In recent years, new retail has emerged rapidly in China, not only profoundly transforming the traditional retail industry but also reshaping the traditional retail landscape, becoming an important pathway to unleash China's huge consumption potential and shift towards high-quality development. The report of the 19th National Congress of the Communist Party of China proposed that socialism with Chinese characteristics has entered a new era, and the principal contradiction facing Chinese society has transformed into the contradiction between unbalanced and inadequate development and the people's ever-growing needs for a better life. From the perspective of the better life needs of urban and rural residents, on the one hand, the upgrading of consumption structure among urban and rural residents is showing a rapid trend. China is a large developing country and also a major country with rapidly growing market scale. After satisfying material consumption, the demand for service-oriented consumption has increased significantly, with personalized consumption, customized consumption, and distinctive consumption gradually becoming the mainstream of consumption. On the other hand, the traditional large-scale industrial production model, which is directly related to consumption, faces enormous challenges under the trend of consumption structure upgrading. Contradictions such as "demand without supply," "capacity without orders," and "products without brands" are still quite prominent in some areas. Therefore, in the field of consumer goods production, the rapid growth of consumption and the relative lag in supply have become prominent contradictions. In the past few years, relying on the internet and big data, new retail has risen rapidly. This new retail is neither traditional store-based sales nor pure e-commerce sales, but a new business model that seamlessly combines online and offline, directly connecting consumption and production. It has not only revolutionized traditional retail but also revolutionized e-commerce. Over the past few years, new retail has brought five major changes in the sales sector. First, reconstructing the micro-entities of enterprises. Both pure e-commerce and pure stores are undergoing changes, and new types of enterprises that integrate online and offline, such as Intime, Hema Fresh, and Suning, have begun to emerge continuously. Second, reconstructing sales methods, with more emphasis on point-to-point personalized sales. Bombardment-style advertising sales are gradually shifting to more targeted personalized sales based on internet platforms. Estée Lauder's "BA Online" and Casio's smart stores are examples of this exploration. Third, reconstructing consumers' consumption methods. New technologies such as Buy+VR, Catch the Cat, face-scan payment, virtual makeup try-on, virtual fitting, unmanned car vending machines, and unmanned retail bring new experiences to consumers during the shopping process. Fourth, reconstructing production processes, promoting the flexibility of C2B and supply chains, and accelerating the upgrading of traditional industry chains. Some traditional manufacturing enterprises with a keen sense of awareness have begun to achieve customized production based on information fed back by consumers on big data platforms. Some small garment processing enterprises have achieved capacity sharing through "Taobao Factory," exploring a new path to solve the problem of "e-commerce sellers having orders but no factories, and traditional enterprises having capacity but no orders." Fifth, reconstructing and optimizing the internal organization of small and micro enterprises, improving their efficiency. For example, platform enterprises such as Alibaba and Tencent provide strong backend services to a large number of small and micro enterprises through online services, enabling these enterprises to form a pattern of "small front desk, large middle platform, strong backend," which not only reduces cost expenditures but also improves organizational efficiency. This is particularly evident in the increasing number of traditional mom-and-pop stores (i.e., grocery stores) joining this system. From the above five aspects, new retail does not eliminate traditional enterprises but promotes their transformation and upgrading, renewal and renovation, thereby making supply more personalized, more efficient, and better able to meet the needs of urban and rural residents, helping to unleash China's huge consumption potential. This is an important part of China's quality change, dynamic change, and efficiency change, and also an important driving force for shifting towards high-quality development. To seize the trend of China's economic transformation and upgrading, it is necessary to accelerate the development of new retail. This requires forward-looking prediction and research on the relevant policies and systems involved in new retail. For example, how to optimize market supervision in new retail? How to more effectively protect consumer rights? How to ensure the security of new retail systems based on big data? And so on. Solving these problems will bring greater development space for new retail, thereby accelerating China's leap towards high-quality development. Text | Kuang Xianming, Director of the Institute of Economics, China (Hainan) Institute for Reform and Development -END-