Core Viewpoint - The main challenge facing the Chinese economy is to expand consumption and increase its contribution to GDP, as current consumption levels are significantly lower than the international average, leading to potential economic issues [3][4] Consumption Quality and Economic Impact - The current consumption quality is declining, which is evident from the low Consumer Price Index (CPI) of -0.1%, indicating a potential quality issue in consumer goods [4][5] - The "all-network lowest price" strategy in e-commerce may attract consumers but can lead to a decrease in product quality as suppliers lower prices to survive, resulting in a negative impact on economic growth [5][6] Information Asymmetry and Market Dynamics - The concept of "lemon markets" illustrates the consequences of information asymmetry, where buyers focus on price rather than quality due to the difficulty in assessing product quality [5][7] - Providing consumers with more information about product quality is essential to mitigate the issues arising from low-price competition [6][8] Research Findings on Brand and Quality Indices - A study conducted with Sun Yat-sen University developed two indices: the Consumption Brand Index and the Brand Purchasing Power Index, which measure brand quality and consumer spending [6][9] - The average Consumption Brand Index increased from 59.4 in Q1 2023 to 63.4 in Q1 2025, indicating a positive trend in brand quality despite overall pessimism about consumption [9][10] Regional Analysis of Brand Indices - The Brand Purchasing Power Index shows stronger purchasing power in eastern coastal regions, while the average Consumption Brand Index is unexpectedly high in certain northern regions [10][11] - Factors such as the proportion of migrant workers and employment in non-private sectors significantly influence brand purchasing power and average brand indices [11][12] Emerging Consumer Trends - New consumer trends are emerging, with brands like Pop Mart gaining popularity among younger consumers, indicating a shift towards quality and emotional experience in consumption [12][13] - The research highlights the importance of focusing on product quality information rather than solely on price signals, suggesting that both brand quality and consumer experience are crucial in the digital economy [13]

Core Viewpoint - The article emphasizes the importance of brand development in the digital economy, highlighting two main paths: enhancing product quality and providing emotional experiences to consumers [1]. Group 1: Consumer Spending and Economic Growth - A significant challenge for the Chinese economy is to expand consumption, increase its share in GDP, and enhance its contribution to economic growth. Currently, only about 56 yuan out of every 100 yuan of GDP is used for consumption, which is approximately 20 yuan less than the international average [3]. - The low consumption ratio not only affects the quality of life but may also lead to oversupply and excess capacity issues. Additionally, there is a phenomenon of consumption downgrade, where the quality of consumer goods is declining [3]. Group 2: Quality Indicators and Market Dynamics - There is currently no effective indicator to reflect the quality of consumer goods. The CPI index has remained around -0.1%, which may indicate quality issues, but price does not always correlate with quality due to market supply and demand complexities [4][9]. - The "lemon market" concept by Nobel laureate George Akerlof illustrates the consequences of information asymmetry, where buyers focus on price rather than quality due to the difficulty in obtaining quality information [5]. Group 3: Solutions to Information Asymmetry - To address the lemon market problem, it is crucial to provide consumers with more information about product quality. This approach is applicable not only to the second-hand car market but also to other consumer goods, especially in e-commerce [6]. - A recent study developed two indices and a ranking system to inform consumers about brand quality and purchasing power, aiming to enhance the understanding of product quality alongside price [6][10]. Group 4: Brand Index Findings - The online consumer brand index in China has been slowly rising, indicating that consumption downgrade is not a universal phenomenon. Different industries show significant disparities in brand index values, with sectors like 3C, furniture, and beauty products having higher brand recognition compared to women's clothing [10][12]. - The average brand index is higher in new first-tier and second-tier cities compared to first-tier cities like Beijing and Shanghai, suggesting regional differences in brand perception and consumer behavior [10][13]. Group 5: Consumer Behavior and Economic Implications - The study found that cities with a higher proportion of migrant workers tend to have a higher brand purchasing power index but a lower average brand index, indicating a complex relationship between labor demographics and consumer preferences [14][15]. - The research also highlights that cities with stable populations tend to have higher average brand indices, while those experiencing significant population outflows may struggle with brand recognition and consumer spending [15]. Group 6: Emerging Brands and Consumer Trends - The study identified several emerging brands that resonate with younger consumers, such as Pop Mart and products catering to pet care, indicating a shift in consumer preferences towards quality and experience rather than just price [16]. - The overall conclusion stresses the need to focus on product quality information rather than solely on price signals, as brand importance is particularly pronounced in the digital economy [16].

Core Viewpoint - The main challenge facing the Chinese economy is how to expand consumption and increase its contribution to GDP, as current consumption levels are significantly lower than the international average, leading to potential economic issues [3][4]. Group 1: Consumption and Economic Growth - Consumption accounts for only about 56 yuan of every 100 yuan of GDP, which is approximately 20 yuan less than the international average [3]. - The low consumption ratio not only affects the quality of life but may also lead to oversupply and excess capacity in the economy [3]. - Recent months have shown a relatively strong growth in social retail sales, likely due to government initiatives aimed at boosting consumption [3]. Group 2: Quality vs. Price - The phenomenon of "price competition" in e-commerce, such as "lowest price" strategies, can lead to a decline in product quality as suppliers are forced to lower prices to survive [4][5]. - The "lemon market" concept illustrates how information asymmetry can lead to a situation where high-quality products are undervalued, resulting in a market that gradually deteriorates in quality [4][5]. - Continuous price declines can create a negative feedback loop that may lead to macroeconomic issues, including economic recession [7]. Group 3: Brand and Quality Information - A recent study developed two indices and a ranking system to provide consumers with quality information alongside price, aiming to address the "lemon market" problem [5][8]. - The study found that the online consumption brand index has been slowly rising, indicating that "consumption downgrade" is not a universal trend [8][10]. - Significant differences exist across industries regarding brand recognition and consumer focus, with some sectors like electronics and beauty products being more brand-conscious than others like women's fashion [10][11]. Group 4: Regional Insights - The brand purchasing power index shows that eastern coastal regions have the strongest purchasing power, while the average brand index is unexpectedly high in certain inland areas [11][12]. - Cities with a high proportion of non-private employment tend to have higher brand indices, suggesting that employment type influences consumer behavior and brand perception [12][13]. - Emerging brands and new consumption trends, such as premium pet food and experiential products, indicate a shift in consumer preferences towards quality and emotional engagement [14].