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Press Release for Media Briefing of the Shanghai Municipal Government on April 23, 2020

April 24, 2020

The Information Office of Shanghai Municipality held a media briefing onApril 23, during which Hua Yuan, director of the Shanghai Commission of Commerce, introduced the city’s newly issued “Measures to Boost Consumer Confidence and Unleash Consumer Demand” (hereinafter referred to as “Measures”), and the upcoming Double Five Shopping Festival. Liu Min, deputy director of the Shanghai Commission of Commerce, QiuWenjin, deputy director of the Shanghai Development and Reform Commission, Zhang Ying, deputy director of the ShanghaiCommission of Economy and Informatization, and Cheng Meihong, deputy director of the Shanghai Administration of Culture and Tourism, attended the press conference.

1. Main considerations on the introduction of “Measures” and the Double Five Shopping Festival

Consumption is the No.1 driving force for economic growth, and Shanghai has always attached great importance to stabilizing and expanding residents’consumption.In April 2018, the city promulgated the Three-Year Action Plan (2018-2020) to build “Shanghai Shopping” brand and accelerate the construction of an international consumptioncity. Through joint efforts of all parties, the campaign has achieved remarkable results. As one of the first domestic cities with retail sales of a trillion yuan, Shanghai’s total retail sales of consumer goods reached 1.35 trillion yuan in 2019, ranking first in the country for three consecutive years. Consumption has increasingly become a stabilizer for the economy. The online economy and other new formats and models are booming. In 2019, e-commerce transactions exceeded 3.3 trillion yuan, marking an increase of 14.7%, accounting for about one-tenth of the country’s total. The city has a group of outstanding e-commerce enterprises which have strong capabilities to allocate resources, strong effect to drive industry growth, and leading status in the industry. Major e-commerce livestreaming platforms are ranked first in the country in terms of the number of users. The city has increasingly improved the degree of internationalization, with the number of first stores and flagship stores ranked the first nationwide. The concentration of global retailers in the city was ranked second worldwide, as more than 90% of internationally renowned high-end brands had presence in the city. Imports of clothing, cosmetics and automobiles through Shanghai ports accounted for 69.9%, 47.3% and 36.3% of the nation’s total, respectively, making Shanghai the first choice for international brands to enter the China market. Many high-end international brands have set up their China and Asia-Pacific headquarters in Shanghai.

This sudden coronavirus outbreak has caused a great impact on the consumer market. In order to fully support the enterprises to fight against the epidemic, Shanghai has issued “Policy Measures to Support the Steady and Healthy Development of Service Enterprises” (referred to as “Shanghai 28 Articles”) and other policy measures to help various enterprises including commerce and trade entities to reduce operating costs, provide them with financing facilities, and coordinate solutions to address demand for epidemic prevention supplies. The majority of merchants have also taken active actions to adopt innovative business models.Especially since March, they have successively launched a series of marketing and promotional activities such as Cloud Fashion Week, “Cloud Livestreaming, Cloud Shopping and Cloud Pop Store, with business seeing an accelerated recovery.

In order to implement the important arrangements and requirements of the Communist Party of China Central Committee and the State Council on expanding domestic demand, unleashing consumption potential, and boosting consumption power, to deal with the impact of the epidemic more actively and effectively, to strive to promote “Four Brands” in Shanghai, and to speed up the construction of an international consumption city, Shanghai has decided to introduce “Measures” and hold the Double FiveShopping Festival, mainly based on three considerations. First, the city hopes to leverage strong policy measures to replenish and unleash consumption, and to better meet people’s continuously recovering and rising consumption demand. Secondly, the city hopes to create iconic activities for an international consumption city by holding the Double Five Shopping Festival, in a bid to enhance the influence and identity of Shanghai’s “Four Brands”, and to create a brand-new consumption festival for the majority of businesses and consumers. Thirdly, the city plans to take advantage of online economy, new consumption formats and other new models that are emerging during the epidemic. By unveiling policies and holding the Double Five Shopping Festival, the city will consolidate and promote the new and upgraded consumption patterns, as well as new consumption concepts and habits that have been born during the epidemic. Shanghai will help businesses create more new consumption venues and channels, to provide consumers with more diverse and convenient options.

