China Issues Guidance to Boost County-Level Consumption and Curb Platform Price Subsidies

The Ministry of Commerce and eight other departments jointly issued the Opinions on Further Invigorating Lower-Tier Markets and Activating County-Level Consumption, proposing to promote "equal quality and shared access" for identical goods in urban and rural areas.

For a long period, county-level commercial outlets were few, the distribution system was incomplete, residents' consumption capacity was relatively limited, and the consumer market foundation was weak. Some brands and business operators lacked the willingness to expand into lower-tier markets, the supply of goods in county markets was not high-level, and low-quality, low-priced and counterfeit goods had room to survive. Some operators used consumption location and consumption capacity as a basis for differentiated supply, offering goods of different quality at the same price, giving rise to the so-called "AB goods."

Demand in county-level markets has changed. As new urbanization advances, the population is gathering in county towns at a faster pace, and a large number of rural residents moving to cities have settled in county towns, bringing multi-level consumer demand for housing, renovation, education and medical care. Rural residents' incomes have continued to grow, their consumption capacity has steadily improved, and demand for quality goods and services has become stronger. Returning entrepreneurs have brought new consumption patterns and concepts back to county areas. At the same time, the county commercial system has continued to improve, logistics and distribution networks have kept extending, and conditions for brands to expand downward have gradually matured. County-level consumption space has expanded, consumer demand has strengthened, and commercial carrying capacity has improved.