Premier Li Keqiang made a report on the work of the State Council on February 2023. The retail industry is stated as follows: “We will promote a sustained recovery of consumption. We will increase residents’ income through multiple channels, improve the income distribution system, and enhance consumption capacity. We will promote the deep integration of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) consumption, promote the recovery of consumption of living services, and develop new forms and models of consumption…. we will strengthen the construction of county business system, develop rural e-commerce and express logistics distribution. We will improve the quality of products and services and strengthen the protection of consumers’ rights and interests We will work hard to meet the needs of the masses and enhance the willingness to consume. “.
Interpretation: we have combed the statements about the retail industry in the government work reports in the past few years. Compared with previous years, the government work report published in 2022: 1) emphasizes common prosperity, improves the income distribution system, improves consumption capacity, and proposes to strengthen the construction of County commercial system, which will be conducive to the commercial development of low-level cities, the continuous expansion of capacity of middle-income people and improve the consumption capacity of optional products. 2) It is proposed to promote the deep integration of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) consumption and promote the recovery of life service consumption, which will be conducive to accelerating the recovery of offline consumption scene passenger flow through the establishment of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) integration. Based on the above two points, we think it will benefit the department store and gold jewelry sector. This is mainly due to: 1) the recovery of passenger flow is conducive to the recovery of offline retail formats; 2) The main target customers of department stores and gold jewelry are middle-income people, benefiting from the expansion of middle-income people.
Risk analysis: the growth rate of residents’ consumption demand did not meet expectations, the post real estate cycle affected the income growth of some sub industries, and the impact of channel reform on the existing business model was higher than expected.
