Group 1: Economic Contribution of Domestic Demand - In 2024, domestic demand is expected to contribute 69.7% to economic growth, with final consumption expenditure accounting for 44.5% [1] - By the first half of 2025, domestic demand's contribution to GDP growth is projected to reach 68.8%, becoming the main driver of GDP growth [1] Group 2: Consumer Psychology and Pricing - Consumer behavior is significantly influenced by psychological factors such as price trends, income expectations, and the consumption environment [1] - Price is a powerful market signal that affects consumer and producer behavior; rising prices typically lead to decreased demand, while falling prices can stimulate consumption [2] - The "Veblen Effect" suggests that higher prices can attract consumers by signaling higher quality and status, while the "Giffen Paradox" indicates that demand for certain goods may increase as their prices rise due to perceived necessity [2][3] Group 3: Income Distribution and Consumer Capacity - Consumer capacity is directly related to income levels, with income inequality and instability being long-term issues affecting consumption in China [7] - In 2024, China's Gini coefficient is reported at 0.462, indicating significant income disparity [7] - The average disposable income for urban residents is 54,188 yuan, while for rural residents it is 23,119 yuan, with an urban-rural income ratio of 2.34:1 [7] Group 4: Policy Recommendations for Consumption - Recommendations include optimizing consumption policies to stabilize consumer price expectations and ensure reasonable profit margins above costs [4] - The government is advised to enhance income distribution reforms and explore various channels to increase the income of low- and middle-income groups [8] - It is suggested to improve the social security system and enhance public services to alleviate concerns regarding pensions and healthcare [8] Group 5: Consumer Environment and Trust - A safe and reliable consumption environment is crucial for enhancing consumer experience and willingness to spend [9] - Despite improvements, there are still significant issues in consumer rights protection and various market challenges that affect consumer sentiment [10] - In 2024, consumer complaints increased by 32.62%, highlighting ongoing issues in service quality and product safety [10] Group 6: Regulatory and Monitoring Measures - It is recommended to strengthen regulatory measures to prevent unfair competition and ensure compliance with pricing standards [4][11] - Establishing a smart regulatory system and enhancing consumer rights protection mechanisms are essential for fostering a trustworthy market environment [11] - The government should promote transparency and accountability among businesses to improve consumer confidence [11] Group 7: Economic Context and Future Outlook - The current international economic landscape emphasizes the urgency of expanding domestic demand and boosting consumption [12] - Optimizing consumption policies based on consumer psychology is vital for unlocking consumption potential and driving economic growth [12]

Core Viewpoint - The article discusses the phenomenon where higher prices can lead to increased sales, challenging the common belief that lower prices always drive better sales performance. It highlights the concepts of Veblen Effect and Giffen Goods to explain consumer behavior regarding pricing and demand. Group 1: Veblen Effect and Luxury Goods - The Veblen Effect suggests that consumers may demand more of a product as its price increases, particularly for luxury goods, as higher prices can enhance perceived value and status [11][14][20]. - Examples include a warming underwear factory in China that raised prices from 50 yuan to 140-150 yuan, resulting in a 30% increase in orders [9]. - Similarly, luxury brands like Chanel and Van Cleef & Arpels have successfully increased prices while boosting sales, demonstrating the effectiveness of this pricing strategy [12][13]. Group 2: Giffen Goods and Consumer Behavior - Giffen Goods illustrate a scenario where demand for a product increases as its price rises, contrary to typical economic expectations. This phenomenon was observed during the Irish Potato Famine [22][24]. - The article explains that when essential goods like potatoes become more expensive, consumers may buy more of them due to the lack of affordable alternatives, showcasing a unique consumer psychology [28][36]. Group 3: Price Elasticity and Market Dynamics - The concept of price elasticity is crucial in understanding consumer behavior. Products with high elasticity see demand fluctuate significantly with price changes, while necessities tend to have inelastic demand [56][57]. - The article warns that relying solely on a low-price strategy can lead to detrimental price wars, ultimately harming the industry as a whole [59]. Group 4: Consumer Preferences and Pricing Strategies - The article argues that consumers do not always prefer cheaper options; instead, they may seek products that offer perceived value, even at higher prices [44][45]. - It emphasizes the importance of aligning product pricing with its perceived value and utility, suggesting that higher prices can sometimes lead to better sales if consumers recognize the product's worth [60].

Group 1 - The article discusses the misconception that lower prices lead to higher sales, highlighting instances where raising prices has stimulated demand instead [1][4][40] - The concept of the Veblen effect is introduced, where higher prices can increase consumer demand for luxury goods, as seen in examples from the clothing and toy industries [5][6][10] - The article cites specific cases, such as the price increase of warming underwear and collectible toys, which resulted in significant order growth and resale value appreciation [6][8][9] Group 2 - The article contrasts the Veblen effect with the Giffen phenomenon, where demand for a staple good like potatoes can increase despite rising prices due to lack of alternatives [25][26][34] - It explains that the Giffen phenomenon occurs under specific conditions, such as when consumers are forced to buy more of a staple as other food prices rise [27][28][36] - The article emphasizes that consumer behavior is influenced by both horizontal and vertical comparisons, affecting purchasing decisions based on perceived future price trends [30][34][37] Group 3 - The article argues that consumers do not always prefer cheaper options, as demonstrated by the evolution of consumer behavior towards higher-priced, high-quality products over time [56][58][60] - It introduces the "V-shaped price curve," suggesting that consumers may initially reject high prices but eventually seek out premium products once low prices become normalized [57][59] - The article highlights the importance of perceived value in consumer purchasing decisions, indicating that consumers are willing to pay more for products they deem valuable [61][62] Group 4 - The article discusses the concept of price elasticity of demand, explaining that products with high elasticity can benefit from a low-price strategy, while essential goods tend to have inelastic demand [76][79][80] - It warns that relying solely on a low-price strategy can lead to industry-wide price wars, ultimately harming profitability for all players involved [81][82] - The article concludes that raising prices can be beneficial if aligned with product value and consumer expectations, suggesting that higher prices can lead to better sales outcomes [83][84]