Koubei is one of Alibaba’s platforms that specializes in providing local services, an area where new retail is an emerging force. New retail is Alibaba’s concept of seamless digital integration of online and offline commerce.

By its upgraded pre-ordering system, smart POS technology, and data-driven operations, Koubei sets to help one million businesses complete smart restaurant transformations. 

Wedome, bakery chain

In June 2018, the bakery chain Wedome collaborated with Koubei to launch the first unmanned smart bakery. With Koubei as the entry point for traffic, consumers can pre-order on the app, and pick-up in store.

In order to improve the consumer experience and eliminate waiting time, Wedome added an image capture cash register technology. Consumers can simply place their preferred bread in front of the register, which will then automatically recognize the items.

In addition, Wedome’s smart shore has incorporated 24-hour unmanned retail services. Consumers can shop for products at any hour, increasing the business time and output.

Wu Fang Zhai

Wu Fang Zhai, founded in 1921, is famous for traditional Chinese food, such as rice dumplings.

The nearly century-old restaurant has undergone a digital transformation with the help of Koubei. Customers can simply scan the QR code from their table to order through the Koubei app. The app will notify them when their order is ready which they pick up from the assigned locker.

Moreover, customers can play an AR game to earn discounts on their meal. They can also use the app to place a takeout order.

After such digital transformation, the revenues, repurchase rate, and per customer transaction of Wu Fang Zhai’s have grown by 40%, 47.5%, and 14.5% respectively.

Furthermore, there is a 24-hour unmanned retail container next to the dine-in area. Consumers can open the container by scanning a code using Alipay at any hour, pick what they want, and leave. The bill will be automatically settled through Alipay.

Other smart technology includes a big screen calling system, augmented reality, and interactive screens. These are all self-service tools that consumers can have hands-on experience with in Koubei’s smart restaurants.

This is an excerpt from CIW eBook: How Alibaba Drives the Transformation of Smart Restaurants

Three factors contribute to instant noodles rebound in 2017. But the increasing popularity of food delivery apps might push this category back into decline.

When talking about consumption upgrading in China, people often use the category of instant noodle as a typical victim. As people chose to eat fresher and healthier food, they began to stay away from instant noodles. As a result, since 2013, the sales of instant noodles did enter a downward spiral.

However, instant noodle makers never give up their fight and managed to have a surprising comeback. Kantar Worldpanel data showed that in the 52 weeks ending December 1, 2017, the sales of instant noodles in the urban area increased by 6.2% in value and 4.1% in volume. There are multiple factors contributing to this category’s revival. We can analyze the trends in product, consumer, and channels.

New premium products unlock growth

Following consumers’ desire to switch from “eating enough” to “eating well”, instant noodle manufacturers have launched several premium products to cater to this trend. For example, Master Kong and President both have introduced instant noodles featuring tasty soups. Kantar Worldpanel data showed that the sales of premium instant noodles achieved double-digit annual growth in 2017. In the 52 weeks ending December 1, 2017, among all urban families, 31% have bought premium instant noodles. About 10.63 million families are new consumers to this category.

Rekindled interest from middle class families

Our data showed that middle-class urban families (household income higher than 9,000 yuan per month) have significantly regained interest in instant noodles: the annual spending from these families increased by 19% from a year ago. Middle-class families contributed 40% of sales value and 37% of sales volume of instant noodles in China. Their support is pivotal to this category’s revival.

Huge room for growth in e-commerce

While hypermarkets, supermarkets, and other offline channels are struggling, online sales of instant noodles have been doing very well: in 2017, the e-commerce sales of instant noodles jumped 28% from a year ago. The average basket size for online purchasing was much bigger: across all channels, the basket size for instant noodles was 5.4 units per purchase, while it was 9.0 units per online purchase.

Compared with the shining data from the current situation, the future of e-commerce is even more appealing. Now only 5.8% of urban Chinese families have bought instant noodles online – a very small number compared with the penetration of offline channels. More than 30% of urban families have bought premium instant noodles through offline channels.

