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2018 Chinese New Year Sales (2): Guangzhou

According to the statistics provided by the Guangzhou Municipal Commission of Commerce, the city’s key retailers recorded total sales of RMB2.94 billion over this year’s Spring Festival period, representing double-digit year-on-year growth, with a rising proportion of expenditure allocated to the services sector.

Photo: Guangzhou’s 2018 celebratory Spring Festival Flower Fair and Light Show.
Guangzhou’s 2018 celebratory Spring Festival Flower Fair and Light Show.
Photo: Guangzhou’s 2018 celebratory Spring Festival Flower Fair and Light Show.
Guangzhou’s 2018 celebratory Spring Festival Flower Fair and Light Show.

Overall, figures from the Ministry of Commerce showed that from New Year’s Eve to the sixth day of the Chinese New Year (15-21 February) this year, the total takings of retail and catering enterprises across the mainland exceeded RMB926 billion, up 10.2% in comparison to the 2017 Spring Festival golden week period. The most in-demand items tended to be traditional New Year goods, organic foodstuffs, gold and silver ornaments, smart home appliances and new digital products. In terms of emerging trends, a notably higher percentage of New Year items and takeaway meals were ordered online, while mobile payments and customised travel bookings also became more commonplace.

In order to fully assess changing Spring Festival buying patterns, new retail trends and regional purchasing idiosyncrasies, the HKTDC’s mainland offices monitored the sales performance, promotional strategies and digital engagement of the leading retailers within their geographical remit. This has resulted in a unique snapshot of seasonal consumer / retailer behaviour in seven key markets across China – Chongqing, Dalian, Guangzhou, Nanjing, Shanghai, Shenzhen and Wuhan.

Overall, this year’s Spring Festival proved a lively occasion for Guangzhou consumers, with a number of highlights meriting particular attention:

Across the city, sales in department stores and other retail outlets were notably robust, while the catering sector enjoyed a similar upturn. According to figures provided by the Guangzhou Municipal Commission of Commerce, the total takings of Guangzhou’s key retailers over the golden week period amounted to RMB2.94 billion, representing double-digit year-on-year growth.

Across the city’s major commercial districts – Tianhe Road, Beijing Road, Baiyun New Town, Zhujiang New Town and Shangxiajiu – a wide range of promotional activities took place, with the retail, entertainment, catering, convention and exhibitions, recreation, sports, tourism, culture and commerce sectors all well-represented. This vibrant mix of online and offline sales promotional activities was designed to boost the city’s standing as an internationally-acknowledged style hub and intended to appeal to residents, domestic tourists and overseas visitors alike.

In keeping with the New Year sentiment, many retailers staged shopping festivals and special promotions of festive goods, while also offering seasonal discounts. Among the most sought out products were seasonal clothing items and accessories, home appliances, jewellery, ornaments, confectionery gift boxes, dried seafood, health foods, tea and bedding.

According to the official figures, the city’s seven leading department stores –Grandbuy, The Sun, Guangzhou Friendship, TeeMall, Mopark, Shin Kong, and Wangfujing and Dongshan – recorded combined sales of some RMB440 million over the golden week period, a slight increase on their 2017 takings. This year, the most in-demand items were New Year food, clothing and accessories, gold and silver jewellery, home appliances and electronic items. The figures also covered the takings of 116 food retailers, including many of the city’s markets, supermarkets, greengrocers and specialist suppliers of grain products, non-staple foodstuffs and seafood, such as CR Vanguard, ParknShop, Shengjia and Xing’an. In this sector, the combined sales again enjoyed double-digit growth, taking the total to RMB2.42 billion.

Over the same period, many catering businesses offered special festive menus, including specialty cuisines, discounted dishes and New Year platters for both dine-in and take-out customers. Inevitably, the takings of many such establishments surged over the festive period, with bookings for Chinese New Year’s Eve family reunion dinners enjoying a huge 50% year-on-year increase. This uptick in the general catering sector was also carried over into the more tourist-oriented outlets.

According to the official figures, the city’s 10 leading catering enterprises took a combined total of RMB80 million over the festive period, a growth of 9% compared to the previous year. For the same period, the China UnionPay index of mainland city catering sales showed that Guangzhou ranked third overall, posting a year-on-year increase of more than 40% in total catering transaction volume and a 35% rise in transaction value per receipt, with the most significant growth recorded in the medium- to high-end sector.

The clement weather over the festival period was also seen as boosting overall retail sales, while the emergence of a number of new formats also made a significant contribution. In particular, many of the city’s shopping centres and malls had branched out beyond retail and incorporated entertainment into their offer. In the case of TeeMall, this year it staged a drum festival as a way of attracting Spring Festival customers.

Throughout Guangzhou, a seasonal Flower City theme was maintained, an initiative that helped attract some 15.61 million visitors over the holiday period, a year-on-year increase of 17.85%. Overall, tourism receipts were up 12.8% compared to 2017, representing a record high of RMB11.1 billion.

In terms of online purchases over the New Year period, there was a notable increase in demand for imported fresh produce. This was seen as in line with an overall increase in disposable income levels, which has seen many consumers keen to serve high quality food, fruits, biscuits and other items to their seasonal visitors.

According to statistics provided by Koubei – Alibaba’s local commerce platformmore than 300,000 Chinese New Year’s Eve diners paid via Koubei / Alipay this year. For its part, Tmall, reported a 300% year-on-year surge in demand for imported fresh produce, with Chilean king crabs, giant Boston lobsters and New Zealand deep sea perch among the top choices for celebratory New Year meals. It was Chilean cherries, however, that proved the standout items, with orders increasing by 400% compared to the same period in 2017.

JD.com’s figures also show a dramatically increased level of online orders for fresh produce over the festive period, with the site recording a 200% rise in demand for such items when compared to the same period in 2017. Among the most popular items were seafood, fruit, pork, beef and lamb. Alcohol sales were also up by a remarkable 110%, while the volume of general food items ordered pretty much doubled.

This general upturn in online ordering was also acknowledged by the Meiri Youxian (missfresh.cn) specialist fresh-food e-commerce portal. According to the site, Guangzhou consumers were particularly lavish when it came to spending on New Year food items, with the biggest single transaction overall recorded in the city – a total of RMB27,217 (US$4,300). Overall, the majority of purchases tended to be focussed in the high-end sector.

In terms of Guangzhou’s Spring Festival sales performance compared to the mainland’s other large cities, a quick overview of the relevant figures helps put this into due perspective:

Table: Guangzhou’s Spring Festival sales performance
Table: Guangzhou’s Spring Festival sales performance

Overall, in the case of Guangzhou, the 2018 Chinese New Year sales period was marked by a distinct preference for higher quality qoods, a trend that was clearly apparent in the general purchasing sentiment, the preferred sales channels and in the choice of items. It is clear that many consumers, rather than just spending on perceived necessities, opted to seek out particular brands, luxury items and higher quality alternatives. This applied as much to specifying services as to choosing products.

While, in previous years, Spring Festival spending was primarily focussed on food and clothing, it is now spread more widely, with far more emphasis placed on services-related purchases, including catering, tourism, study, fitness and entertainment. In another change, gone are the days when shoppers trudged home with unwieldly New Year purchases. Instead, consumers are buying such cumbersome items online and enjoying the luxury of rapid home deliveries. With the rise in cross-border e-commerce, even high-quality imported items can now be easily ordered and quickly received.

Source: Various mainland websites

Guangzhou Office

Content provided by Picture: HKTDC Research
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