.

When comparing working hours, Chinese residents tend to work longer compared to their counterparts in other countries.