2. The main contents of Several Measures

Based on the current and long-term perspectives, “Measures” insisted on equal emphasis on goods consumption and service consumption, as well as emerging consumption and traditional consumption. Twelve policy measures have been proposed, covering four aspects, namely “one big festival”, “five major consumption areas”, “four economies” and “one environment”. These measures will focus on boosting consumer confidence, greatly unleashing consumption potential, and promoting quality and expansion of consumption.

The “one big festival” is the Double Five Shopping Festival, which will be held during the special period when efforts are made to combat the epidemic and stabilize the economy. The aim is to leverage both policies and activities to enhance collaboration between the city government and district governments, as well as between the government and enterprises, to launch a citywide campaign in a bid to achieve full coverage of local platforms, merchants and terminalproducts. The festival is set to cover consumers across the city, to significantly boost the enthusiasm of market players and platform companies, to maximize the leverage and multiplier effect of policies and funds, to make the bestefforts to replenish and unleash consumption, and to strive to create the chicest and most fashionable shopping feast and consumption carnival, making it an iconic event for the “Shanghai Shopping” brand.

“Five major consumption areas” refer to emerging consumption, leisure consumption, automobile consumption, information consumption and home improvement consumption. They are not only the main areas of consumption, but also showing a key trend in consumption upgrade.

In terms of emerging consumption, Shanghai is the “source of origin” and “arena” for new retail. Bucking the trend, the value of online shopping of commodities in the city increased by 19.1% in the first quarter of this year. By promoting the rapid development of emerging consumption, the city will fully rely on its advantages in markets, scenes and resources, leverage digitalization to empower commerce, and accelerate innovation in technologies, models and formats. The city will step up efforts to develop “online economy”, “home delivery economy” and “contactless economy”. To this end, “Measures” proposed that the city would give a great play to large platforms and large flows, and initiate the “Shanghai Cloud Shopping” brand, by creating a series of activities such as cloud shopping, cloud consumption, cloud exhibitions, cloud shows, and cloud experience. The city will carry out digital marketing trials in key commercial areas, and encourage e-commerce companies to provide special support for key merchants and brands with regard to business operation, traffic flows and data. The city will promote community-based self-pick up points and smart containers for express delivery, and encourage online platforms to carry out “safe consumption plans”.

Leisure consumption mainly includes cultural tourism consumption and catering consumption, which are also two areas seriously affected by the epidemic. In terms of cultural tourism consumption, depending on the epidemic prevention and control situations, the city will unveil a cultural tourism market revitalization plan and a batch of high-quality cultural tourism products. The city will introduce a “Shanghai Tourism” passport guiding citizens to “see Shanghai, visit scenic spots, stay in hotels, watch big shows, and buy specialty products.” Catering consumption is closely related to the daily life of citizens. In order to revitalize catering consumption, “Measures” propose to organize a series of activities, such as promoting “famous restaurants, famous chefs, famous dishes, famous dim sum,” and encouraging online catering platforms to increase promotional campaigns. The city will also strive to promote individual serving arrangement, and advocate a new style of dining.

Automobile consumption is a widelywatched area, as it involves thousands of households. In order to support consumers to replace old vehicles and purchase new energy vehicles, “Measures” propose a series of powerful policy measures. For example, consumers will be offered subsidies if they phase out their old cars with emission standards National IV and below by the year’s end, and buy new cars that meet the requirements of National VI emission standards. A certain amount of subsidies will be given to cover the charging costs during the use of the vehicle. A total of 40,000 new non-commercial car plates for the central urban area will be added during the year.

