In an article published in the Economic Daily, Professor Zhong Ninghua, Associate Dean of Tongji-SEM, argues that it requires the joint efforts of the industry, enterprises and consumers to strengthen policy guidance, optimize the market environment, enhance the quality of supply, strengthen market regulation, promote industrial innovation, facilitate enterprise upgrading, and cultivate a healthy consumption ecology to promote the sustainable and healthy development of service consumption. The following is the original article.

Recently, China’s residents have a strong demand for service consumption, and the service consumption market continues to grow. Data show that in the first quarter of this year, the retail sales of services increased by 5.0% year-on-year, higher than the growth rate of retail sales of commodities in the same period by 0.4 percentage points. 2024, the national per capita consumption expenditure on services was 13,016 yuan, an increase of 7.4% compared with that of the previous year, which was faster than the growth rate of per capita consumption expenditure by 2.1 percentage points; it accounted for 46.1% of the proportion of consumption expenditure of the residents, which was up by 0.9 percentage points compared with that of 2023. The proportion of consumer spending was 46.1%, up 0.9 percentage points from 2023.

Service consumption is booming, gradually becoming a new engine of economic growth. In terms of consumption hotspots, tourism, catering and other areas are developing rapidly. Taking Beijing as an example, the local consumption promotion activities for the 2024 consumption season centered on 14 special themes such as catering, holiday and fashion consumption, driving more than 900 first stores to the ground throughout the year. The rich cultural and entertainment market supply and strong and effective policies to promote consumption in many places have stimulated residents’ enthusiasm for consumption.

China has successively introduced a series of policies and measures to promote the quality and expansion of service consumption. For example, in 2020, the National Development and Reform Commission and other departments jointly issued the Implementing Opinions on Promoting Consumption Expansion and Improving Quality and Accelerating the Formation of a Strong Domestic Market, proposing to improve the quality and upgrade the consumption of culture, tourism and leisure by enriching the characteristics of culture and tourism products, and improving the environment for inbound tourism and shopping.2024, the State Council issued the Opinions on Promoting the High-Quality Development of Consumption of Services, which focuses on the six major areas and puts forward 20 key tasks, clarifying the direction and path for the development of service consumption. These initiatives focus on improving service quality, enriching consumption scenarios, optimizing the consumption environment, and enhancing the internal dynamics of service consumption by stimulating innovation.

Although China’s service consumption has made great progress, it still faces some challenges. First, the quality of supply needs to be improved, the degree of standardization is not high in the field of domestic service, pension, etc., the quality of service is uneven, and the child care service has similar problems, which restricts the development of “an old and a small” service consumption market. Second, the market order has yet to be standardized, tourism, fitness, beauty and other industries, there are false advertising, price fraud and other issues, affecting consumer confidence. Third, consumer attitudes still need to change, some consumers are more inclined to traditional physical consumption, culture, sports and tourism and other areas of potential not fully released.

In the future, to promote the sustainable and healthy development of service consumption, the industry, enterprises and consumers need to make concerted efforts.

Strengthen industrial policy guidance, optimize the market environment, and improve the quality of service supply. Increase market supervision to combat false advertising, price fraud and other behaviors. Improve service quality standards for key areas such as housekeeping, elderly care and childcare. Promote industrial innovation and development, encourage enterprises to increase investment in research and development, and support the development of new business forms such as intelligent housekeeping, intelligent elderly care, and professional early childhood education. Strengthen infrastructure construction, and increase investment in community facilities for the elderly and places for early childhood activities.

Promote enterprise innovation and upgrading, and promote the development of the service industry towards specialization and branding. Service enterprises should strengthen brand building, improve employee training systems, and innovate service models, such as domestic service enterprises developing online functions, senior care service enterprises carrying out telemedicine, and sports and tourism enterprises launching personalized customized services. Enhance consumer awareness, strengthen the protection of rights and interests, and cultivate a healthy consumption ecology. Strengthen the popularization of service consumption knowledge through multiple channels to guide the transformation of consumption concepts.