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2016 Chinese New Year Sales: Shenzhen

Throughout the Spring Festival period, many of the major shopping malls in Shenzhen stepped up their marketing and promotional activities, staging a number of events designed to boost customer traffic.

Photo: Global merchandise: CTF HOKO in Shenzhen’s Qianhai district. (Xinhua News Agency)
Global merchandise: CTF HOKO in Shenzhen’s Qianhai district.
Photo: Global merchandise: CTF HOKO in Shenzhen’s Qianhai district. (Xinhua News Agency)
Global merchandise: CTF HOKO in Shenzhen’s Qianhai district.

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.

Though sales recorded at many of the major Shenzhen shopping malls were above the average for a typical day’s trading, they were slightly lower (around 3%) than those for the corresponding period last year. One exception, though, was the MixC shopping mall, which recorded essentially the same sales as last year. For the remainder of the malls, though, this year’s shortfall was said to be attributable to the economic downturn and the stock market slump.

Following a decade of growth, Shenzhen’s retail sector is now seen as relatively mature. Nevertheless, in light of changes in the overall economic situation and in consumer behaviour, the city’s retailers have also had to undergo substantial changes:

1.    There have been adjustments in the way consumer groups are targetted. As the luxury market shows signs of receding, shopping malls are increasingly shifting their focus to families and young consumers.

2.    Judging from the changes taking place in the mature shopping malls, the overall number of clothing retailers is set to decrease. The proportion of retailers that have rethought their offers is highest in the catering and fashion sectors, followed by entertainment, accessories, beauty, personal care, education and children’s products. In terms of brand demand, retailers in the fast fashion, catering, lifestyle, household products, decoration, children’s goods and education sectors are all looking to expand.

3.    Buyer shops – those not necessarily aligned to one particular brand - are increasing steadily while a number of retail brands are experimenting with cross-sector operations. As a result, it is now not unusual to find specialty clothing retailing, art installations and leisure/entertainment facilities all under one roof.

4.    Many major shopping malls are stepping up their marketing and promotional activities. As a result, a number of them now offer occasional themed events as a way to drive traffic, including folk art exhibitions and cartoon showcases.

The following table illustrates consumer spending patterns in a number of Shenzhen shopping locales throughout the CNY holiday:

Shopping mallMixCCoco ParkCTF HOKO
GradeHigh-endMid-rangeMid-range, cross-border e-commerce, O2O
Top-selling items/servicesDining, high-end fashion, handbagsDining, clothing, fashion accessoriesHealth food, baby’s goods, cosmetics, packaged food
New hot-selling categories

A new shopping centre selling mainly Hong Kong branded goods and imported products
Average spend per customer (Rmb)More than 1,000300-1,000300-1,000 (jewellery, more than 1,000)
Promotional tacticsUse of such films as Kung Fu Panda as themes to attract customersDiscounts
Online vs offlinePhysical store onlyPhysical store onlyUsing mobile apps to promote cross-border shopping and sale of duty-paid imported goods online

Echo Liu, Shenzhen Office

Content provided by Picture: HKTDC Research
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