Under the current economic development new normal, China’s retailing is also facing the new normal of declining consumption growth rate and sales growth rate, continuous adjustment of the business format structure, increasingly saturated traditional consumption demand and declining physical store retails. In order to break the bottleneck of the retailing and accelerate the retailing transformation and upgrade, the related ministries of the central government have issued a series of plans and policies related to retailing to promote formation of the retailing sustainable development planning system.

 

Policies increased to promote transformation and upgrade of physical store retailing

 

At the special time of the 11.11 online shopping carnival, a guideline document for the future five to 10 years of the retail physical stores was issued quietly. On November 11, the State Council promulgated the Opinions on Promoting the Physical Store Retailing Innovation and Transformation (the Opinions). The Opinions points out that the physical store retailing is an important base of commodity circulation, an important carrier guiding production and enlarging consumption, and an important channel of prospering the market and guaranteeing employment. Although the physical store retailing of China has continuously enlarged the scale, it faces the problems of extensive development mode, insufficient effective supply and low operation efficiency and so on. The Opinions puts forward that efforts should be made to adjust the commercial structure, support enterprises in the areas with sufficient business facilities to transfer from the coastal areas to the central and western areas of China relying on the capital, brand and technological advantages, and extend from the first and second tier cities to the third and fourth tier cities to form regional competitive advantages, foster new growth points; and adjust the business format structure, guide shopping centers, department stores and furnishing markets in similar business format, with overlapped functions and relatively high market saturation to timely adjust the operating structure; adjust the commodity structure to guide enterprises to change the sameness in designs and product lineups of all stores and continuously adjust and optimize the commodity types and meet residents’ consumption structure upgrade need; innovate in the development mode, encourage enterprises to innovate in the operating mechanism, organizational structure, and service experiences, urge physical stores to make up the short slabs and increase advantages to improve the core competitiveness; promote the transboundary integration, online and offline integration, multi-field coordination and integration of domestic and international trade to form a new structure of retailing through integration and coordination.

 

Supervision enhanced for e-commerce

 

The most striking event in the retailing sector in 2016 is nothing more than the news that the cross-border e-commerce new policy is suspended temporarily. Since April this year, the cross-border e-commerce retails import embraced the new polices centering on the tariff adjustment, positive list and customs clearance. At the tax level, retail goods purchased online will no longer be treated as personal postal articles but as imported goods, which carry tariffs, import VAT and consumption tax. At the customs clearance level, bonded goods purchased online should be verified the goods customs declaration documents when entering the bonded area in an “one-stop” way by referring to the List of Cross-Border E-commerce Retail Imported Articles and the cosmetics, infant formula powder and health food and other goods are requested to prepare for the first time import permit, registration or filing on record. After more than one month of the promulgation of the new policy, the State Council granted one year of transitional period starting from May 11 for the supervision of the positive list and customs clearance in the pilot areas and supervision will be implemented continuously in accordance with the pilot mode in the year. In November, the spokesperson of the Ministry of Commerce pointed out that in order to properly promote the transition of the cross-border e-commerce retail import supervision, the abovementioned transitional period will be prolonged till the end of 2017.

 

Moreover, a document for the mid- and long-term e-commerce development will be released recently. In December, Shen Danyang, spokesperson of the Ministry of Commerce, introduced at a routine news conference that the top priority of this year was to lead the formulation of the 13^th Five-Year Plan for E-commerce. This task lasted for more than seven months and has been reviewed at the meeting of the Ministry of Commerce and will be jointly printed and distributed by the Ministry of Commerce, Office of the Central Leading Group for Cyberspace Affairs and the National Development and Reform Commission (NDRC). The Plan will continue the thinking of the previous two five-year plans and put emphasis on deepening study of the new status and new phenomena and set forth new ideas on the basis of the two plans. It attaches importance to connecting new trend and new requirements of the e-commerce development based on the new phenomena, mastering the rules and clarifying the attitude to accelerate development while implementing effective management.

 

The local governments also released some e-commerce related regulations. At the end of March, Beijing Food and Drug Administration promulgated the Measures of Beijing on Governance of Online Food Operation Supervision (interim). According to the related leader of Beijing FDA, after the official implementation of the Measures, the food operators engaging in the online meal ordering service providers should publicize its catering service food safety quantitative grading label at a the full position of the homepage of the website or the homepage of operating activities. Individuals without the food operation permit are not allowed to sell self-made food online.

 

Domestic trade circulation top-level design released

 

The domestic trade circulation development plan for the future five years was promulgated. In November, the Ministry of Commerce, the NDRC, Ministry of Industry and Information Technology, the Ministry of Finance, the Ministry of Land and Resources, Ministry of Agriculture, the People’s Bank of China, the State Administration of Taxation, the State Administration for Industry and Commerce, the General Administration of Quality Supervision, Inspection and Quarantine, totaling 10 units, jointly released the 13^th Five-Year Development Plan for Domestic Trade Circulation. The Plan puts forward nine major tasks in the 13^th Five-Year Plan period, namely advancing the commercial entity innovation and transformation, increasing the circulation supply level, enhancing the consumption structure upgrade, lifting the circulation information level, strengthening the circulation standardization construction and circulation intensive development, coordinating regional urban-rural coordinated development, promoting foreign opening up and cooperation and creating a law-based business environment. The specific goals of the Plan are to, by 2020, grow the total retail sales of consumer goods to nearly RMB48 trillion, annual growth rate at about 10%; the added value of wholesales and retailing, hotel and catering to RMB11.2 trillion, annual growth rate at about 7.5%, e-commerce transaction amount to RMB43.8 trillion, annual growth rate at about 15%, online retails amount to RMB9.6 trillion, annual growth rate at about 20%. Sun Jiwen, spokesperson of the Ministry of Commerce, said currently the domestic trade circulation is still facing problems such as the low circulation efficiency, high costs, slow real commerce transformation, lack of standardization of e-commerce, and insufficient integration of online and offline development. The new Plan sets forth the nine important tasks to solve such problems.

 

Source: Translated from Invest Guangzhou, December 21, 2016