Rural internet consumption growth prospects are viewed favorably

On April 16, the "2015 Consumer Market Development Report" released by the Research Institute of the Ministry of Commerce pointed out that this year China's consumption-driven development model will be basically established, and consumption growth rate, structure, hotspots, driving forces, etc. will undergo corresponding changes. The consumption rate will exceed 50% for the first time, ranking first among the three drivers. Moreover, the transformation of the driving forces of consumption growth has basically been completed, shifting from commodity consumption to service consumption, from traditional consumption to new-type consumption, and from urban consumption to urbanization-driven consumption. In such a trend of consumption-led development and growth, the author is very optimistic about the rural growth prospects of internet consumption.

In economic concepts, the consumption rate refers to the ratio of a country's or region's final consumption in one year, the total amount used for residents' personal and social consumption, to the GDP of that year. It reflects the proportion of a country's products used for final consumption, and is also an important indicator for measuring the proportion of consumption in the national economy. So what significance does a consumption rate exceeding 50% have for China's development? It can be said that this means consumption has begun to rank first among the "three drivers" of economic development (consumption, investment, exports), and its position as the primary driving force for the national economy is expected to be secured. As Zhao Ping, a researcher at the Research Institute of the Ministry of Commerce, analyzed: "Overall, in 2015, the momentum of consumption development is clearly better than that of investment. This determines that not only in the 7% increment, but also in both the economic stock and increment, consumption occupies first place. Over the past five years, the consumption contribution rate has gradually increased, that is, the proportion of consumption increment in GDP increment will also rank first among the three drivers. This year, the consumption-driven development model will be basically established."

In the transformation of the driving forces of consumption growth, the shift from urban consumption to urbanization-driven consumption will be the most prominent growth driver, and among this, rural internet consumption has very broad development prospects. As the Engel coefficient, which represents food consumption, continues to decline, both urban and rural consumption in China have now entered a relatively affluent stage of development, and against the background of downward economic pressure being transmitted to consumption, the growth rate of commodity consumption represented by total retail sales of consumer goods may decline further. In contrast, new-type consumption represented by internet consumption is growing strongly, and the growth rate of service consumption is far higher than that of commodity consumption. Among this, the growth rate of service consumption such as housing, medical care, and cultural, educational and entertainment services is far faster than that of food and clothing, and its proportion of total consumption has risen sharply. The growth of transportation and communications is even more obvious, and service consumption has become the main driving force for consumption growth. Consumption driven by urbanization development will have a sustained and powerful pulling effect on both traditional and new-type consumption, and on both commodity and service consumption. Among this, the greatest consumption potential should be that of rural young people through the internet.

The transformation of the driving force of consumption from urban consumption to urbanization-driven development can be said to have a strong foundation of momentum. Data from the National Bureau of Statistics show that in 2014 China's per capita net income of farmers reached 9892 yuan, and the income growth rate exceeded that of GDP and urban residents' income for the fifth consecutive year. The urban-rural resident income ratio fell from 3.33:1 in 2009 to 2.92:1. In 2015, the growth rate of disposable income of rural residents in China is still expected to be 1 to 2 percentage points higher than that of urban residents, and the growth rate of urban consumption will still be lower than that of rural areas. Against the background of the countdown to the goal of building a moderately prosperous society in all respects, the improvement of the level and quality of rural urbanization in the coming years is worth anticipating. There is of course no need to say that consumption driven by urbanization development will grow strongly.

The internet has broken spatial limitations. The integration of "Internet Plus" with the service industry enables people to buy all kinds of goods without leaving home, and it will certainly, as a new consumption method, increasingly deeply influence and change people's lives. According to the latest report from the China Internet Network Information Center, as of December 2014, China had 649 million internet users, with an internet penetration rate of 47.9%; among them, rural internet users accounted for 27.5%, totaling 178 million. The differences between urban and rural internet users, especially young internet users, can be said to be far smaller than the current urban-rural development gap. At present, the values, lifestyles, and consumption concepts of the rural "post-80s" and "post-90s" generations have already changed greatly compared with those of their parents' generation. While most of them choose non-agricultural employment, they are also willing to enjoy a high-quality life through consumption, especially convenient internet consumption, and this phenomenon will certainly continue.

Of course, although the scale and penetration rate of internet users in rural areas continue to grow, the difference in internet penetration rate between urban and rural areas still tends to expand. As of December 2014, the difference in urban-rural penetration rate reached 34 percentage points. Part of the reason may be that the urbanization process has to some extent obscured the achievements of advancing rural internet penetration, but the fundamental reason is the unbalanced regional economic development. Methods to properly resolve the urban-rural digital divide still require further exploration and innovation. It is suggested that relevant departments place rural informatization in a more important position and develop rural development and consumption potential in a more pioneering way.