Reviving China: can ‘Xiconomics’ help mainland’s economy the way ‘Reaganomics’ boosted US?
President Xi Jinping’s call for ‘supply-side’ reforms, such as cutting government controls and allowing the free market to operate, means it could become a distinctive feature of China’s economic and social policies in 2016 and beyond
China’s economic growth may be losing steam, but business is soaring at e-commerce firm Bolo.me.
The company, based in Shanghai, launched just five months ago and its mobile app has already chalked up 1.3 million users, who use it to buy everyday items like cosmetics, shampoo and napkins from overseas manufacturers, mostly based in Japan and South Korea.
It also allows consumers to view live feeds of the factories that pump out the goods, and the brick-and-mortar stores selling them in Seoul or Tokyo, letting mainlanders tap into the “local shopping experience”.
Orders are flying in like snowflakes. Chinese consumers just can’t get enough of high-quality products
“Orders are flying in like snowflakes,” said Bolo.me co-founder Xu Sheng. “Chinese consumers just can’t get enough of high-quality products.”
The company, which is valued at US$200 million, is riding a wave of success thanks to Chinese outbound shopping demand. Last year, mainland consumers spent at least 1 trillion yuan (HK$1.2 trillion) on foreign goods, with major e-commerce businesses, including Alibaba and JD.com, all jostling to become the favourite gateway.
READ MORE: Luxury shoppers in China spending 28 per cent more per online purchase than in 2014, study shows
The influx is a sign of rising Chinese consumer power on the global stage, but it has also set off alarm bells. Why is China, once widely regarded as the “world’s factory”, not making the goods that its people want here at home? More broadly, what should China be doing to rebalance its growth model so that it can be more sustainable?
According to President Xi Jinping, the answer is “supply-side” economic reform.