Information consumption represents a key trend of consumption upgrade. Especially with the advent of the 5G era, it is becoming a new consumption hot spot. In order to promote information consumption, “Measures” propose three measures. First, the city will facilitate online and offline interaction, and hold an information consumption festival. Secondly, the city will encourage the use of smart terminals, wearable devices, and smart home products, while developing online audio-visual, digital audio, Internet games and other information services. Thirdly, the city will speed up the promotion of 5G applications, build a number of experience centers, and carry out promotions on terminal products and data package discounts.

In terms of home improvement consumption, the focus is to encourage home improvement companies to carry out promotional activities. Financial institutions will be supported to launch diversified credit products for home improvement consumption.

The “four economies” are the “debut economy”, “night economy”, “brand economy” and “tax-free economy”. These are the highlights of the “Shanghai Shopping” brand and the development of an international consumption city. They are also the key drivers to promote high-quality growth of the consumer market and to better meet diverse consumer demand.

In terms of the “debut economy”, 986 new stores of various types debuted in Shanghai last year, making the city to lead across the country. The city has become a key stage for brands to debut their new products or stores. In order to speed up the creation of a place for the debut of global new products, “Measures”stipulate that financial support will be given to new product debut activities and first/flagship store openings, and these products and stores will be included in the Shanghai Key Trademark Protection List. The city will improve the speed of customs clearance for these new products, promote the acceptance system of inspection results for imported products, and provide convenient and efficient services in patents, trademark registration and pledge registration for the brands that debut their new products in Shanghai.

The night economy is an important part of the international consumption city. Last year, the city pioneered the system of night district chiefs and nightlife CEOsin the country, and launched a number of platforms such as night life gathering areas and weekend pedestrian streets, laying a good foundation for the night economy.The “Measures” focus on cracking the policy bottleneck,and proposed measures such as orderly easing the restrictions on street stalls,  strengthening transportation facilities at night, adding temporary parking lots at night, and simplifying the approval of large-scale activities, in a bid to bring night consumption to a new level.

The brand economy is an important part of the “supply-side” reform of consumption. To this end, “Measures” propose to promote the project of the east extension of Nanjing RoadPedestrian Mall, and to accelerate the adjustment of the pedestrian street format, and enhance the brands. The city will also enhance the vitality of local brands by drafting tailor-made solutions and plans for each time-honored local brand. The city will give play to the role of “6 + 365” one-stop trading service platform for the China International Import Expo, and hold special promotional events such as country-specific commodity week and road show to attract more import brands to gather in Shanghai.

Regarding the tax-free economy, the sales of tax-refundable products by overseas travelers in Shanghai accounted for 60% of the country’s total, and the sales of airport duty-free shops in Shanghai were ranked third in the world and number one in China. To help overseas travelers and domestic outbound travelers to more easily purchase high-quality global products, the “Measures” proposeto support duty-free goods business operators to add duty-free shops in the city, set up certain areas of domestic goodsin duty-free shops, accelerate the promotion of tax refund shops in all key commercial areas, and expand the scope of the “buy-and-refund” pilot program.

The “one environment”is to create a strong consumption atmosphere. On the one hand, the city will give full play to the advantages of media convergence and create a good atmosphere to promote consumption.On the other hand, the city will promote integrity in consumption. It will publish the business integrity index of key commercial circles, promote the service commitment of allowing consumers to return the product in seven days without needing any reason, and create ahonest and trustworthy, service-focused, safe and convenient consumption environment.

3. General arrangements for the Double Five Shopping Festival

The Double Five Shopping Festival is a new large-scale consumption event launched by the city. Themed “Double Five Shopping Festival, a City in Discount Season”, the campaign comes with a specially-designed logo. "55 Shopping Festival" runs through the entire second quarter, spanning key festivals such as Labor Day, Children's Day and the Dragon Boat Festival. The city's major e-commerce platforms, commercial enterprises, major brands and end products will extensively participate in the event. We aim to “involve thousands of companies and tens of thousands of shops, mobilize all city dwellers, and entice consumers with daily campaigns and weekly highlights”. At present, more than 130 key campaigns and over 700 special activities are in the pipeline:

During the shopping festival, major consumer sectors will launch a variety of promotional activities.

