SHANGHAI–Discouraged from traveling home over the week-long Lunar New Year period, many Chinese consumers remained in cities, pushing up holiday shopping and dining by 28.7 percent compared to a year ago, according to government data. Chinese consumers spent 821 billion renminbi, or $127 billion, from Feb. 11 to Feb. 17, a hefty increase from 2020 but still below the amount in 2019, which was over 1 trillion renminbi.
In the weeks leading up to the holiday, China witnessed several cluster outbreaks of COVID-19, particularly in the northern provinces. Although the country did not outright ban travel, it implemented COVID-19 test requirements that would’ve convinced many people to stay put. That meant shops that would have usually shuttered remained open for business and consumers stuck around too, transferring their spend on travel to retail and food.
Daily traffic at malls in 10 first- and second-tier cities increased by more than 200 percent year over year, reaching 86 percent of 2019 levels. Jewelry in particular increased by 161 percent, likely due to this year’s holiday overlapping with Valentine’s Day, while clothing rose 107 percent, home gym equipment 49 percent, electronics 39 percent, and digital home appliances 30 percent. The number of parcels sent during the week totaled 660 million, up 260 percent from the year before.
“These numbers tell us that Chinese consumers are willing to spend on unnecessary items like digital equipment and are becoming increasingly health-conscious,” said ING’s greater China economist Iris Pang. “Also, that COVID-19 hasn’t hurt spending during this holiday period, which should imply job stability and expectations of wage growth in 2021.”
Catering sales went up 1.3 times compared to the previous year. “This is because people usually have meals at home during the holiday period but this year is different because more than half of the working population stayed in cities, where they tend to work rather than travel to their home towns in rural areas,” said Pang. “Mostly, these are young and middle-age groups, who are more willing to spend at restaurants than the elderly population.”
Source: Read Full Article