Holiday consumption is always a barometer of the nation’s whole-year retail spending. What Chinese consumers are looking for? Online purchase, imported goods and quality certification
This year, the Chinese consumers, with an ever-expanding middle-class population of around 400 million, spent more on higher quality goods and services for the passed away Spring Festival.
In first tier cities such as Beijing or Shanghai, white-collar workers had allocated a budget of more than 10,000 yuan (around $1480), which is about half of monthly salary, for Spring Festival purchases. According to data, last year the average was around 6,000 yuan to purchase goods for the Spring Festival.
Besides buying traditional decorations for the Lunar New Year, consumers are now spending more on imported foods compared with last year. Today on supermarkets can see cherries from Chile, lobster from Boston and wines from France or South Africa showing up on people’s holiday dining table. Actually, Chinese consumers are not price-conscious, but rather care more about the quality.
Thus, 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.
What was on the menu for Chinese New Year? Top sales for Australian meat, Japanese and Ecuadorian shrimps and Chile cherries
In Juhuasuan, a group-buying website under Alibaba Group, Chinese consumers have bought 1.98 million Australian steaks, 105,000 kilograms of Chilean cherries, and 90,000 kilograms of Ecuadorian seafood from January 17.
This year, sales of pre-packaged New Year’s food on Tmall have grown over 1,600% compared to 2018. Freshippo, formerly known as Hema, was also offering various pre-cooked dishes for the holiday, making it possible to make a complete dinner in just 30 minutes, even for the large gatherings that are typical of CNY. According to Tmall Fresh, prepared meals for eight to 10 people were the top sellers on the platform.
©Alizila.com. The iconographic shows what exactly people were eating and bought for Chinese New Year.
Social e-commerce platform Pinduoduo also stated that seafood gift packages – including Boston lobster, Pacific saury from Japan’s Hokkaido, and salmon from Chile – are all items that have witnessed “explosive growth” during the platform’s New Year Shopping Festival, and users from third- and lower-tier cities account for around 65% of its total user base.
©JD.com. JDDJ.com homepage. JD.com delivery food app lead consumes in lower tier cities.
Fruit sales in JDDJ.com – 京东到家 a food delivery platform under e-commerce giant JD.com – has also registered a similar trend. The company stated that the online sales of tropical cherries and oranges provided a vivid example of how Chinese consumers are becoming “less price sensitive” and rather “paying attention on quality, freshness and nutrition over price.”
Other than cherries and oranges, the remaining two of the top four popular fruits sold at JDDJ.com are kiwi fruit and blueberries from Australia, which have an average price of 50 yuan per kilogram and 110 yuan per kilogram respectively.
Notably, the quest for high-quality foods is also surging in smaller cities and lower tier cities.
In the not-so-distant future, more than half of the rich Chinese will be in cities we’ve never heard of, that’s why is important to understand which are the raising markets.
Wang Cuixi, a PR spokesperson of JDDJ.com, told to Chinese media that spending on cherries in Southwest China’s Chongqing Municipality and Chengdu have for the first time outpaced Guangzhou and jumped into the top five cities in terms of spending power.
©人民网，Chengdu. Sichuan Capital city is today hi-tech center and is China’s third capital of luxury.
In the city of Yiwu, East China’s Zhejiang Province, an imported goods fair opened recently to attract Chinese New Year shoppers. There are more than 90,000 types of goods from over 100 countries and regions, which were brought into China either by China-Europe trains or cross-border e-commerce platforms.
According to the International Trade Center of Yiwu, where the fair is located, foreign snacks, red wine and kitchenware are the most popular commodities. The annual fair expects to see double-digit growth in the sales of food and wine.
Millennials are driving consumers, but the tendency to use e-commerce to shop for Chinese New Year is across all age demographics, not only the tech-savvy post 90’s.
This year, the spending by young people born after 1990 accounted for 10% of the total spending for Spring Festival goods at JDDJ.com, with the amount recording a 37% year-on-year growth.
A report released by data analytics company Nielsen also showed that the post 90s generation willingness to spend stood at 63 points in the fourth quarter of 2018, higher than the 60 points of those born in 1980s and 54 points of those born in 1970s.
©Unsplash. For the millennial or even generation Z, the convenient e-commerce platform shopping experience is even more attractive than offline store shopping and it saves time.
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. But the tendency to use e-commerce to shop for Chinese New Year is across all age demographics, not only the tech-savvy Millennials. The number of users over 50 grew 172% since last year, Tmall reported.
The rising middle-class, combined with the growing younger generation, is also lifting the sales of travel packages during the Lunar New Year holiday.
This year, a new concept of holiday that is different from the traditional family reunion and returning home during the festival was arising too. According to Ctrip, 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.
©Ctrip, Japan and South-east Asia are top Chinese tourist destinations.
Lvmama, an online travel agency app, also stated 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. It is estimated that tourists will make more than 400 million trips during this year’s holiday, compared with last year’s 386 million trips, according to a report by Ctrip.
Boost in consumption, according to data this trend will continue in 2019 too.What Chinese consumers are looking for? Online purchase, imported goods and quality certification.
With a greater variety of imported foods flooding into China, the Chinese New Year is now beginning to taste more exotic than ever. Liu Miao, a white-collar worker in Shanghai, said her childhood memories of New Year eats consist of fried pork, rice cakes, dried fruits and candy. But now, Chinese New Year feasts have become much more elaborate with shrimp from South America, fresh fruit from Southeast Asia and nuts from the US.
©Cifnews雨果网, Qingdao harbour, Shandong, one of the PRC’s most important port. 75% of imported goods in supermarket located in North of China are from Qingdao.
“I buy imported food from supermarkets and online,” she said, adding that her parents are learning about how to buy foreign products from e-commerce platforms. According to Zhao Ping, Director of the department for international trade research at the China Council for the Promotion of International Trade, 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.