Policy support poised to reshape nation's retail industry

Recently, the Ministry of Commerce and eight other departments jointly issued the Opinions on Accelerating the Innovative Development of the Retail Industry. Focusing on the systematic planning of the retail industry landscape, fostering new forms of retail supply, creating new consumer demand, stimulating new retail growth drivers, facilitating fair competition and strengthening policy support, the document puts forward 20 measures, providing a clear roadmap for retail innovation during the 15th Five-Year Plan (2026-30) period.

At a time when the retail sector is at a critical stage of transformation and upgrading, what is the deeper significance of this policy document? Which of the 20 measures deserved particular attention? What impact will they have on the sector overall and on consumers? And how should they be implemented going forward? This article examines these questions one by one.

During the 14th Five-Year Plan (2021-25) period, China's goods retail sales rose from 39.4 trillion yuan ($5.84 trillion) in 2021 to 44.3 trillion yuan in 2025, representing cumulative growth of 12.5 percent. Goods retail sales have long accounted for about 90 percent of total consumer goods retail sales, and the retail sector supports more than 80 million jobs. However, expansion in scale has been accompanied by uneven outlet distribution, supply-demand mismatches, rising operating costs and an imbalance between online and offline retail. These problems have weakened profitability and affected consumer experience, especially for traditional hypermarkets and department stores facing declining foot traffic and mounting pressure.

Against this backdrop, the Opinions introduce four major policy breakthroughs.

First, the document proposes a commercial facilities saturation assessment mechanism for the first time. By strengthening the monitoring of retail commercial facilities and supporting qualified cities in carrying out saturation assessments, the mechanism is expected to provide a reference for project approval and social investment. In the past, commercial property development relied heavily on market signals. But information asymmetry and herd behavior often resulted in redundant investment, homogeneous competition and inefficient supply. In this sense, the mechanism can serve as a "barometer" for commercial investment, helping reduce blind construction and resource waste.

Second, the document clarifies the differentiated roles of online and offline retail. By 2030, offline retail is expected to become a space for shopping, leisure, immersive experience, entertainment and social interaction, while online retail is expected to become a standardized shopping channel offering abundant goods, reliable quality and regulated operations. This marks a shift from the previous zero-sum relationship between online and offline retail. In essence, offline retail should focus on experience, social interaction and consumption scenarios, while online retail should emphasize efficiency, quality and compliance. Retail is therefore moving from a goods-centered distribution network toward a consumption ecosystem driven by traffic, content, data and experience.

Third, the document introduces stronger institutional constraints to address unfair or unbridled competition. It calls for equal treatment of online and offline retail, reasonable platform fees, lower operating costs for platform merchants, stronger antimonopoly review, and fairer algorithmic recommendations and traffic distribution. Platforms are encouraged to establish diversified recommendation indicators rather than using price as the sole determinant. Meanwhile, the document targets false advertising, fake promotions, misleading discounts and unfair pricing, and prohibits platforms from forcing merchants to bear subsidy costs or participate in promotional campaigns. Taken together, these measures aim to create a fairer market environment through antimonopoly regulations, price governance, algorithmic transparency and unified supervision.

Fourth, the document strengthens policy support to solve the "last-mile" problems of retail transformation. It provides support in land use, cost reduction, financing, approval procedures and legal safeguards. Qualified high-quality new retail enterprises are encouraged to seek public listings; eligible retailers may issue asset-backed securities (ABS) and commercial real estate investment trusts (REITs); and financial institutions are encouraged to design credit policies suited to the retail sector. Meanwhile, retail enterprises are encouraged to participate in green certificate and green electricity transactions, benefiting from employment-stabilization policies and renovating idle commercial facilities with clear ownership. These measures will broaden financing channels, reduce operating costs and provide systematic support for transformation.

The impact of the document is expected to be transmitted across consumers, enterprises, the retail ecosystem and the broader economy.

For consumers, shopping will increasingly become part of a broader lifestyle experience. Offline retail will no longer be merely a place to buy goods, but also a space for exhibitions, concerts, sports experiences, pet-friendly services and social interaction/activities. Standardized community commerce and instant retail will make daily life more convenient, while facilities catering to the elderly and children will make consumption settings more inclusive and enjoyable. In online retail scenarios, greater algorithmic transparency and more regulated promotions will help reduce problems such as price discrimination and forced bundling, enabling consumers to shop with greater clarity and confidence.

For retail enterprises, fair competition will have stronger institutional support, while transformation paths will become more diversified. Physical retailers have long faced pressure from platform subsidies, algorithmic bias and transferred promotional costs. The new framework — covering antimonopoly enforcement, price regulation, algorithmic transparency and unified supervision — will help create a more level playing field. Stronger firms may develop deeper joint operations, self-operated supply chains and manufacturing-oriented retail, while small and medium-sized merchants may reduce costs through voluntary chains, alliances and joint procurement arrangements. New models — such as omni-channel retail, instant retail and "online traffic plus offline transactions" — can also create new growth space for traditional stores.

For the retail sector as a whole, competition will shift from price and location to experience and efficiency. Retail supply is no longer limited to products. It is increasingly built around scenarios, content and services. Supply-chain innovations — including shared warehousing, unified distribution and standardized coding systems — will shorten circulation links and reduce inventory losses.

Ultimately, the key lies in effective implementation.

First, planning should be used to address layout imbalances. The document calls for national standards on commercial outlet planning and better coordination with territorial spatial planning and urban renewal. Local governments should avoid redundant or repetitive construction, and accelerate the development of practical indicators for saturation assessment.

Second, scenario innovation should be used to revitalize offline retail. The document encourages one-store-one-policy innovation, renovation of old commercial districts, upgrading of shopping streets and commercial blocks, and digital transformation of commercial facilities. Local governments should adapt these measures to local consumer culture and resource endowments, as high-quality scenarios can both attract foot traffic and deepen consumption.

Third, unified regulation should ensure fair competition. Measures such as unified standards for online and offline promotions, fairer algorithmic recommendation systems and stronger price governance require detailed implementation rules. Market regulators should establish routine enforcement mechanisms that apply equally to online and offline retail.

Fourth, integrated policy support should solve last-mile difficulties. Retail innovation should be linked with the modern commercial circulation system and pilot programs for new consumption models and scenarios. Governments at all levels need to break departmental barriers, improve policy coordination and translate land use, financing, tax and fee reductions, talent development and employment support into specific, executable and assessable measures.

In conclusion, the Opinions are not a simple policy adjustment. They are instead a systematic reform of retail development concepts and pathways. They respond to the urgent needs of retail transformation, clarify the differentiated roles of online and offline retail, establish a fairer competition framework and provide comprehensive factor support. By 2030, China aims to build a modern retail system with rational layout, high-quality supply, diversified business formats, smart and convenient services, and fair and orderly competition.

The writer is a researcher at Jiangsu Su Merchants Bank.

The views do not necessarily reflect those of China Daily.