Business
Consumer market rebound brings the hustle and bustle back
By Li Xiaoyang  ·  2023-02-06  ·   Source: NO.5-6 FEBRUARY 9, 2023
A bustling commercial street in Jiuzhou, an ancient town in Huangping County, Guizhou Province, on January 26 (XINHUA)

Lisa Cao, a 20-something office worker in Beijing, enjoyed a special Spring Festival holiday this year. She traveled to Laos during the weeklong break, which ran from January 21 to 27, after spending the festival, formally known as Chinese New Year, in China for the past two years. "After outbound travel resumed earlier this year, I was so excited that I decided to go abroad as soon as I could," Cao told Beijing Review.

This is the first Spring Festival holiday since China optimized its COVID-19 response policies last December and removed all quarantine requirements for inbound passengers on January 8. Group travel from China to designated countries also resumed on February 6.

As an avid traveler, Cao visited domestic and overseas destinations during holidays before the pandemic. She returned to China from a trip to Poland in early 2020, when COVID-19 started spreading, and did not travel overseas again until her visit to Laos this year. She spent about 10,000 yuan ($1,482) on this trip, and felt it was worthwhile. She plans to travel to more countries this year.

Out for outings 

Like Cao, many people traveled overseas as soon as COVID-related travel restrictions were lifted. According to travel platform Ctrip.com, overseas bookings jumped 640 percent year on year during the Spring Festival holiday. Destinations in Southeast Asia including Bangkok, Singapore and Kuala Lumpur were the most popular among Chinese tourists.

Popular domestic travel destinations also saw large visitor numbers over the holiday. About 308 million trips were made in China in the period, up 23.1 percent year on year, according to the Ministry of Culture and Tourism. Domestic tourism revenue reached 375.84 billion yuan ($55.4 billion), gaining 30 percent year on year.

Sales revenue of travel agencies and tourism services during the holiday surged 130 percent from 2022, recovering to 80.7 percent of the figure from 2019, data from the State Taxation Administration (STA) showed. Sales revenue of hotel chains increased 30.6 percent from the corresponding period of 2022.

Dali Bai Autonomous Prefecture in the southwestern province of Yunnan attracted tourists with its warm weather, abundant sightseeing spots and distinctive cultures of minority ethnic groups. According to official sources, the prefecture saw around 4.23 million tourists during the festival this year, surging 219 percent year on year. Total tourism revenue exceeded 3 billion yuan ($440 million), representing a 162-percent year-on-year growth.

The tropical island province of Hainan was another top destination. According to estimates by local tourism authorities, Hainan received more than 1.61 million tourists during the seven-day holiday, up 25.98 percent year on year. Sales in its 12 offshore duty-free stores totaled 1.56 billion yuan ($231 million) in the period, up 5.88 percent from the festival last year.

Winter sport resorts across China also embraced visitors. In Xinjiang Uygur Autonomous Region, the top skiing resorts received over 120,000 people during the festival, up 5 percent from the corresponding period last year. Tourism revenue reached 19.96 million yuan ($2.95 million), up 80.16 percent from 2022, local tourism authorities said. 

According to Pan Helin, Co-Director of the Digital Economy and Financial Innovation Research Center at Zhejiang University's International Business School, tourism is expected to further rebound in the second half of this year. The National Day holiday on October 1-7 will be a peak period. "While demand is recovering, the capacity and services of tourist sites need to be improved," Pan told Beijing Review.

A molten iron firework performance in celebration of the Spring Festival in Jieyang, Guangdong Province, on January 26 (XINHUA)

Shopping festival 

For Chinese people, buying goodies including food and beverages, new clothing, auspicious decorations and gifts before the Chinese New Year has long been a custom. Consumption of daily necessities continued to grow during the festival this year. According to the STA, sales of basic commodities such as grain, cooking oil and food increased 31.5 percent from the corresponding period in 2022. As people's purchasing power improves, their expenditure on gold accessories went up during the festival. 

Online shopping added to the festive joy. Data from the State Post Bureau showed that more than 700 million parcels were collected and delivered from January 21 to 27. The number of delivered parcels went up 10 percent year on year to 330 million in the period, a 254.8-percent increase compared with 2019.

Global products reached Chinese consumers through resuming logistics. According to the customs authorities at Pudong Airport in Shanghai, around 2,000 tons of imported fresh seafood had entered the Chinese market by air since January this year, up 14 percent year on year.