Threat from food delivery apps

Besides abovementioned positive drivers for instant noodle category, there is a fast increasing service that might end its revival: food delivery apps. Since March 2016, Kantar Worldpanel APP Meter has begun tracking mobile app usage behaviour of 32,000 sample consumers across five city tiers in China.

We noticed when consumers get used to ordering food through food delivery apps, they will reduce spending on instant noodles. After a user begins to use a food delivery app, within the first half year, his/her purchasing of instant noodles won’t change much. But it will start to decline gradually if the user continues to rely on food delivery app for meals.

We are not alone in noticing this threat. Instant noodle manufacturers have taken proactive measures to counter these apps’ erosion. They’ve launched DIY noodles, snail noodles, and instant hot-pots to keep attracting new users.

Maybe it’s better to have a bowl of hot noodle that is instantly ready to eat on your desk than wait for a meal that is often late and arrives cold in your hands. Instant noodle manufacturers in China are trying their best to create value and stay relevant in consumers’ fast-changing lives.

Also check out China’s luxury consumption trends here

This article was originally published on Kantar.com

The total retail sales of consumer goods in China reached 3,095.9 billion yuan (US$448.36 billion) in November 2016, up by 10.8% YoY according to National Bureau of Statistics of China.

Of the total, China’s retail sales of consumer goods of units above designated size was 1,479.2 billion yuan, increased by 9.5%.

From January to November in 2016, the total retail sales of consumer goods reached 30,056.0 billion yuan, up by 10.4% YoY. Of the total, the retail sales of consumer goods of units above designated size was13,720.3billion yuan, increased 7.9%.

Retail sales of consumer goods in China urban areas was 2,674.8 billion yuan in November 2016, up by 10.8% YoY; while that in rural areas was 421.0 billion yuan, up by 11.0% YoY. From January to November, the retail sales of consumer goods in urban areas was 25,858.1 billion yuan up by 10.3% YoY while that in rural areas was 4,197.8 billion yuan, up by 10.9% YoY.

China’s online retail sales of goods and services were 4,599.0 billion yuan, increased by 26.2% YoY. Of which, the online retail sales of physical goods was 3,747.0 billion yuan, increased 25.7%, accounting for 12.5% of the total retail sales of consumer goods. Of the online retail sales of physical goods, food, clothing and other commodities went up by 28.4%, 17.9%, and 28.8% respectively.

The Economist Intelligence Unit (“EIU”) expects private consumption in China will grow in real terms by 5.5% a year on average in 2016-30 – boosting its share of the overall economy to nearly 50%.

The incremental growth EIU expect in private consumption in China over the next 15 years is more than current level of consumer expenditure in the EU.

EIU expects nearly 35% of China’s population, or around 480 million consumers, to meet their definitions of upper middle-income and high-income by 2030. That represents a sharp increase on the 10% (132m) at present. The emergence of this large population, with a personal disposable income of at least US$10,000, will alter the consumer landscape in China.

Income will become more dispersed, rather than concentrated in first-tier cities on the eastern
coast. Major interior cities, such as Changsha, Chengdu, Chongqing and Wuhan are set to see sizeable
leaps, with each having at least 2 million high-income consumers by 2030.

Nevertheless, smaller cities and those undergoing industrial restructuring risk being left behind, suggesting that high levels of income inequality will persist.

Rising discretionary income will drive changes in consumer tastes and preferences. Around 30% of the spending by the average Chinese consumer is still allocated to food, compared with only 15% in South Korea. As income levels rise, consumers will look to upgrade consumption habits and switch to more expensive and premium brands.

Chinese spending on health, as well as leisure and education, is likely to experience strong growth in the coming years, as average disposable income levels pass the key thresholds at which spending in these areas has taken off in other countries according to EIU.

There is also strong potential for growth in expenditure on transport and communications, with Chinese spending in this category currently below that of Malaysia when incomes in that country were at the same level.