Nearly 30 key campaigns will be launched in the emerging consumption realm. Alibaba will create a dedicated campaign dubbedDouble Five Juhuasuan Gathering in Shanghai, which offers discounts and distributing large-sum shopping coupons involving 1,000 local lifestyle brands and 420,000 Shanghai-based merchants on Taobao and Tmall. Pinduoduo will organize a Hi Purchase Festival, creating a “45% discount zone", and dispatch more than 100 livestreaming hosts to instruct physical shopping mall personnel to properly conduct online broadcasting. The event is expected to cover more than 1,000 well-known brands in Shanghai with the participation of more than 100,000 local merchants. Tencent will carry out the Blossom Xujiahui Cloud Live Broadcasting activity, whereas large-scale promotions are given in the form of online group-buying and offline discounts. JD’s June 18 campaign will focus on key categories such as general merchandise and electronics. Douyin(or TikTok known overseas) will host a special activity called “Dou — In Shanghai, Cloud Shopping”, during which it will recommend Shanghai’s beautiful city scene, gourmet and quality items via high-quality short video and livestreaming by online influencers. Bilibili will carry out marketing and promotional activities in tandem with the Wujiaochang business district, launch themed landing pages via the site, and issue coupons and other welfare to Bilibili users. Bailian will unveil a campaign themed "Refreshing Shopping in Purchase Season", while UnionPay will hold June 2 Festival and distribute shopping vouchers. Ximalaya FM will roll out an "Audio Nanjing Road" event, launching a reading pavilion, an audio library and an audio book corridor. Koubei will organize the “Month of Gourmet" event; Hema will launch Quality Life Festival; Dingdong Grocery will host Cloud-based Online Grocery Festival, issuing virtual red envelopes and coupons applicable on its platform. iKucun will launch an "Export Quality Goods + Cloud-based Purchase in Shanghai" activity, providing a special sales channel for selling quality export products to the public. In addition, the Communist Youth League Shanghai Municipal Party Committee will take the lead in organizing the "Internet Youth Life Festival", rolling out daily sought-after items and exploring 100 innovative brands in Shanghai, 100 distinctive catering services, as well as 100 novel-style consumer stores.

In terms of cultural and tourism consumption, the festival will uphold the key principles of "confidence, reassurance, satisfaction, warmth and joy". It is set to issue a number of high-quality routes, special activities and beneficiary measures, hold five major cultural and tourism festivals in due time, and launch eight major themed events such as gourmet tourism season and shopping tourism season. In addition, Ctrip will organize a special online livestreaming session featuring preferential hotel offers in the Yangtze River Delta region; Lvmama will hold a live charity online sales event featuring products from the 100 counties, with which Shanghai is in partner assistance programs and whose county chiefs are expected to appear in the shows promoting their respective local specialties.

In terms of catering consumption, with the theme of "Tasting Shanghai", a series of foodie activities will be launched, such as the Food Carnival, Shanghai Foodie Festival, Shanghai Snack Festival, Cooking Competition, Global Food Festival and Eating and Checking-in Campaign. These will include discounts and promotions, interactive experience, food selection, cooking skills display, publication of lists, checking-in in landmark venues, etc. Among them, Food Carnival and Shanghai Foodie Festival will fully leverage resources of leading platforms like MeituanDianping and Ele.me, mobilizing tens of thousands of restaurants, offering tens of thousands of preferential group-shopping offers, and providing discounts worth 100 million-odd yuan. Shanghai Snack Festival will summon thousands of time-honored local snack chains and breakfast eateries to offer discounts, allowing customers to be immersed in a wide selection of high-quality and affordable special snacks. The Global Food Festival will witness over thousands of international restaurants throughout the city showcasing gourmet, wine, bartending skills, unveil global gourmet lists, and hold livestreaming competitions.

