24 Feb 2014
2014 Chinese New Year sales: Qingdao
|Qingdao’s bustling Chinese New Year goods market.|
HKTDC's mainland offices, namely in Beijing, Dalian, Qingdao, Xi'an, Shanghai, Hangzhou, Nanjing, Wuhan, Chongqing, Chengdu, Guangzhou, Fuzhou and Shenzhen, made market visits to high-end, mid-high end and mid-range shopping centres in their cities a week after the Chinese New Year to find out how holiday sales have fared this year.
Overall sales in Qingdao have posted moderate increase during the Chinese New Year period.
New Year goods have sold well. In particular, food and gift items exchanged among friends and relatives started flying off the shelves before the Chinese New Year and this continued to the holidays after the New Year. Sales of clothing, shoes and cosmetics saw slight declines over the same period last year, while sales of jewellery and children’s products rose moderately. Sales of sports goods, electronic products, household items, watches and bags essentially levelled with the same period last year.
A snowfall from 6 to 7 February dampened overall sales growth. Beginning the afternoon of 6 February, Qingdao received a mid-size snowfall only seen once every few years. Many people who originally planned to go shopping in malls switched to the parks or seaside to watch the snow scene. This, coupled with the traffic hassle caused by the snow, has to some extent stalled continual growth in sales turnover.
Leisure and entertainment venues such as cinemas and dessert houses were packed solid. As the sales of clothing, home appliance, etc in shopping malls are affected by e-tailing to one extent or another, shopping malls are trying to reinvent themselves by playing out their strengths while mitigating their weaknesses. Large shopping malls that have been regarding department stores and supermarkets as their absolute linchpins have now added such elements as trendiness, leisure and social gathering spending. After doing so, they have become not just shopping venues but are places to go for leisure, entertainment, fitness keeping, dining and social gatherings. It is likely in the near future that, thanks to new technology large brand enterprises will be offering new customer experiences. For example, carrying a mobile phone into a shopping mall, one can place orders with shops while fiddling with the phone and chatting with friends all along. As the goods are being delivered to one’s home, one may already be attending a training course or swimming in a pool.
The following is the sales situation of four leading stores:
|Gra||High-end||Mid-range||Mid- to low-end||Mid- to low-end|
|Top-selling items||Clothing, cosmetics, jewellery||Food (especially imported fruits), gifts, toys, electronic products||Food, gifts||Food (nuts, fruits, etc), household products, jewellery|
Shopping mall: Rmb500-500,000
Shopping mall: Rmb100-10,000
Shopping mall: Rmb100-10,000
Shopping mall: Rmb100-10,000
|Average spending per customer|
|Year-on-year sales growth||3%||4%||2%||3%|
|Promotion tactics||1. New promotion tactics were used: less price discount promotions but more loyalty based activities during festivals and public holidays such as members’ day and shop anniversary promotions.|
2. The warm winter and early arrival of spring this year had brought forward end-of-season discounts for autumn and winter clothing. Out-of-season products of some brands were discounted by up to 50%.
|1. No store-wide promotion. Imported fruits and gift sets in the supermarket sold well. With sales of clothing and accessories turning sluggish after the New Year, discounts were offered.|
2. In the shopping mall, catering facilities like coffee shops, fast food shops, the food court, the Japanese restaurant and the Korean restaurant were teeming with customers coming in groups, adding to the customer traffic in the mall.
|1. Wide variety of traditional promotion tactics including shopping coupons, defined amount discounts and lucky draws, followed by out-of-season discounts for different brands.|
2. The place with the heaviest customer traffic is the annual New Year Goods Bazaar. Long queues of New Year goods and gifts customers were commonplace at cashiers.
|1. New Year Goods Street was highly popular during period before and after the Chinese New Year.|
2. To attract customers to the mall, a cash rebate of Rmb50 for every purchase of Rmb100 or more was offered. But sales of cosmetics and clothing were still lowered than last year.