Retailer websites or apps are the first digital information source in all countries – most notably in the USA, UK, Germany, France and China according to a survey by Digitas.

92% of respondents in China used smartphones for online shopping.

The top 3 categories for digital purchase in China are food (94%), fashion (92%), and household items (89%). Some other interesting data include:

• 56.9% of 25 to 34 years old age group purchase online at least once a day
• 39.6% of fashion purchases by 18 to 24 y-o are done in their bed
• For 86.9% of buyers, online chat is a ‘must’
• 83.1% do not expect delivery within one day (or less)
• 94.3% of people feel real pleasure when shopping online
• 38.5% of online purchases are not made alone
• 68.9% of people don’t want to share their personal details
• 91.4% of people like to have personalized products or services
• Only 2.1% of shoppers head to blogs or forums first, to get product information
• 35.5% of people first search for product information on a retailer website or app
• 20.8% of online food purchases by women are made on Wednesdays
• 39.1% of DIY-Home improvement purchases online are spontaneous
• 35.1% of online purchases for travel & leisure take more than 30 minutes
• 71.1% of Technology purchases online are planned
• 25.3% of people use connected TV at least once a week to purchase online

Also read: China online shopping market overview for Q2 2016

Offline merchants hoped to get more consumers and profits by accessing to the O2O platforms in China in 2015. Tier-3 and tier-4 cities have been a new expanding regions for the O2O platforms. Meituan maintained a prominent position in the less developed cities.

China O2O companies were busy expanding to tier-3 and tier-4 cities in 2015 as more consumers accessed to the service according to Tencent. For example, 36.8% of total transaction values of Meituan came from tier-3 and tier-4 cities in early 2015 and over 80% once came from tier-1 cities in 2010.

China O2O market entered a white-hot competition period in 2015 and companies tried hard to win consumers. The number of merchants on Meituan was only 780,000 in 2014 and the number increased to 1,600,000 in 2015.

Major catering O2O apps were Meituan, Dianping, and Nuomi in China in 2015. Penetration of Meituan in tier-3 and tier-4 cities was far higher than that of other catering O2O apps.

About 50% users would use catering apps less than five times per month according to Tencent and the usage frequency of tier-1 and tier-2 city users was higher than that of tier-3 and below city users in 2015.

About half users spent 100 yuan to 300 yuan each time. 35.4% tier-3 and below city users spent less than 100 yuan and 28.7% tier-1 and tier-2 city users spent less than 100 yuan when catering with O2O apps. However, 10.4% tier-3 and tier-4 city users spent 300 yuan to 500 yuan higher than 8.7% of tier-1 and tier-2 city users.

Competition among food-delivery O2O market also was fierce in 2015. Meituan played a more prominent role in tier-3 and tier-4 cities and the penetration rate surpassed others with a large gap. Penetration rate of food-delivery O2O apps didn’t have much gap in tier-1 and tier-2 cities.

The monthly usage of food-delivery apps came more frequently in advanced cities than less developed cities in China in 2015. The overall usage frequency of food-delivery O2O apps was fewer than the catering O2O apps.

Ctrip was more active in tier-1 and tier-2 cities and Meituan was more active in tier-3 and tier-4 cities when booking hotels online.

36.0% couples in tier-3 and tier-4 cities would reserve hotels online for dating and 38.2% users in tier-1 and tier-2 cities would book hotels for neighboring travel.

Low price, rich hotel resource, and perfect function of hotel O2O apps was the major reasons for users to reserve hotels online in China in 2015.

The increasing travel needs boosted the intense competition of hotel O2O apps. The top seven travel apps were Ctrip, Qunar, Meituan, Alitrip, Tuniu, CY, and eLong.

Rich resource was more important towards tier-1 and tier-2 city users than the less developed city users. Tier-3 and above city users concerned more on low price than other city users.

Catering O2O market developed into a mature stage in 2015. 72.0% merchants surveyed engaged in the catering industry in China in 2015.

The recent two year had witnessed the fast development of the O2O market. 63.0% merchants accessed to the O2O market in 2015 and 21.0% accessed in 2014.

