Shanghai is paving the way for a growing debut economy

Shanghai stands out as a pioneer of China’s debut economy, a concept highlighted during the landmark annual Central Economic Work Conference in Beijing on December 11 and 12.

The new economy is expected to hold huge potential to boost consumer demand and transform the retail market, experts said while discussing the implications of the meeting to outline priorities for economic work in 2025.

Debut economy refers to the benefits created by product launches or the opening of the first stores in a region, and also includes the introduction of new services or the creation of new business models and technologies.

“The development of the debut economy meets the demand for China’s improved production capacity as well as a unified national market,” said Sun Lijian, director of Fudan University’s Financial Research Center.

As China advances its economy with new, high-quality productive forces, the time is right to promote the debut economy with its inherent innovation and creativity to better serve the evolving consumer market, Sun said.

“Shanghai is a pioneer among Chinese cities in exploring the debut economy and should further tap the gigantic consumer market by showcasing new product launches and debut shows of various brands,” Sun added.

As the first destination for many international brands entering the Chinese market, Shanghai should provide the highest standard of international offerings and enhance market vitality through best experiences and a solid business environment, as well as promote innovation, he said.

Shanghai launched the country’s first-store economy back in 2018, inviting more than 4,500 brands from home and abroad to launch initial operations in the city between May 2018 and December 2023, said Zhu Min, director of the Shanghai Commission of Commerce. During the same period, around 5,840 first stores at various levels were opened in Shanghai, Zhu said.

This year, the momentum continued as 450 first stores opened in the city in the first quarter, up 55 percent year-on-year, Zhu said.

According to a research report by CITIC Securities, the debut economy has three characteristics. This includes the introduction of products and services that promote innovation in multiple formats, chain development that covers most of the industrial sector and a leadership role that facilitates industrial modernization.

“The debut economy will play a major role in promoting high-quality new consumer offerings and stimulating domestic consumption demand, as the Central Economic Work Conference has emphasized,” the report said.

Chen Guo, chief strategist at China Securities, was quoted by Shenzhen Securities Times as saying that the new economy can lead the consumption trend, improve brand image and promote industrial upgrading.

Among all the possibilities, new stores or new services could be discovered in areas such as toys, games, film and television and theater, as well as the opening of the first stores in the retail sector, Chen added.

In recent years, the new economy has shown its appeal in cities such as Shanghai and Beijing, as well as Chengdu in Sichuan Province, Guangzhou in Guangdong Province and Nanjing in Jiangsu Province, and dozens of policies or measures have been issued to open initial businesses in the Region to promote China from 2023, according to Shanghai Securities News, citing statistics from the China General Chamber of Commerce.

In addition, Sun from the Financial Research Center of Fudan University pointed out that the Central Economic Work Conference in Beijing proposed promoting the debut economy along with the ice and snow economy and the silver economy.