Sales revenue of consumption-related sectors was 12.2 percent higher than that corresponding period of 2022, the STA said.

Spring Festival decorations and Chinese-style performances were seen in cities around the world and consumers overseas also embraced Chinese New Year products. According to AliExpress, a Chinese international e-commerce platform, users from more than 200 countries and regions searched for key words like "Chinese New Year" and "Rabbit Year" on the platform before the Spring Festival this year. Festive decorations saw a 560-percent year-on-year growth of sales on the platform in December 2022. Sales of other made-in-China products like winter sport equipment to other countries also went up.

Tourists spend their holiday at the Xinjiang Silk Road International Ski Resort in Xinjiang Uygur Autonomous Region on January 25 (XINHUA)

Cultural appeal 

During the festival, cinemas nationwide sold 129 million tickets, generating gross revenue of 6.76 billion yuan ($1 billion), the second highest for the Spring Festival holiday to date.

Traditional festive events were also back this year for celebration. People visited fairs to stock up on items for the new year, viewed lantern displays, and enjoyed folk performances. The molten iron firework performance, or datiehua in Chinese, is a form of national intangible cultural heritage. Performers presented the splendid molten iron firework show at night in many regions as part of celebrations for the festival.

The 2023 Spring Festival ushered in the Year of the Rabbit in the Chinese Zodiac. Rabbit-themed products were bestsellers during the holiday. Ceramic figurines of Tu'er Ye, also known as the Rabbit Master, Rabbit God, Grandpa Rabbit or Lord Leveret, are a form of intangible cultural heritage in Beijing. Local people believe it can bring happiness and good luck, as well as ward off illness. As rabbits are the star of this year, many people went to buy completed Tu'er Ye figurines or to buy plain white ones to paint themselves at shops during the Spring Festival.

Zhang Zhongqiang, a 60-year-old inheritor of Beijing's painted clay sculpture art, has been making Tu'er Ye figurines for more than three decades. In addition to traditional versions, he has also produced innovative ones, such as those themed on the Beijing Central Axis and aerospace exploration.

Now Zhang runs two stores selling his products. "During the holiday, one of them sold around 800 Tu'er Ye figurines. Nearly 40 people made reservations to paint their figurines at the store, including many visitors from other countries," Zhang told Beijing Review.

WenTongZi, a homegrown art toy brand based in Hangzhou, Zhejiang Province, also attracted many consumers. According to its founder Shen Ze, it first introduced the Striver Rabbit series in 2016, featuring a frowning rabbit with rolled-up sleeves. It symbolizes the character of overcoming headwinds with firm determination.

In recent years, young Chinese consumers have been increasingly embracing homegrown brands and seeking more diverse and personalized products in recent years. That has brought opportunities for art toy brands like WenTongZi. Its products are sold on online platforms including Tmall, an e-commerce platform owned by tech company Alibaba, Shen told Beijing Review.

"We introduced a new rabbit toy exclusively for this Spring Festival. Our pre-holiday daily sales soared 300 percent from usual levels," Shen said.

Shoppers select rabbit-shaped lanterns at a fair in Nanjing, Jiangsu Province, on January 22 (XINHUA)

Great potential 

The consumer market rebound during the Spring Festival was indicative of China's economic recovery. As global financial institution Goldman Sachs projected in a report in late 2022, consumption will likely be the bright spot of economic growth in 2023. "Chinese exports are poised to slow on weakening external demands, while growth drivers rotate from investment to consumption on reopening. Within consumption, sectors that have been most constrained by COVID-19, such as travel and entertainment, have the most room to recover," the report read. It expected China's consumption to rebound strongly in the first half of 2023.

"Over the past year, the pandemic led to consumption growth below expectations. China's total retail sales of consumer goods declined 0.2 percent year on year in 2022. Consumption contributed 32.8 percent of GDP growth last year, decreasing from 65.4 percent in 2021," Wen Bin, chief economist at China Minsheng Bank, told Beijing Review.

Consumption plays a key role in stabilizing economic growth and driving industrial production. To boost its contribution, the authorities need to further improve employment, increase offline consumption opportunities and shore up financial support, according to Wen.

"From a low base, consumption is expected to rebound sharply this year and achieve double-digit growth. It will become a driving force of economic growth again," he said.

(Print Edition Title: A Robust Return) 

Copyedited by G.P. Wilson 

Comments to lixiaoyang@cicgamericas.com 

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