The growth rate of China’s consumption market will recover sharply this year, thanks to the booming service consumption sector, growing online consumption and smart retail, industry experts said.

Zhao Ping, director of the international trade research department of the Academy of China Council for the Promotion of International Trade, said the burgeoning service consumption sector will boost steady growth of the whole consumption sector this year.

The national average service consumption expenditure reached 2,329 yuan ($346.7) in the first quarter of this year, surging 11.9 percent year-on-year, data from the Ministry of Commerce showed. That growth rate was 4.6 percentage points higher than the total average consumption expenditure growth. Specifically, average food and beverage service consumption jumped by 18.6 percent, average medical service consumption soared 15.7 percent, while average education expenditure shot up by 35.8 percent.

The fast-growing online consumption sector also played an important role. According to the National Bureau of Statistics, the national online retail sales volume reached 2.24 trillion yuan in the first quarter of 2019, expanding 15.3 percent year-on-year. Online physical commodity retail sales volume grew by 21 percent year-on-year to 1.78 trillion yuan. Sales of food, clothing and daily necessities went up by 24.6 percent, 19.1 percent and 21.3 percent year-on-year respectively.

“This year, the pace of 5G commercialization is accelerating, and the construction of new infrastructure such as artificial intelligence, industrial internet, and the internet of things is constantly improving. The investment of intercity transportation, logistics, and municipal infrastructure is constantly increasing. The government strives to help enterprises reduce network costs, by lowering small and medium-sized enterprises’ broadband cost by 15 percent, while cutting the average cost of (the) mobile network by more than 20 percent. The environment of e-commerce is becoming increasingly friendly.

“The digital transformation of traditional industries, online companies expanding their offline businesses, and the improvement of technologies such as logistics, facial recognition, voice recognition, mobile payment and group purchase enhanced the quality of e-commerce service and improved consumer experience, online consumption will play a more significant role in boosting the whole consumption segment,” Zhao said.

Jiang Zengwei, former vice-minister of commerce, said innovation in the retail sales industry also offers support for consumption growth. “Only through innovative development can we grasp market opportunities. The innovation in retail sales requires conceptional innovation and business mode innovation. New business mode should accept challenges from the market, achieve the balance between cost and benefit, and bring benefits to consumers eventually.”