On July 21, the central government held a meeting and pointed out that we must concentrate our efforts on doing our own affairs, give full play to the advantages of the domestic super-large-scale market, and gradually form a new development pattern with domestic large-scale circulation as the main body and domestic and international dual-cycle mutual promotion, and upgrade the industrial chain The level of modernization of the supply chain, vigorously promote technological innovation, accelerate key core technology research, and create new advantages for future development.

　　 The interpretation of CCTV Quick Comment is this:

　　 Concentrating efforts to run one's own affairs well and form a new development pattern must be based on the domestic cycle and firmly grasp the overall situation. Under the new situation of anti-globalization, rising trade protectionism, and shrinking world market, it is even more necessary for us to take the strategic overall situation of the great rejuvenation of the Chinese nation and the major changes unseen in a century as the basic starting point of our planning work, and to have a deep understanding of international and domestic The long-term and complex nature of these unfavorable factors should be properly prepared for various difficult situations. Leading cadres at all levels must resolutely implement the decisions and arrangements of the Party Central Committee, give full play to the advantages of the domestic super-large market, and add impetus to my country's economic development by prospering the domestic economy and smoothing the domestic cycle.

What does 　　 inner loop mean?

Li Xunlei, chief economist of Zhongtai Securities, pointed out that there are many misunderstandings in the "internal cycle" that is being discussed. If there is a view, the "internal cycle" means "independence and self-reliance", back to before the reform and opening up; It is believed that the "internal circulation" is bound to stimulate domestic demand, and that stimulating domestic demand relies on measures such as the government to increase leverage.

　　 Li Xunlei believes that the main body of "inner circulation" should be more about improving the "supply side", which complements the supply-side structural reforms. In the process of China's economic transformation and upgrading, China's position in the global supply chain must be improved. There should be no major problems with the low-end supply. The key is that the high-end supply capacity is weak.

In 2005, my country’s foreign trade dependence reached a historical high of 64%, and then slowly declined, and now it has fallen to about 30%. Moreover, the proportion of processing trade is also declining, that is, "two ends are out, big in and big out." The phenomenon of "external circulation" is weakening, and the contribution of domestic demand to economic growth has been increasing.

"Internal circulation as the main body" has actually become a trend. In recent years, while expanding domestic demand, my country has not only increased its efforts to introduce foreign capital, but also strengthened cooperation in exporting capital. This actually reflects the "accelerating the formation of a large domestic circulation as the main body. , The strategic thinking of the new development pattern of mutual promotion of domestic and international double cycles.

　　In the era of digital economy, the more developed the economy is, the larger the scale of the "external circulation", and the more backward the region, the smaller the scale of the "external circulation".

　　Internal circulation does not mean the expansion of domestic demand in a narrow sense. From a macro perspective, the internal circulation has three guiding significance for the entire economic operation:

　　 First, the national economic system strengthens its ability to operate independently. It is not only the expansion of domestic demand, but more importantly, the domestic production capacity. The supply system must be healthier. Through the healthy development of the national economy, employment and income will be increased.

　　 Second, supply-side reforms to optimize the economic structure. For example, the regulation of real estate. Many economists believe that the internal economic cycle is to rely on internal forces to drive GDP, of which consumption is the main force. This necessitates suppressing housing prices, because housing prices are too high, and residents will be burdened with a lot of debt, so that less money can be spent on consumption. From this perspective, even if house prices cannot fall in the future, they must remain stable in the future.

　　 In addition, another important direction of supply-side reform is to digest excess capacity, optimize structure, and expand domestic demand.

　　 Third, in the globalized industrial chain, improve the value and capabilities of Chinese companies in the industrial chain, moving from low-end to high-end.

　　 Li Xunlei believes that the current deteriorating international trade situation, such as the U.S.’s cut-off of Huawei’s chips, makes us subject to others.

　　 Therefore, the internal cycle is to increase the supply of these areas. In high-tech industries such as chips and semiconductors, we must form internal production capacity to improve the competitiveness of enterprises in the world. However, such an inner loop cannot be achieved overnight. After all, decades of technology accumulation, even if a lot of resources are invested to overcome it, it takes time. This is the law of nature and has nothing to do with human efforts.

　　Internal circulation brings opportunities to the retail industry

　　The development of the retail industry depends on consumption. The consumption power depends on the income level of residents and the ratio of investment and savings to income. Judging from the overall guidance of internal circulation, it is clear that we hope to stimulate consumption.

　　 To optimize the industrial structure and eliminate overcapacity, the ultimate goal is to increase the income level of both enterprises and individuals. Although consumption is not necessarily related to income, from a macro perspective, this is obviously good news for the entire retail industry.

　　Internal circulation is a policy setting. It is closely related to the current international and domestic environment.

　　 First, the epidemic has had an impact on the global economy, and the retail industry in particular has suffered greater trauma. Catering, cinema, offline education, tourism, travel, etc. all failed to achieve a good harvest in at least the first half of the year.

　　 In particular, the epidemic is in a state of recurrence, and sporadic positive case reports have made people more cautious about travel and consumer psychology, so there is no retaliatory consumption that was predicted after the epidemic ended.

　　Second, China and the United States continue to engage in hostilities, and the impact of the trade war continues. The U.S. series of extremely vicious restrictions on Chinese high-tech companies have increased the uncertainty of the development of large companies and at the same time have an adverse impact on China's import and export trade.

