China's 'Rent, Not Buy' Trend: A New Economic Perspective

A trend of renting rather than buying is gaining traction in China as cautious consumers boost the economy with a 'rent, not buy' model. Despite slowed retail growth, new demand forms show potential, calling for consumer-focused policies to spur domestic spending.

In a shift that highlights changing consumer habits, China is witnessing a rise in the 'rent, not buy' model as cautious consumers opt to rent items like cameras and handbags instead of purchasing them. This trend injects new energy into the economy, offering businesses a fresh perspective, according to the government-run People's Daily.

Facing weakened domestic demand, China's rental market has surged. Internet platforms now allow consumers to rent a drone for just 1 yuan a day, significantly less than the full purchase price of over 5,000 yuan. Similarly, consumers can acquire '99% new' luxury handbags, such as Louis Vuitton, at affordable daily rates through popular apps.

Despite modest retail growth and a challenging real estate market impacting consumer confidence, officials are encouraging policies to stimulate consumer spending. A trade-in scheme offering subsidies has reportedly surpassed 1 trillion yuan in sales, yet much of this consumption remains unreflected in official data.

(With inputs from agencies.)