42.0% of offline merchants surveyed accessed to the O2O platforms because of the large orders online and 13.0% because of the quick payback speed. Promotion of salesman was also an important reason for the merchants to access to the O2O platforms.

By accessing to the O2O platforms, offline merchants hoped to get an increase in turnover, profit, and brand public praise.

About 50% of merchants surveyed believed their turnover increased by 10% to 30% after accessing to the O2O platforms and 32.0% believed their turnover increased by 30% to 50%.

Some merchants terminated their cooperation with the O2O platforms. 50.0% terminated because of the loss of consumers and 33.0% because of the decrease of turnover.

The current cooperation mode of merchants and O2O platforms is subsidy plus discount which is expected to upgrade to maintain and draw more merchants and users. The O2O platforms could bring in more traffic and consumers for merchants while how to manage the merchants is still a severe challenge for O2O platforms.

Also read: China B2B Market Insights 2016

About 53.6% of Chinese outbound tourists take shopping as primary objectives of free and easy trips in 2015, according to a research of Mafengwo and TouTiao. At least half of their travel budget will be spent on shopping.

China’s outbound tourism shopping market has reached 684.1 billion yuan (US$107.6 billion) in 2015 – far more than the market size of US$3.8 billion (estimated data by BigData) for China’s cross-border shopping market. Chinese tourists spend an average of 5,830 yuan (US$917.3) on outbound shopping, an increase of 16.3% compared to the same period last year.

Several factors have stimulated the growth of China outbound travel shopping:

• Popularity of Chinese online travel websites 
• Easier visa applications, increasing international air flights
• Increased evaluation of RMB exchange rate
• Food safety concerns in China

Since China is the largest outbound travel origin country in the world, more countries have tended to loosen visa policy and add more Chinese-oriented facilities to attract more Chinese tourists. Simple sceneries couldn’t satisfy Chinese tourists’ needs.

Hotel

66.7% of Chinese tourists prefer to stay in hotels located in the central business district. Research of Mafengwo shows that one out of five Chinese travelers wishes to stay in hotels next to shopping malls.

Catering

Travelers shopping needs also promote the development of tourism destinations catering services. The report also shows that 67% travel shoppers at the same time want to enjoy delicious foods in 2015, far more food lovers compared with 2013 and 2014.

Shopping

With the increase of outbound Chinese tourists, more tourists’ shopping focus turned from buying luxury products to cosmetics, clothes, and daily necessities which are more close to their daily lives. Duty-free shops at airports always gather a large number of Chinese tourists.

China National Tourism Administration expects over 120 million trips traveling abroad in 2015 and total expenditure of Chinese outbound tourists will reach 1.23 trillion yuan (US$0.2 trillion).

Also read: China Annual Cross-border Consumption in 2015

Although China retail’s growth rate has fallen from a peak of 15.6% in 2009 and is slowing, China remains irresistible to global retail chains. China is expected to have average annual retail volume growth of 8.7% in 2015 & 2016. By 2018, it will be the world’s biggest retail market in the world.

The total retail sales of China consumer goods reached 2,580.1 billion yuan ($414 billion), up by 11.9% year-on-year according to National Bureau of Statistics of China in 2014. Further, online shopping value accounted for 10.7% of total retail value in China.

Besides, in the first two months of 2015, China online retail sales of goods was 399.1 billion yuan, increased 47.4%, accounting for 8.3 percent of the total retail sales of consumer goods. Such great success in China’s retail market is partly due to its rapid development in e-commerce market nowadays. See e-commerce market performance in 2014 here.

China is becoming increasingly acquisitive in the food and drinks sectors. In the first half of 2014, food and drink deals accounted for 17% of total Chinese outbound M&A activity.

Asia Retail Sales Volume Growth (%)

Also read: China Online Retail Market Grows 3 Times Faster Than Retail Market

Apparel is the most popular product category for China online shoppers according to McKinsey. And, the most frequent online purchases are packaged and fresh food.

