China develops debut economy to expand high-quality supply

BEIJING, Sept. 29, 2024 /PRNewswire/ -- A report from People's Daily: A toy brand recently opened its first store in central China at the Grandjoy mall in Changsha, capital city of Hunan province. Over 3,000 debut products were launched, featuring more than 100 popular IPs, and many were highly sought after by young consumers and sold out on the first day. The store reported a sales revenue of 170,000 yuan ($23,942) on its opening day.

The store manager said that there will be a continuous introduction of new products and fresh experiences for consumers in the future.

This buzz and excitement that comes with the launch of something new is exactly what defines debut economy. In recent years, the Chinese debut economy has seen steady development. In 2023, hundreds or even thousands of first stores were opened in cities such as Beijing, Shanghai, Guangzhou, Chengdu and Xi'an.

Debut economy covers everything from the first reveal of a product, the opening of flagship stores, and the launch of new services, to the creation of new business models and technologies. It encompasses the entire process of a company's development, starting from launching and exhibiting debut products and services to setting up the first physical stores, R&D centers, and corporate headquarters.

"Debut economy is inherently innovative," said Hong Yong, associate researcher with the e-commerce research department, Chinese Academy of International Trade and Economic Cooperation.

"Debut" is what makes debut economy so important, Hong explained, adding that the new products, technologies, services, business forms, and business models introduced to the market are fashionable, reliable and trendy.

At major exhibitions, launch events are a big attraction to visitors. For instance, a total of 442 new products, technologies, and services were launched at the sixth China International Import Expo (CIIE) held last year.

Many regions in China are developing debut economy and have introduced a series of measures. By the end of last year, more than 40 policies and measures encouraging businesses to set up first regional stores had been issued across the country.

According to statistics, in the first half of this year, 485 first stores were opened in Beijing, including the first outlets of various brands, flagship stores and innovative concept stores.

Last year, Shanghai saw the opening of 1,215 first stores, a year-on-year increase of 13.2 percent. From May 2018 to December 2023, over 4,500 international and Chinese brands held launch events in Shanghai, introducing 5,840 first stores, including more than 80 Asian and global first stores.

"I finally got the shoes I've been longing for. I'm really excited," said Wang Yue, a consumer from Beijing.

Before the Qixi Festival, or Chinese Valentine's Day, this year, Wang spotted a pair of limited edition canvas shoes from a popular Chinese fashion brand on China's trendy e-commerce App Dewu and made a reservation for the shoes' launch. The product was sold out in just two minutes after it was released.

"In today's consumer market, launch events have become an important focal point in consumers' decision-making process," said an executive with Dewu App. He explained that personalized, diversified, and experiential demands are becoming increasingly prevalent in the evolving consumer market. The desire for novelty has become a typical mindset, especially among young consumers, the executive added.

Developing debut economy is in line with the upgrading of the Chinese consumer market and holds immense prospects. From a macro perspective, the huge Chinese consumer market boasts enormous potential, which features lower costs, accelerate iteration, and innovate scenarios, thereby allowing new products to be massively manufactured, and providing fertile ground for the development of debut economy.

From an industry perspective, debut economy promotes industrial upgrading and supply-side innovation. For example, a clothes wholesale market in Guangzhou, capital city of south China's Guangdong province, has set up a specialized sector and introduced over 100 top designer brands to transform business models and enhance its market influence. More and more traditional wholesale markets in China are seeking to expand their online and offline presence by introducing new brands and products.

The rapid development of debut economy has provided greater market opportunities for global brands.

For instance, the Universal Beijing Resort rapidly emerged as a popular tourist attraction since the opening of its first phase. Last year, the resort received approximately 9.88 million visitors, attracting around 16 million people to the surrounding commercial areas.

This year, a number of Chinese and international first-tier brands have launched their first stores and debuted their products in Shanghai's Nanjing West Road commercial zone. Birkenstock held its 250th anniversary celebration in Shanghai's ZhangYuan, or Zhang's Garden, introducing its 1774 high-end series to China for the first time. At the Shanghai International Cosmetic Festival, seven major beauty conglomerates including L'Oréal, Estée Lauder, and Sisley launched new beauty products.

Zou Yunhan, deputy head of the macroeconomic research office of the Department of Economic Forecasting, China's State Information Center, said that debut economy can lead to the accumulation of advantageous resources on the supply side, bringing together advantages in production, R&D, and sales.

Developing debut economy not only helps upgrade the consumption side but also drives the transformation and upgrading of the production side, Zou added.

SOURCE People's Daily