China’s Shopping Spree ahead of Spring Festival Shows Its Great Consumption Power

Here comes the first shopping carnival for 2019, the Chinese Lunar New Year, which falls on February 5.

This year, the Chinese consumers are spending more on higher quality goods and services for the upcoming one-week festival. This sheds light on the strong domestic consumption, which guarantees a robust impetus to the economy against global downturns.

Chen Nan, a 29-year-old Beijing white-collar worker, told that he had allocated a budget of more than 10,000 yuan ($1482.62), which is about half of his monthly salary, for Spring Festival purchases. “Besides buying traditional decorations for the Lunar New Year, I’m now spending more on imported foods compared with last year. You can see cherries from Chile, lobster from Boston and wines from France showing up on my holiday dining table. I’m not price-conscious, but rather care more about the quality,” he said.

credit: Internet

Behind Chen is the rapidly-rising consumption power of China’s middle class, who are keen to consume high-quality and imported goods and have been driving a shift in the spending habits for the Spring Festival in recent years. The shift is also in line with the Chinese policymakers’ stimulus measures to encourage imports and boost consumption.

High-quality demands 

To cater to the demands for high-quality goods, a note sent from a big supermarket said that they have imported 40 percent more merchandise from abroad including fruits, wines and drinks ahead of the Spring Festival compared with the year of 2018. As demands for imported wines surged this year, the supermarket has cooperated with more than 120 wine producers in about 11 countries and regions, putting wines from around the world on the shelves for sale.

And a report sent to the Global Times showed that the online sales of “expensive” tropical cherries are even with “affordable homegrown” sweet oranges, providing a vivid example of how Chinese consumers are becoming “less price sensitive” and rather “paying attention on quality, freshness and nutrition over price.” Notably, the quest for high-quality foods is also surging in smaller cities. Wang Cuixi, a PR spokesperson of an online shopping website, told the Global Times that spending on cherries in Southwest China’s Chongqing Municipality and Chengdu, have for the first time outpaced that of Guangzhou and jumped into the top five cities in terms of spending power.

Younger consumer

This year, the spending by young people born after 1990 accounted for 10 percent of the total spending for Spring Festival goods, with the amount recording a 37 percent year-on-year growth. A report released by a data analytics company also showed that the post 90s generation’s willingness to spend stood at 63 points in the fourth quarter of 2018. The younger generation is avid consumers of technologies, not only smartphones but also to other personal digital electronics such as intelligent sweeping robots and intelligent full-screen televisions. Data from another company showed that sales of small household electrical appliances such as coffee-makers and ovens as well as intelligent home appliances such as sweeping robots have seen “big jumps”.

credit: Internet

The rising middle-class, combined with the growing younger generation, is also lifting the sales of travel packages during the Lunar New Year holiday, a new concept that is different from the traditional subjects of family reunion and returning home during the festival. A famous online travel agency said in a note that the booking of customized travel packages has doubled ahead of the upcoming Spring Festival, with outbound trips to overseas destinations such as Thailand, Japan, Indonesia and Singapore increasingly becoming popular. Another online travel agency also said that the bookings for outbound trips for the Spring Festival rose 30 percent year-on-year, while spending has also increased 10 percent year-on-year, so far.

Boost in consumption

Commenting on the spending pattern, Zhao Ping, director of the department of international trade research at the China Council for the Promotion of International Trade, told that Chinese consumers are “eating healthier, buying in a higher quality way and paying attention to cutting-edged tech products” thanks to a rise in personal incomes. Industry insiders forecast that as Chinese residents are embarking on a new shopping spree, they are going to spend more during the holiday period compared with last year. Zhao predicted that the spending for the holiday could “grow steadily” at around 9 percent to exceed 1 trillion yuan this year.

The strong upswing bodes well for the Chinese economy, as Chinese policymakers have been scaling up efforts to boost consumption to make China less dependent on foreign trade amid rising global protectionism. “The spending before and during the Spring Festival, which marks the first consumption carnival this year, is a barometer for the whole-year consumption power,” Zhao said. “As the spending ahead of the holiday reflects, innovation, services and high-quality will be the highlights of the domestic consumption in 2019.” Industry insiders forecast that consumption is going to play a more pivotal role in driving China’s high-quality economic growth in 2019.

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