In the entire economic system, unfavorable upstream factors will lead to two related results. One is that the reduction in business income of enterprises affects the income status of employees and even the employment status; the other is that people’s uncertainty about the future will produce More conservative consumer psychology.

　　Increase the positive stimulus effect of internal circulation on economic operation. For the entire retail industry, at least the following three aspects have a positive effect:

　　First, adjust the industrial structure and optimize the operating capacity of the macro economy. Minimize the negative effects of the internal epidemic and the suppression of external hostile countries. Let the operating machinery of the entire Chinese economy get out of the trough as soon as possible. The downstream retail industry will also usher in vitality.

　　Second, China's huge domestic market is still stable ballast. Whenever the Chinese economy encounters difficulties, stimulating domestic demand has become an important adjustment measure. Stimulating domestic demand is more important to improving people’s expectations for the future. Suppress housing prices and reduce the willingness to speculate, so that more funds can be invested in other consumer areas.

　　 Third, effective internal circulation can actively and quickly eliminate the "overcapacity" situation. In the field of industrial production, overcapacity leads to indigestion. When export trade is not smooth, a large number of low-tech products will become an inventory backlog. When the upstream economy lacks vitality, downstream consumption will also be weak.

　　 Trends and forecasts of the retail industry in the second half of the year

　　 Christakis holds this view in the book "Blueprint":

　　 There is more unity between people, rather than division, and society tends to be good in nature.

　　 25 years ago, Christakis started as a hospice doctor. He discovered that nothing can hold us together like grief and death. When the life of a dying patient is coming to an end, no one is unwilling to share some wishes, such as making up for their own faults, missing their loved ones, and telling stories to those willing to listen.

　　 Since then, Christakis has been thinking about how much people are essentially similar. These years of thinking strengthened his view, that is, regardless of region and color, what we have in common far exceeds the differences between people.

　　In other words, when all people face a common, huge tragedy or disaster, it is possible for people to be more united and trust each other.

　　 The epidemic has not made some countries more united and cooperative, such as Sino-US relations. But from the perspective of the whole world, human beings are still more effective and highly cooperative and help each other in the face of a common virus.

　　 Therefore, the trade circulation between countries, that is, the "outer cycle" relative to the internal cycle, will gradually move toward a benign one. This is beneficial to both domestic and external demand.

　　 In addition, from the perspective of the entire domestic retail industry, there will be at least the following foreseeable trends in the second half of this year:

　　 1. The expansion of offline physical retail will tend to be conservative or even stagnant. At least by the end of this year, the expansion rate of offline physical stores will shrink further, and some stores will even continue to close.

　　 2. Social e-commerce will have more new models. Online retail will continue to seek new ideas and breakthroughs. The models of social e-commerce are becoming more and more diverse. Not only do they only help to bargain prices like Pinduoduo, there will also be a group leader group model, more wechat platform models, and short video private domain traffic real-time setting models.

　　 3. E-commerce giants further differentiate and diversify. For example, JD Daojia, Meituan Flash Sale, Xiaomi Youpin, etc., they do not change and differentiate. They have diversified models and enter new subdivisions. They will further focus on consumers to provide personal services and further liberate consumers’ shopping costs. .

　　 Fourth, small and beautiful online and offline integrated stores continue to emerge. From fresh produce to convenience stores, from fashion pop-up stores to creative flagship stores of cultural and creative industries, the storefront will become smaller, more refined, and online and offline integration will become the mainstream.

　　 5. Offline physical stores increasingly rely on online platforms. For example, platforms such as Tmall, Taobao, and JD will have more and more offline entities stationed on them. In the same city retail sector, catering, flower cakes, medicine, etc. will increasingly enter the Meituan and Ele.me platforms.

　　 6. At the level of marketing strategy, when the limelight has passed, everyone will be more rational and seek more effective marketing methods that suit the characteristics of the industry. For example, live streaming will be more rational, and it is more suitable for low-value FMCG after drying and moisture. Marketing methods such as community marketing, membership marketing, and service to home will be more attractive.

　　 Seven. From the perspective of assets, the value of some poorly managed small and medium-sized assets will shrink significantly. Small and medium-sized retail entities that are not large-scale, have poor risk resistance, and have no innovation channels will close down or transfer, and this is the best time to buy bottoms.

　　 Concluding remarks: Pain makes thinking about change

The setting of the internal circular economy policy will be a long-term project, especially the continuous deepening of the supply-side reform, optimizing the industrial structure, and improving the technological level of China’s manufacturing, which will have far-reaching implications for the entire Chinese economy from “large” to “strong”. Meaning.

　　 The retail industry, as the most important "consumption link" in the internal circulation system, will inevitably benefit from the improvement of the overall economic quality and the continuous optimization of the entire environment.

　　 However, from the time frame of this year, the impact of the epidemic may be long-term, and sporadic reports will always cause consumers to be cautious. Therefore, whether it is traditional offline physical retail or online e-commerce giants, thinking about change in pain is the main theme of this year.

　　 The change of model, the change of channels, the change of marketing, and the change of efficiency are the four main directions of thinking change.

　　 There are still four months left in 2020. We seem to still clearly remember the aggressiveness of the epidemic at the beginning of the year. Today, we are already adapting to it, overcoming it, and even taking advantage of it.

　　All the retail people think about changes in pain. Let's continue to sprint for 2020.