In terms of automobile consumption, Automobile Carnivals such as joint brand exhibition, cloud-based new product release, new driving experience and travel by car initiatives will be held. The events cover more than 800 4S outlets in the city, and a number of new model release and preferential promotional activities will be launched. SAIC Group will hold special events featuring “Five Benefits” and “SAIC Night”, offering discounts to tens of new car models under the Roewe, SAIC MG, SAIC Maxus brands.

In terms of information consumption, the Shanghai branches of China Mobile, China Telecom and China Telecom, as well as Focus Media will organize four activities that spur consumption, four immersive experience activities and several special activities around Shanghai Information Consumption Festival, and vigorously promote new products and new business formats such as online +, 5G + and AI +.

In terms of home decoration consumption, Qijia Network will hold the "Home Décor in Time, May 1 Festival", benefiting consumers by dishing out preferential discounts and coupons; Red Star Macalline, Suning, Gome, Yongle and Haomeijia will also launch large-scale promotional activities.

In terms of new product consumption, a monthlong "Global New Product Debut Season" will be unveiled, with nearly 40 enterprises, more than 60 brands—such as LVMH, Kering Group, Coach, Lego, Adidas, Dyson, Huawei, Jala and Shanghai Jahwa—expected to host over 80 new product launches. The International Beauty Festival will see the launch of new products by the likes of L'Oreal and Estee Lauder. Riding the homegrown brands wave, Dewu app will team up with major platforms to launch new items for time-honored brands via livestreaming and host the inaugural new product design competition.

In terms of nightlife consumption, the first Night Festival will be held, focusing on six major themes such as night shopping, night food, night entertainment, night tour, night show and night reading. A number of evening cultural venues will be open, when shopping malls, restaurants, and bookstores are encouraged to host 10 special activities including Sleepless Shopping, Museum Wonderful Night, Bar Festival, Market Festival and Late Night Bookstore Week, in a bid to light up the "Night Shanghai".

In terms of brand consumption, Bright Food, DonghaoLansheng and Yuyuan Garden will carry out garden fetes featuring traditional goods, with the establishment of Gift Zone, Pop-up Zone and Joy Marketplace. Radio Shanghai will invite 55 hosts to tell stories about traditional Shanghai brands, allowing customers to hear, see and purchase these products. Four major purchase groups of the China International Import Expo, including Greenland Global Commodity and HongqiaoPinhui, will hold import goods festivals and country-specific commodity weeks. More than 500 offline stores and 40 online platforms will offer discounts to imported products across categories like fashion and lifestyle, diamonds, cosmetics, clothing and high-end luxury goods. Xiaohongshu and China Literature will hold preferential consumer goods campaigns themed "Show Our Glory accompanied by a Beautiful Life". Through livestreaming and online displays, the events will offer discount promotions of famous and high-quality products such as cosmetics, skin care, fashion and apparel, jewelry accessories, furniture and home décor, etc.

In addition, during the shopping festival, a string of beneficiary and attractive discounts will be offered across the following: major business districts in Shanghai, including Nanjing Road, Huaihai Road, Lujiazui, Xujiahui, Wujiaochang and Hongqiao; shopping malls Bailian, New World City, Joy City, Global Harbor and Wanda; supermarkets like Metro, Carrefour, Yonghui, Wal-Mart; catering chains like Golden Arch and Pizza Hut. Please stay tuned. At the same time, according to the requirements of epidemic prevention and control, the municipal government will guide and urge market entities to implement various prevention and control measures and plans, and strive to present a wonderful, orderly and safe Double Five Shopping Festival to the general public and the consumers.