17 Feb 2017
2017 Chinese New Year Sales: Shenzhen
In the run-up to this year’s Spring Festival, a number of trends became clearly apparent in Shenzhen’s retail sector. Firstly, fresh produce was particularly in demand, while there were signs that ecommerce had really come of age. Most notably, the value of online clothes orders soared by 250% year-on-year, with the number of people buying maternity and infant clothing from e-commerce sites also doubling. Significantly, there were also signs that the O2O business model, which combines both online and offline channels, was proving particularly popular with local consumers.
Overall, figures from the Ministry of Commerce showed that, from New Year's Eve to the sixth day of the Chinese New Year (27 January-2 February 2017), the total takings of retail and catering enterprises across the mainland exceeded RMB840 billion, up 11.4% over the same period last year. Traditional New Year goods, eco-friendly food, seasonal clothing, gold and silver ornaments, smart energy-saving home appliances and several new digital products were among the best-selling items for 2017.
As part of the survey, staff at the HKTDC's mainland offices - Beijing, Dalian, Qingdao, Xi’an, Shanghai, Hangzhou, Nanjing, Wuhan, Chongqing, Chengdu, Guangzhou, Fuzhou and Shenzhen - selected a number of representative local shopping centres and monitored their performance before, during and after the Chinese New Year sales period in order to ascertain just how their respective local consumer markets fared this year.
In Shenzhen, overall Spring Festival buying patterns shared the following characteristics:
- Food was the most in demand commodity in volume terms throughout the Spring Festival period, with sales of other traditional New Year’s goods also proving brisk. In line with this, sales of traditional cakes, dried seafood, nuts and upmarket fruit soared as the Spring Festival approached. With Shenzhen at heart a migrant city, home to people from every corner of China and beyond, local businesses accordingly stocked well-known New Year’s goods brands from across Asia, complete with festive packaging and seasonal promotions. Walmart, for instance, saw sales of Bibigo, the medium-high-end Korean dumpling brand, quadruple compared to 2016.
- In other developments, medium-to-high-end and imported goods proved particularly welcome by consumers, racking up considerable sales as proof of the newly-enhanced spending power of many Shenzhen residents. Particularly popular were a number of beautifully-packed imported food items, which were frequently bought as gifts for relatives and friends. In the case of Walmart, it had on offer a wide range of medium-to-high-end gift packages, including fruit boxes complete with an array of avocadoes, organic oranges and cherries. More upmarket items, such as nuts, were also highly popular and accounted for a high percentage of sales at many of the city’s leading supermarkets.
- The online-to-offline (O2O) option also proved popular with consumers. In line with this, Aeon, JD Daojia, CR Vanguard, Walmart and a number other retailers all launched home delivery services in the run-up to the Spring Festival holidays. An increasing number of e-commerce platforms also introduced a round-the-clock delivery service during this period. Yiguo.com, a specialist fresh food e-commerce platform, for instance, offered a 24-hour service with no surcharge and no delay within its delivery zone. In line with this, customers who placed orders on New Year’s Eve or New Year’s Day were able to receive their delivery the following day in line with normal practice. Suning Yigou, JD.com, Tmall and several other e-commerce platforms also offered a 24-hour service during the Spring Festival holidays.
- Again thanks to its status as a migrant city, many Shenzhen residents traditionally return to their hometowns over the Chinese New Year period. Frequently, this sees them buying traditional New Year’s goods in Shenzhen prior to heading back to their hometowns. For this reason, New Year’s goods and food, clothing, jewellery (especially ornaments incorporating Year of the Rooster zodiac elements) as well as the latest digital products, such as smartphones and tablets, were particularly sought out.
- According to the New Year sales figures released by JD.com, wine and spirits accounted for the largest proportion of Spring Festival shopping spend by people in Shenzhen. These figures also indicated that enjoying imported fresh food and engaging in outdoor fitness activities are also increasingly popular this year.
- JD.com’s big data showed that wine, seafood/meat and fruit led in terms of the amount people spent, nuts/roasted seeds, beverages and snacks led in terms of items sold, while Chinese spirits (13%), nuts/roasted seeds (22%) and snacks (31%) led in terms of quantities sold.
- Overall, spring festival consumption showed a number of regional variations. Wine, for instance, ranked among the top five food and beverage purchases in Guangdong and Shanghai, perhaps reflecting the western influence on festival celebration styles in the southeastern coastal areas.
- In the case of fresh food, demand showed a 400% year-on-year increase, with demand for imported fresh food faring better still, with some outlets reporting a 1400% rise in sales. In total, sales of imported fresh food accounted for more than 50% of all fresh food sales in Beijing, Guangdong and Shanghai.
- In terms of demographics, single people tended to opt for fruit, while married couples favoured seafood, beef and eggs over the New Year period. In geographical terms, consumers in the south preferred fruit while those in the northeast and northwest favoured seafood.
- For 2017, JD.com recorded double the number of online customers, orders and overall sales volume as it did with regard to CNY 2016. In terms of other developments, it became more common for whole families to take trips together over the New Year period, a development spurred by the increased level of health-consciousness among many consumers. In a related development, the number of buyers of outdoor goods and the total volume of outdoor goods sold virtually doubled when compared to 2016. It was clothing in general, though, that registered the fastest growth, with a sales turnover during the 2017 Spring Festival period some 250% higher than that of the previous year. Additionally, in a development partly spurred by the formal adoption of the two-child policy, the sales volume of maternity and baby clothing doubled, as did the number of purchasers.
- HKTDC’s Shenzhen Office was also informed by the marketing department of one local supermarket that fruit, tobacco, cooked foods - including cured meat and sausages - braised food, and imported fruit were all among this year’s best-selling product categories, showing a year-on-year increase of around 28%. There was, however, little change in the annualised growth figures as sales have largely stabilised over the long-term. This year, the supermarket in question also extended its online sales offering, increasing the range of produce it had on offer, while lowering the threshold for free delivery - two factors that helped explain its overall increase in online sales. (Note: In 2016, the Spring Festival was celebrated in February, while in 2017 it fell in January).