17 March 2016
2016 Chinese New Year Sales: Chengdu
Many of Chengdu’s major retail outlets saw sales soar throughout the 2016 Spring Festival period, with clothing, bags, jewellery and electronic products all doing particularly well. The catering sector also enjoyed brisk business, with long queues at eateries and a high level of pre-bookings for banquet organisers.
Figures from the Ministry of Commerce show that, from New Year's Eve to the sixth day of the Chinese New Year (7-13 February 2016), the total takings of retail and catering enterprises nationwide was more than Rmb754 billion, up 11.2% over the Spring Festival golden week last year. While a number of new sectors achieved impressive results, traditional New Year’s goods; mass market dining; cultural, sporting and entertainment activities; tourism and leisure activities also fared well throughout the festive spending period.
Staff at the HKTDC's mainland offices (Beijing, Dalian, Qingdao, Xi’an, Shanghai, Hangzhou, Nanjing, Wuhan, Chongqing, Chengdu, Guangzhou, Fuzhou and Shenzhen) made visits to a number of high-end, mid-high end and mid-range shopping centres in their respective cities before, during and after the Chinese New Year in order to ascertain just how the consumer market performed this year.
During the three day run-up to the Spring Festival, Chengdu’s catering sector was booming. Across the Sichuan province, the growth in catering revenue was mainly driven by wedding banquets, birthday feasts and New Year’s Eve dining. In total, the turnover of 15 of Chengdu’s key restaurants - including Hongxin, Honggaoliang and Daronghe - was recorded at Rmb11.319 million, a 6.9% increase over the previous year. The restaurants in many shopping complexes were also full, with customers of one particular Hong Kong-style tea restaurant in Sino-Ocean Taikoo Li arriving to queue up for dinner from 5pm. Although an extra 10% service charge was levied throughout the Spring Festival period, this did not seem to deter diners.
Many retail stores reported sales growth compared to the same period last year, a finding seemingly at odds with the current overall bleak economic outlook. Looking more specifically at two of Chengdu’s longer-established stores – the Renhe Spring Department Store and the Wangfujing Department Store - both enjoyed brisk trade, with buyer traffic and sales at the two stores showing a slight rise during this year’s Spring Festival period compared to 2015. Overall consumption was also boosted by Valentine's Day and the Spring Festival coinciding this year.
According to staff at the Wangfujing Department Store, sales were more or less the same as last year for the first few days of the 2016 Spring Festival, but soared during the last two days, with cosmetics, jewellery, clocks and watches proving the most popular buys. Valentine's Day gifts accounted for a large proportion of sales, according to the shopping malls own analysis. In the case of the Wangfujing Shopping Centre, its staff attributed its strong sales to the store’s extensive product range, something that inevitably attracted customers making gift purchases in the holiday period.
Over at Renhe Spring and its various New Year sales promotions attracted a large number of customers from the surrounding communities, as well as many from nearby second-tier cities and from other provinces who were staying in Chengdu for Chinese New Year. By contrast with last year, the number of family customers increased significantly, as did the level of customers shopping for personal consumption, perhaps explaining the strong sales of both men’s and women’s clothing.
For Ito-Yokado, while it has always been a popular mall, its sales performance was further boosted by an increase in the number of customers seeking convenience, comfort and international touches compared to last year. On New Year's Eve, Ito’s homemade sushi, salmon, vegetables series and semi-finished products were particularly in demand, with sushi sales netting almost Rmb700,000. New Year clothing accessories - in traditional red with gold zodiac ornaments - also fared well.
Every year, Ito pushes New Year gift ideas. For 2016, in addition to traditional gift items, the gifts of choice were intelligent small appliances, including robot brooms, robot window cleaners, multifunction mixers and Japanese beauty products.
Slightly out of the city centre and MixC (in the east) and Lotte Shopping (in the south) both reported significant sales growth. During the seven days of the festival, sales at MixC exceeded Rmb50 million, an increase of 15% over last year, with accessories, entertainment and children's products accounting for the majority of the growth. The immensely popular temple fairs held in MixC during the Spring Festival also served to attract visitors.
The Lotte Department Store, meanwhile, reported a 20% year-on-year growth in sales. Genuine, down-to-earth benefits were said to be the important factors in attracting consumption. As a landmark in the south of the city, the Global Centre – Lotte’s home mall - has become a must-visit retail destination for overseas visitors, another factor in the store’s success this year.
In addition, several newly opened malls, including Chengdu Joy City, reported accelerated sales growth throughout the Spring Festival. The best performing sectors were catering and retailing. These were largely supported by family customers, who accounted for about 70% of the total. There were also a substantial number of customers from neighbouring second-tier cities. In addition to the promotional activities organised by the malls, sales were also driven by the fact that many of the shops provided rich experiential consumption, as well as venues for family meals and for friends to gather.
Despite these relatively buoyant sales, the city’s retail sector still faces challenging times ahead. After making losses for three consecutive years, the Mall Business (Mo’er Department Store) officially closed in February 2016. With a prime location in Tianfu Square, it was the first Chengdu shopping mall to close in 2016, following a spate of closures in 2015.
Over recent years, a number of Chengdu department stores have ceased trading – the Central Department Store in MixC, Rainbow Department Store in Hongpailou, the Renmin Department Store in Qingjiang Road, the Mall Business in Yangxi, and the Pacific Department Store. As well as the impact of the currently negative economic environment, increased competition from a number of newly completed commercial complexes has also resulted in difficult trading conditions for many of the major shopping centres and malls within Chengdu’s commercial district.
Eve Hou, Chengdu Office