12 March 2018
2018 Chinese New Year Sales (3): Chongqing
With takings up across all of its commercial districts, Chongqing also enjoyed something of a windfall with regard to its cultural and tourism sectors, while receipts at its many restaurants had seldom looked healthier…
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.
With purchase patterns varying considerably across Chongqing’s different retail sectors, the following gives a feel for the overall picture:
According to figures from the Chongqing Municipal Commission of Commerce, the total spend across the city’s major commercial districts and key retail outlets – as monitored over the period 15-21 February this year – amounted to RMB5.3 billion, a 10.2% year-on-year rise. Of this, the combined turnover of the city’s top six shopping districts totaled RMB3.7 billion (up 10.7% year-on-year). Among the traditional shopping districts, Jiefangbei (Liberation Monument) enjoyed the largest percentage rise (13.2%), followed by Guanyinqiao (11.1%), with both Nanping and Lianglu reporting growth of more than 10%. Among the more recently-developed shopping areas, Longhu Times Paradise Walk led the way with 12.3%, followed by Starlight Square with10.6%.
Over the Spring Festival period, demand for traditional New Year goods – notably food, tobacco, wine, and clothing – remained predictably robust, with steady growth shown all round. In terms of more dramatic growth, there was a notable surge in demand for both personalised items and for a wider range of non-traditional products, with gold and silver ornaments, jewellery, digital products, clothing, luggage, bags and even cars benefitting from this change in gift-giving preferences.
Given that the Year of the Dog was incoming, it was no real surprise that demand was up for canine-themed gold and silver trinkets. Less predictable, though, was the surge in demand for information-related products, with sales of smartphones, tablets and wearable devices all notably up. In total, the monitored retailers recorded a 22.6% year-on-year rise in the sale of communications equipment.
In addition to digital items, demand was also up for the more conventional electrical appliances. In the case of Suning Appliance’s Yuzhong outlet, it reported a 17.1% year-on-year growth in sales, while Wanzhou New Century Department Store’s electrical appliances department took RMB520,000 on the first day of the holiday, a 12-fold increase on its figure for the same day last year. Although not enjoying a similarly dramatic increase, Gome’s Gaoxuntang store still reported a 100% growth in year-on-year sales.
Nor was spending in the cultural and recreational sectors overlooked. In line with the success of many other such outlets, the Xinhua Book Store in the Yunyang district reported a sizeable uptick in footfall and a commensurate rise in year-on-year sales of 11.4%.
In further evidence of this heightened propensity to spend on culturally-related matters, takings were up across a wide cross-section of tourism and leisure activities. In particular, in keeping with the seasonal sentiment, demand was notably up with regard to New Year-themed folk attractions, as well as for a range of other cultural and recreational pastimes. Particular beneficiaries were many of the ancient settlements ringed around the city, including Ciqikou, Longxing, Puti and Baisha. The star performer here was Ciqikou Old Town, which attracted more than 50,000 daily visitors, a year-on-year increase of almost 10%.
With appetites clearly heightened by these many cultural encounters, a substantial number of the city’s restaurants – including Hezhiji and Caixiangyuan – also enjoyed a spike in patronage, with an average 10.3% year-on-year growth in bookings reported throughout the Spring Festival period. Within this, the Agri-tainment sector – those restaurants offering farm-to-table menus – enjoyed an average year-on-year growth of 19.3%, rising to an average of 19.6% for the more centrally-located establishments.
A clearer picture of the Spring Festival sales figures of three leading Chongqing retail outlets, together with on overview of their online strategy, can be found in the following table:
|Mall||Chongqing Department Store||Longhu Times Paradise Walk||Times Square|
|Best-selling items||Clothing and accessories (particularly outstanding), food, home textiles, cosmetics, shoes and bags||Clothing and accessories, cosmetics, household items, food and beverages, jewellery||Clothing and accessories, luggage and bags, food and beverages, jewellery|
|Price range (RMB)||Clothing and accessories: 100-3,000||Clothing and accessories: 300-5,000||Luggage and bags: 1,000-10,000|
|Food: 50-600||Cosmetics: 100-3,000||Clothing and accessories: 2,000-20,000|
|Shoes and bags: 200-4,000||Household items: 2,000-20,000||Food and beverages: 100-2,000|
|Cosmetics: 100-2,000||Food and beverages: 300-1,000||Jewellery: 2,000-60,000|
|Home textiles: 100-8,000||Jewellery: 800-5,000||Food: 200-2,000|
|Average spend per customer (RMB)||110||2,500||4,000|
|Promotional strategies||Brand discounts, additional loyalty points, money-off offers, gifts with purchases||Gifts with purchases, redemption of loyalty points for gifts, pre-sale and special discounts in the case of leading makeup, clothing and accessory brands||Lucky draw with purchases, gifts with purchases, triple loyalty points and discounts at certain stores|
|Offline vs online performance||Due to the central government’s adjustment of the national e-commerce policy and the store’s own changes to its purchasing and operational modes, www.sjgo365.com, Chongqing Department Store’s cross-border e-commerce platform, registered a decline in online sales overall. It also cancelled plans to open a chain of physical outlets in a number of the prefectural level cities around Chongqing.||Longhu Times Paradise Walk teamed-up with Alipay and Tmall to offer an O2O service. It also introduced several new retail concepts, including ‘supermarket of the future + food and beverage’. ||Times Square does not operate an e-commerce platform as it mainly rents out retail space to luxury brands and has no other part in their business operations. Many such tenants operate their own online sales portals.|