Rush reveals consumption potential

When Xiaomeng returned to her hometown in a county in Henan province for the Spring Festival this year, she was bewildered. The postgraduate student from Beijing had planned a relaxed get-together with a few friends. But the huge Spring Festival rush was overwhelming. "Restaurants had to be booked three days in advance," she complained. "The only two milk tea shops had sold out and shut early, and food delivery from most supermarkets and restaurants took more than three hours." It was a far cry from the "30-minute delivery" Xiaomeng had grown used to in Beijing.

The Spring Festival hometown return rush is not just a migration of people, but a concentrated release of consumption demand. When millions come back home, there is an enormous surge in high-frequency, small-ticket consumption such as dining out, instant retail and in-store services. This consumption boom not only reflects the vitality of county-level markets, but also shows their development gap with first — and second-tier cities. This gap is an indicator of the enormous potential of these lower-tier markets.

Notably, this increase in consumption at the county level is not visible only during holidays such as the Spring Festival. Counties have registered steady and regular growth and emerged as a new blue ocean in China's consumer market.

Rising incomes and upgraded consumer preferences have unleashed vitality in county-level consumption. Data from the National Bureau of Statistics show that the per capita disposable income of rural residents more than doubled from 11,422 yuan in 2015 to 23,119 yuan in 2024.

During this period, the per capita consumption expenditure of rural residents rose from 9,223 yuan in 2015 to 19,280 yuan in 2024, with an average annual growth rate of 8.5 percent, 3 percentage points higher than that of urban residents in the same period. The share of service consumption expenditure increased from 36.2 percent to 40.3 percent as a growing number of county residents pursued high-quality and diversified consumption experiences.

The inflow of private investment has further boosted the supply. In recent years, well-known brands such as Starbucks and Haidilao, as well as others including China Resources Mixc Lifestyle and Aegean Group, have expanded their presence in county-level markets. Chain catering, branded supermarkets and convenient services are moving to third — and fourth-tier cities and counties.

With solid depth and breadth and strong economic resilience, county-level markets have become increasingly attractive. The expansion of these brands into lower-tier markets has not only brought standardized products and services, but also fostered new consumption habits among county residents that are increasingly in step with those in big cities.

Policy support has further strengthened this trend. In areas with the necessary conditions, commercial outlets at the county, township and village levels have basically achieved full coverage. Express delivery coverage has reached 95 percent in eligible townships.

Despite the enormous potential of the county-level consumer markets, they still lag behind first — and second-tier cities in both structure and experience. For example, the commercial formats at the county level are still dominated by traditional catering and supermarkets, and most businesses close after 9 pm. Experiential consumption scenarios such as cultural, sports and leisure entertainment are relatively scarce. The same-city distribution network lags behind and slow delivery efficiency affects the consumption experience. Meanwhile, the low level of chain operations and uneven quality standards remain persistent problems.

To unlock the full potential of county-level consumption, efforts are needed on three fronts. First, upgrade and improve the quality of supply and promote chain operations and standardization.

E-commerce platforms and other enterprises should be encouraged to transform traditional outlets at the county level through digital tools and supply chain integration. At the same time, innovation is needed to create consumption scenarios and enrich consumption experiences.

Counties should encourage qualified catering, cultural and entertainment enterprises to extend business hours, improve supporting facilities for nighttime consumption and develop new formats, models and scenarios that expand service consumption.

Second, consumption facilities also need to be improved. Counties should continue upgrading commercial facilities, with a focus on building township-level commercial and trade centers and village-level convenience stores. Improvements in supporting facilities such as parking lots and public toilets are also important to enhance the convenience and comfort of consumption.

Logistics is even more crucial. A three-level distribution network covering counties, townships and villages should be developed to solve the "last mile" delivery problem. Enterprises should be encouraged to recruit county residents and returning young people for delivery services.

Third, the consumption environment needs to be optimized. Management should be made more inclusive and approval processes for nighttime business operations should be simplified.

There should be stronger market supervision to regulate pricing, ensure food safety and safeguard the rights of consumers.

At the same time, financial capital should be channeled into the county-level consumption sector to provide financing support for the expansion of chain enterprises and the construction of convenient facilities.

The author is a research fellow at the Institute of Distribution and Consumption in the Chinese Academy of International Trade and Economic Cooperation of the Ministry of Commerce.

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