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A view of Heihe’s highway toll station on Jinlin - Heihe Expressway on February 8, 2025. Photo: VCG

China's northern border city of Heihe, which has a population of over 1.2 million, is buzzing with business activity even in the depth of winter. Locals and visitors alike are flocking to shops that offer an array of domestic and international products.

Heihe's unique location adjacent to Russia has led to the emergence of a vibrant "Russian product street" where fur garments, handicrafts, and specialty foods attract customers looking for a unique international shopping experience. In addition to imports, local grocery stores maintain ample supplies of fresh produce - even in the icy winter months - at prices comparable to or below the national average.

Heihe's evolving retail landscape is catering to China's Generation Z. The rising "goods economy," rooted in ACG culture - meaning animation, comics, and games, has found a solid footing in Heihe. Local stores offer a wide selection of trendy items such as badges, figurines, posters, and keychains, ensuring Heihe keep up with shopping trends seen in major cities like Beijing and Shanghai.

Even amid heavy snowfall, local residents continue to shop actively. The rapid improvement in transportation and logistical infrastructure there has driven Heihe's consumption upgrade to reach a new level, reflecting the broader national trend of increasingly diverse consumer preferences.

Diverse specialty products

In downtown Heihe city, a long line of stores offer a diverse range of international goods brought in through the nearby border crossing. Among them is Aidelin Russian Honey, specializing in a diverse selection of natural Russian honey. "We have over 30 types of honey at our peak," the store owner told the Global Times, noting that the store sells some 150 tons of honey annually.

At "E Pinduo," the largest Russian goods supermarket in the region, the store offers a vast selection beyond typical Russian imports. Spanning 4,800 square meters, the store generated over 77 million yuan ($10.6 million) in revenue in 2024, selling more than 11,000 distinct Russian products.

After recognizing the locals' strong demand for international products, they decided to establish a large-scale, organized retail space, a manager at E Pinduo surnamed Chen, told the Global Times. "We started with 1,500 square meters and kept expanding to offer more diversified Russian merchandise," he said.

Heihe's consumer market has been on a steady upswing, propelled by strong and diverse consumer demand. According to the municipal government, total retail sales of consumer goods reached 11.31 billion yuan from January to November 2024, up 4 percent year-on-year. Online retail saw particularly strong momentum, with sales through public networks surging by 55.1 percent during the same period.

This growth in consumption has played a key role in driving Heihe's economic growth in 2024. Preliminary figures show the city's GDP reached 66.06 billion yuan, rising 4.0 percent year-on-year.

The tertiary sector led the way, with an added value of 29.98 billion yuan, growing 5.3 percent, surpassing the city's overall growth rate.

Heihe is not an exception. Chinese people's rising purchasing power has created higher consumer demand for imported commodities. In June 2024, the National Development and Reform Commission released a set of measures aimed at creating new consumption scenarios and fostering fresh growth points - focusing on categories like food, apparel, housing, and transportation.

Data from the State Administration for Market Regulation show that 2.16 million new consumer goods were introduced in 2024, up 14.1 percent year-on-year. It marks the first time since 2020 that annual additions have exceeded 2 million items, reaching a five-year high.

Keeping pace with national trends

At the 2024 Central Economic Work Conference, the policymakers outlined economic priorities for 2025, emphasizing the importance of strengthening domestic demand and driving consumption growth. It called for fostering innovative consumption models, expanding service-based consumption, and bolstering cultural and tourism sectors.

Heihe's evolving retail scene mirrors the broader consumption shift. On the streets of the city, the "goods economy" favored by young consumers has found its niche.

According to iiMedia Research, the market size of the culture-driven merchandise sales reached 168.9 billion yuan in 2024 in China, an increase of 40.63 percent from a year earlier.

A recent iiMedia Research report noted the younger generations in China prioritize enhancing their quality of life, and maintaining social connections through gift-giving and passion-driven spending. "Goods economy" shops and related anime and gaming products fulfill Gen Z's desire to spend, allowing them to enjoy their interests while strengthening social connections.

In addition to new consumer experiences, many government-backed initiatives have fueled Heihe city's economic vibrancy. According to the municipal government, as of November 2024, the city had held 15 promotional activities and allocated 23 million yuan in incentives going to automobiles, home appliances, fuel, and supermarkets, boosting total consumer spending by 368 million yuan. Meanwhile, consumer goods trade-in programs spurred a further 90 million yuan in sales.

Across China, trade-in programs for consumer goods are gaining impetus. Ministry of Commerce data show that as of February 19, 16.9 million old vehicles had been scrapped and replaced across the country, and more than 26.71 million consumers applied for subsidies while buying new smartphones, tablets, and smartwatches. Some 647,000 electric bicycles were traded in for newer models.

Since the start of 2024, sales of new energy passenger vehicles have surged by more than 20 percent.

Across China, total retail sales of consumer goods reached 48.79 trillion yuan in 2024, marking a 3.5 percent year-on-year increase, according to data from the National Bureau of Statistics (NBS).

Targeted policies aimed at boosting domestic demand have helped sustain steady market growth. And, services consumption continues to surge, public spending on essential goods remains stable, and online shopping is on the rise, reinforcing China's broader consumption upgrade, the NBS noted.

Heihe, once seen as a remote outlying border city, now epitomizes China's new wave of consumer empowerment. Its success - tapping local advantages, embracing diversified market demands, and catering to the younger generation's shopping patterns - illuminates the broader momentum transforming the nation's consumer landscape.