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2013 Chinese New Year sales: Shanghai

 Photo: Spring Festival decorations at a shopping mall in Shanghai. (Courtesy of Xinhua News Agency)
 Spring Festival decorations at a shopping mall in Shanghai. (Photo courtesy of Xinhua News Agency)
HKTDC's 11 mainland offices, namely in Beijing, Dalian, Qingdao, Xian, Shanghai, Hangzhou, Wuhan, Chengdu, Guangzhou, Fuzhou and Shenzhen, conducted market surveys on high-end, mid-high end and mid-range shopping centres in their cities a week after the Chinese New Year to find out about their festival sales.

The following are the survey findings on sales in Shanghai:

1.  Overall market situation

The Spring Festival market was brisk in Shanghai in 2013, with sales going up by 10.2%. Good weather encouraged people to go out to spend. The coincidence of Valentine's Day and the Spring Festival and the fact that many department stores and supermarkets have taken their seasonal sales right up to the sixth day of the new year have spurred sales of goods and consumption of services during the Spring Festival of the Year of the Snake.

According to a joint sample survey conducted by the commerce committees of 17 districts and counties and six commercial establishments, 466 large and medium-sized commercial enterprises in the city recorded a total turnover of Rmb5.549 billion during the seven-day Spring Festival holidays (between Chinese New Year's eve and the sixth day of the lunar new year, 9-15 February), up 10.2% year-on-year. During this period, sales reached its peak on New Year's Eve with a turnover of Rmb905 million.

2. Major characteristics

Supermarket did well selling Chinese New Year goods. The 119 supermarkets surveyed recorded a retail turnover of Rmb2.226 billion, up 2.8% year-on-year. Among them, the turnovers of hypermarkets, supermarkets and convenience stores were up by 6.1%, 1% and 0.5% respectively.

Department stores with strong brand portfolio. The 109 retail enterprises of general merchandise surveyed recorded a sales volume of Rmb2.182 billion, up 13.9% year-on-year. Of these, shopping malls and department stores achieved increases of 24% and 7.5% respectively.

Specialty stores saw significant rise in sales. The 105 enterprises surveyed recorded a retail volume of Rmb788 million, up 23.1% year-on-year. Of these, jewellery and food stores achieved increases of 27.1% and 24.2% respectively. The main branches of Laofengxiang and Laomiao, two leading jewellery shops in Shanghai, recorded Rmb168 million and Rmb115 million in sales during the Spring Festival holidays, up 21% and 25.1% respectively. Sales at shops selling building materials, garments and books also rose by 13.3%, 5.5% and 4.2% respectively. Since the expiry of the policy of subsidised trade-ins for home electrical appliances at the end of 2011, appliance sales plummeted last year. With the arrival of a new round of consumer demand for weddings and replacement, appliance sales soared during the Spring Festival holidays this year, with sales volume rising by 24% year-on-year.

Gift and premium consumption potential unleashed; brisk sales of gold jewellery, children's goods and digital products. Many jewellery shops promoted sales by offering discounts on products or processing fees. First Asia, Laomiao and many other jewellery shops registered increases of over 25% in sales. Sales of investment gold bars achieved a twofold increase over the Spring Festival last year. Laofengxiang spared no efforts to launch new products while boosting sales. Sales of the "Double Happiness Gold Bar" designed by Chinese arts and craft master Zhang Jingyang soared thanks to Valentine's Day. Compared with the same period of last year, Laofengxiang achieved increases of over 20% for all products, with sales of gold jewellery soaring by more than 30%. Falling international gold price was one of the factors that triggered the hot sales of gold bars. International gold price saw an obvious dip as the dollar continued its shock strength during the Spring Festival holidays. Baodaxiang, Toys "R" Us and other shops for children’s goods also launched all kinds of celebration activities, which helped to boost sales by 10.6%. Electronic products like digital cameras, mobile phones and tablet computers and single-lens reflex cameras became the "new favourites" for Chinese New Year goods.

TV and online sales doing well. The retail turnover of the six surveyed enterprises reached Rmb167 million, up 33.5% year-on-year, with growth rate ranking first among the six major business modes. Suning ebuy, Oriental TV Shopping, blemall.com (of Bailian) and 360buy registered sales growth of 88.1%, 36.8%, 22.1% and 19.8% respectively.

In spite of the fact that many online stores were only able to accept orders but unable to make deliveries because courier service providers basically suspended operations, Taobao.com and Tmall.com still managed to double their turnover during the Spring Festival holidays. According to Taobao.com, total turnover at Taobao.com and Tmall.com during the week-long holidays was 97.2% higher than that of the Spring Festival last year and the number of shoppers also soared by 96.6%. Thanks to Valentine's Day demand, sales of flowers registered an increase of 10 times year-on-year, with per-capita spending rising to Rmb200 from Rmb175 last year. Compared with physical gifts like garments, shoes, hats and flowers, sales of virtual commodities like e-tickets were less affected by courier service and therefore did particularly well during the long holidays. During the Spring Festival holidays this year, sales of admission tickets for tourist attractions doubled over the same period of last year both in terms of number of buyers and transaction amount.

Bailian Group maintained lead in sales. The six commercial group companies in the city achieved a combined turnover of Rmb2.302 billion, up 2.8% year-on-year. Among them, the Bailian Group reported a sales volume of Rmb1.745 billion, up 5.6% year-on-year and accounting for 75.8% of the group's total business turnover and 31.4% of the city's festival sales, making the group the market leader in festival sales. The Shanghai Tobacco, Sugar & Wine Group of the Bright Food Group also achieved a year-on-year increase of 22.5%.

Wide choice of marketing options. Department stores mainly relied on discounts and seasonal sales in sales promotions. New World City offered a rebate of Rmb100 for purchases of up to Rmb188, Shanghai Landmark Department Store offered a rebate of Rmb100 for purchases of up to Rmb199, while Pacific Department Store offered a rebate of Rmb100 for purchases of up to Rmb198. Department stores also stepped up their micro-blog marketing, with companies in the central business districts launching all kinds of micro-blog marketing gimmicks during the holiday season. This resulted in a regional micro-blog marketing boom. Some home appliance, garment and food enterprises promoted their products on their company micro-blog pages by offering red packets to micro-bloggers who help repost their messages. Metro Town in Changning district established a micro-blog marketing platform during the Spring Festival to help its tenants promote themselves. Among the micro-blog marketing gimmicks are film tickets + strawberry farm visit and delivery of books to your doorsteps for reposting micro-blog messages.

HKTDC Shanghai Office

Content provided by Picture: HKTDC Research
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