3. Sales of shopping cards were at the same level as last year; denomination of each card ranged from Rmb100 to Rmb1,000.
|Sales highlights||1. Newly introduced are casual luxury lifestyle brands from Europe and North America such as MCM (the brand of the backpack carried by actor Tian Liang in the Chinese reality parenting TV show Where Are We Going, Dad?). Outstanding design and craftsmanship of these brands have successfully wooed Chinese customers who prefer them to top-line luxury brands due to the latter’s sense of heaviness and compulsion.|
2. More customers are buying for their own use. Their choice of merchandise is more diversified and personalised as fewer of them are crowd followers these days.
|1. Sales were brisk at Apple Store. Phones and laptops have sold well.|
2. Customers were queuing up at Uncle Tetsu, a cake shop opened for business just before the New Year.
|Liqun’s online shopping site has been improving and, compared to the same period last year, turnover was up by 10-20% and the main type of goods driving the growth is fast moving consumer goods such as food.||Among all Likelai stores, sales turnover at the Licun (Li Village) store was highest. In recent years, many real estate developments have found their way into Licun while several shopping mall chains are setting up shop there. Adding the fact that a large number of potential shoppers have already been drawn by existing commercial districts and marketplaces, Licun is turning into one of the most important commercial districts in Qingdao.|
Three successful cases
1. Hisense Plaza
Hong Kong-style café DimDimSum
Customers to Hisense Plaza would have no difficulty finding a specialty Hong Kong-style café just off the escalator at basement level one. The area of this open-plan café is not exactly large, but its comfy environment is an inviting place for shoppers to rest their feet or chat with their friends. During the Chinese New Year holidays in particular, attendance was much higher than usual and many customers were accompanied by elders and children. The jolly festive mood emanated from the café was better than that of clothing and accessory shops which were more or less deserted after the festival.
When we came to the café on the last day of the holidays, an enthusiastic manager told us they specialise in Hong Kong-style tea snacks. They boast 30 odd types of dim sum including shrimp dumplings, phoenix talons (chicken feet) and barbecued pork buns. For spit-roasted meat (siu mei) they have choice items like roasted goose Sham Tseng style and honey-stewed barbecue pork. On top of these, they also offer gourmet food such as Hong Kong-style congees, shrimp wonton noodle, Wanchai fish-ball rice noodle, rice with sparerib and chicken feet as well as traditional Hong Kong-style afternoon tea sets. During the Chinese New Year holidays they also offer from 2 pm to 5 pm a Hong Kong-style afternoon tea set: for Rmb58, one can have a choice of Chinese tea, two choices of dim sum out of six (two pieces per dish). This promotion not only helped boost attendance in the afternoon hours, but also give a chance for more customers to sample authentic Hong Kong food.
Uncle Tetsu Cake Shop
Uncle Tetsu cake shop was opened just before the Chinese New Year but shoppers formed queues to buy throughout the holidays.
While waiting in line, we chatted with a shop assistant and learnt that Uncle Tetsu first started in Kyushu’s Hakata Island in the 1980s. Thanks to its rich taste of cheese with a soft, fluffy texture, Uncle Tetsu’s signature cheesecake has been popular in Japan for more than 20 years. In recent years, Uncle Tetsu has started opening shops abroad. It now has a number of shops in Taiwan and Shanghai and there are always long waiting lines outside these shops.
One reason for the popularity of the cheesecakes is the careful selection of raw ingredients and the fastidious production process that find resonance with the public’s great concerns over health food in recent years. Compared to traditional pastries that use a lot of flavouring and trans-fats, quality food with solid credentials but moderately higher prices is increasingly sought after by consumers. Another reason is the company’s strategy of hunger marketing. Despite strong demand it does not increase production. Rather, it insists on having customers wait for a period of time before they can get the product. It also offers cash rebates to customers who forward the company’s messages to their friends via WeChat.
Chow Tai Fook & L Gold Miracle: outstanding sales
While clothing and accessories sold very well before the Chinese New Year, jewellery counters attracted many consumers who chose to shop leisurely after the New Year. Though it had been predicted that gold prices had yet to hit bottom, the big price fall of gold of late and the festive atmosphere of the New Year still managed to drive gold jewellery sales. At the jewellery section on the first floor of Liqun Commercial Building on Taidong 3rd Road, groups of jolly customers clad in their new clothes crowded in front of the counters to select their favourite styles, with the counters of Chow Tai Fook and L Gold Miracle attracting the most customers.
Chow Tai Fook has always been the best-selling jewellery brand in Liqun because its reasonable prices and the fashionable styles of its wares are well received by young consumers. As people’s incomes are rising and gold prices are dropping instead of rising, many people chose to buy gold, karat gold or coloured gold jewellery for their elders, children or loved ones, or simply to get an auspicious start for themselves at the beginning of a new year. A shop assistant explained that sales during the Chinese New Year holidays were markedly better than the usual days. As far as material is concerned, elders and children invariably prefer gold jewellery, while young people prefer new styles in coloured gold or karat gold.
During the Chinese New Year holidays, L Gold Miracle under the Zhaojin Group offered a line of low-priced gold jewellery at Rmb267 per gram. This has proved a big hit, netting Rmb3 million in sales in the few days after the New Year.
Li Dalei, Qingdao Office