40% of Chinese consumers buy food online, in contrast to just 10% of their US counterparts.

The total transaction value of China online apparel market exceeded RMB434.9 billion (USD70.75 billion) in 2013 with a YoY increase of 42.8%, which accounted for 23.1% of the whole China online shopping market.

It is estimated that in 2014, the total transaction value would increase to RMB615.3 billion (USD100.1 billion) with a YoY increase of 41.5%, accounting for 22.1% of the whole China online shopping market.

Read more: Alibaba Has over 86% Share of China Mobile Shopping Market in 2014

In October 2014, total online advertising spend of food and beverage brands exceeded RMB270 million (US$43.98 million) in China.

Among all the food and beverage brands, AB InBev spent RMB27.32 million ($4.45 million) on online advertising in October 2014, ranking first, followed by UNI-President and Mars China according to data from iResearch.

Web portal, online video platforms, and client-side are the top three ad placement channels for food and beverage companies in China in October 2014. The advertising spend on web portal exceeded RMB144.44 million (US$23.52 million), accounting for 53.2% of the total spend, followed by online video (30.2%) and client-side (5.4%).

Also read: Top Brands in China in 2014

According to National Bureau of Statistics of China, the gross domestic product (GDP) of China in the first three quarters of 2014 was RMB 41,990.8 billion (USD 6,858.5 billion), a year-on-year increase of 7.4%.

China’s year-on-year growth was 7.4% for Q1 2014, 7.5% for Q2 and 7.3% for Q3. The value added of the primary industry was 3,799.6 billion yuan, up by 4.2 percent; that of the secondary industry was 18,578.7 billion yuan, up by 7.4 percent; and that of the tertiary industry was 19,612.5 billion yuan, up by 7.9 percent. The gross domestic product of the third quarter of 2014 went up by 1.9 percent on a quarterly basis.

Agricultural Production Showed Good Momentum.

The total output of summer grain was 136.60 million tons, an increase of 4.75 million tons, up by 3.6%. The output of early rice was 34.01 million tons, a decrease of 125 thousand tons, down by 0.4%. The autumn grain production is expected to get a good harvest again.

In the first three quarters of 2014, the total output of pork, beef, mutton and poultry reached 59.75 million tons, a year-on-year growth of 2.0%. The output of pork reached 39.72 million tons, up by 3.3%.

The Growth of Industrial Production Remained Stable

The total value added of the industrial enterprises above designated size in the first three quarters was up by 8.5% at comparable prices, or 0.3 percentage point lower than that in the first half of the year. The value added growth of the state-owned and state holding enterprises went up by 5.2%; collective enterprises 2.6%; share-holding enterprises 9.9%; and 6.7% for enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan provinces.

The value added of the mining grew by 4.8% on a year-on-year base, the manufacturing by 9.6% and the production and supply of electricity, thermal power, gas and water by 3.1%. The growth rates in eastern, central and western regions were up by 8.0%, 8.5% and 10.6% respectively.

Out of the 464 kinds of industrial products, 346 kinds realized year-on-year increase in output. In the first three quarters, the sales-output ratio of industrial enterprises above designated size was 97.7%, or 0.2 percentage point higher than that in the first half of the year. The export delivery value reached 8,748.3 billion yuan, up by 6.4%. In September, the total value added of the industrial enterprises above designated size was up by 8.0% year-on-year, or 0.91% month-on-month.

In the first eight months of this year, the profits made by industrial enterprises above designated size stood at 3,833.0 billion yuan, up by 10.0% year-on-year. Of this total, the profit from primary activities was 3,587.0 billion yuan, up by 9.6%. The costs for per-hundred-yuan turnover of primary activities of the industrial enterprises above designated size reached 86.06 yuan and the profit rate of the primary activities was 5.52%.

Investment in Fixed Assets Slowed Down.

In the first three quarters, the investment in fixed assets (excluding rural households) was 35,778.7 billion yuan, a growth of 16.1% (a real growth of 15.3% after deducting price factors), or 1.2 percentage points lower than that in the first half of the year.

Investment in the state-owned and state holding enterprises reached 11,236.9 billion yuan, a rise of 14.1%; private investment reached 23,150.9 billion yuan, up by 18.3%, accounting for 64.7% of the total investment.

The growth in eastern, central and western regions was 14.9%, 17.8% and 17.9% respectively. The investment in the primary industry was 864.2 billion yuan, up by 27.7%; the secondary industry 15,018.0 billion yuan, up by 13.7%; and the tertiary industry 19,896.5 billion yuan, an increase of 17.4%. The funds in place for investment in the first three quarters were 39,114.1 billion yuan, up by 12.4%. Specifically, the state budget went up by 14.1%, domestic loans up by 11.2%, self-raising funds up by 16.1%, and foreign investment down by 7.0%. The total planned investment in newly-started projects in the first three quarters was 30,372.9 billion yuan, an increase of 14.4%. In September, investment in fixed assets (excluding rural households) grew by 0.77% month-on-month.

The total investment in real estate development in the first three quarters was 6,875.1 billion yuan, a nominal annual growth of 12.5% (a real growth of 11.7% after deducting price factors), or 1.6 percentage points lower than that in the first half of the year. In particular, the investment in residential buildings went up by 11.3%. The floor space started in the first three quarters was 1,314.11 million square meters, down by 9.3%. Specifically, the floor space of residential buildings went down by 13.5%. The floor space of commercial buildings sold was 771.32 million square meters, down by 8.6%. Specifically, the floor space of residential buildings sold was down by 10.3%. The total sales of commercial buildings were 4,922.7 billion yuan, down by 8.9%. Specifically, the sales of residential buildings were down by 10.8%. The land space purchased for real estate development was 240.14 million square meters, down by 4.6%. By the end of September, the floor space of commercial buildings for sale was 571.48 million square meters, up by 28.0%. The funds in place for real estate development enterprises in the first three quarters reached 8,986.9 billion yuan, up by 2.3%.

Sales on Domestic Markets Enjoyed a Steady Growth.

In the first three quarters, the total retail sales of consumer goods reached 18,915.1 billion yuan, a nominal annual rise of 12.0% (a real growth of 10.8% after deducting price factors), or 0.1 percentage point lower than that in the first half of the year.

The retail sales of the enterprises (units) above designated size stood at 9,423.3 billion yuan, up by 9.5%. Analyzed by different areas, the retail sales in urban areas reached 16,313.2 billion yuan, up by 11.9%, and the retail sales in rural areas stood at 2,601.9 billion yuan, up by 13.0%.

Grouped by consumption patterns, the income of catering industry was 1,993.4 billion yuan, up by 9.7%; and the retail sales of goods were 16,921.7 billion yuan, up by 12.3%. In particular, the retail sales of the enterprises (units) above designated size reached 8,841.4 billion yuan, an annual growth of 10.1%. In September, the total retail sales of consumer goods rose 11.6% year-on-year (a real growth of 10.8% after deducting price factors), or 0.85% month-on-month.

In the first three quarters, the online retail sales reached 1,823.8 billion yuan, a year-on-year growth of 49.9%, and the online retail sales of the enterprises (units) above designated size stood at 288.8 billion yuan, up by 54.8%.

The Growth Rates of Imports and Exports Picked up.

The total value of imports and exports in the first three quarters was 19,422.3 billion yuan or 3,162.6 billion US dollars, an increase of 3.3%, or 2.1 percentage points higher than that in the first half of the year.

The total value of exports was 10,422.4 billion yuan, or 1,697.1 billion US dollars, up by 5.1%; the total value of imports was 8,999.8 billion yuan, or 1,465.5 billion US dollars, an increase of 1.3%. The trade surplus was 1,422.6 billion yuan or 231.6 billion US dollars.

In September, the total value of imports and exports was 2,441.7 billion yuan or 396.4 billion US dollars, up by 11.3%. The total value of exports was 1,315.9 billion yuan or 213.7 billion US dollars, up by 15.3%; and that of imports was 1,125.8 billion yuan or 182.7 billion US dollars, up by 7.0%.

The Growth of Consumer Price was Generally Stable.

In the first three quarters, the consumer price went up by 2.1% year-on-year, or 0.2 percentage point lower than that in the first half of the year. Specifically, the price went up by 2.2% in urban areas and 1.9% in rural areas.

Grouped by commodity categories, prices for food rose by 3.3%; tobacco, liquor and articles down by 0.6%; clothing up by 2.4%; household facilities, articles and maintenance services up by 1.2%; health care and personal articles grew by 1.2%; transportation and communication up by 0.1%; recreation, education, culture articles and services grew by 2.2% and housing went up by 2.3%.

In terms of food prices, grain grew up by 3.1%, oil or fat down by 5.0%, pork down by 4.5% and fresh vegetables down by 1.3%. In September, the consumer prices went up by 1.6% year-on-year, or 0.5% month-on-month.

In the first three quarters, the producer prices for industrial products went down by 1.6% year-on-year, while the price in September dropped by 1.8% year-on-year and 0.4% month-on-month. The purchasing price for industrial producers was down by 1.8% year-on-year. In September, the price was down by 1.9% year-on-year and 0.4% month-on-month.

Residents’ Income Kept Steady Growth.

In the first three quarters, the per capita cash income of rural households was 8,527 yuan, up by 11.8% nominally, or 9.7% in real terms. The per capita disposable income of urban households was 22,044 yuan, a nominal growth of 9.3%, or a real growth of 6.9% after deducting price factors.

Based on the integrated household survey, in the first three quarters of 2014, the national per capita disposable income was 14,986 yuan, a nominal growth of 10.5% or a real increase of 8.2%. The median of the national per capita disposable income was 13,120 yuan, a nominal increase of 12.1%.

By the end of September, the number of rural migrant workers was 175.61 million, which was 1.69 million more than that in the same period last year, or up by 1.0%. The average monthly income of migrant workers was 2,797 yuan, up by 10.0%.

Structural Adjustment Achieved Considerable Progress.

The industrial structure was more optimized. In the first three quarters, the value added of the tertiary industry accounted for 46.7% of the GDP, which was 1.2 percentage points higher than that in the same period last year, or 2.5percentage points higher than that of the secondary industry.

The structure of domestic demand continued to be improved. In the first three quarters, the final consumption expenditure accounted for 48.5% of the GDP growth, which was 2.7 percentage points higher than that in the same period last year. The income gap between urban and rural households was further narrowed.

In the first three quarters, the real growth of the per capita cash income of rural households was 2.8 percentage points higher than the per capita disposable income of urban households. The per capita income of urban households was 2.59 times that of the rural households, 0.05 less than that of the same period last year. Energy conservation and consumption reduction continued to make new achievements. In the first three quarters, the energy consumption per unit of GDP went down by 4.6%.

Money Supply Maintained a Steady Growth.

By the end of September, the balance of broad money (M2) was 120.21 trillion yuan, a year-on-year growth of 12.9%; the balance of narrow money (M1) was 32.72 trillion yuan, up by 4.8%; and the balance of cash in circulation (M0) was 5.88 trillion yuan, a rise of 4.2%.

At the end of September, the amount of outstanding loans was 79.58 trillion yuan, while the amount of outstanding deposits was 112.66 trillion yuan. In the first three quarters, the newly increased loans reached 7.68 trillion yuan, an increase of 404.5 billion yuan; the newly increased deposits were 8.27 trillion yuan, a decrease of 2.99 trillion yuan year-on-year. The social financing reached 12.84 trillion yuan, a decrease of 1.12 trillion yuan year-on-year.

China’s economy grew at its slowest pace in more than five years in Q3 2014 though the data still beats estimates.

Read more: China Consumer Prices Index Up by 1.6% YoY in September