consumption Archives - Focus - China Britain Business Council

China’s 618 shopping festival results and trends, 2022

Pearl Zhu — Wed, 22 Jun 2022 07:30:52 +0000

Chinese consumers spent nearly 700 billion RMB on e-commerce platforms like JD.com, Pinduoduo and Alibaba’s Tmall during China’s mid-year 618 shopping festival in 2022, although cautious post-lockdown consumers put a damper on some of the festival’s usual fireworks, writes Robynne Tindall

China’s major e-commerce platforms sold approximately RMB 695.9 billion (£84.7 billion) of goods during China’s annual 618 shopping festival (measured in gross merchandise volume from 31 May to 18 June) according to data monitoring firm Syntun. Tmall was the top-performing traditional e-commerce platform, but live streaming e-commerce platforms like Douyin and Kuaishou exhibited strong growth, generating a GMV of RMB 144.5 billion (£17.5 billion) up from RMB 64.5 billion in 2021.

Despite these huge numbers, JD.com sales only rose 10.3% compared to last year, a sharp decrease from the 2021 event’s 27.7% increase on 2020. As a result, some have suggested that consumers in China could be reining in their spending following strict Covid-19 lockdowns in cities like Shanghai. As Sixth Tone noted, the lockdowns muted sales in the period leading up to 618, hurting the platform rankings that get merchants onto consumers’ homepages on apps like Tmall and JD.

Platforms had recognised this potential turn down in spending prior to 618, and many shifted from a sales-driven to a service-driven strategy that aimed to retain customers through value-added services rather than capture new ones. For example, JD promoted the reliability of its in-house logistics solutions in response to supply chain disruption caused by lockdowns. It also launched a “green impact initiative” to label products that conform to a set of environmentally friendly standards, with the hope of appealing to shoppers put off by the rampant over-consumption associated with shopping festivals in China. This is a useful insight for brands looking for ways to stand out from the noise during shopping festivals.

Many categories still saw strong sales growth during 618. Household appliances/electronics were the most popular sales category, followed by skincare, then sports and outdoors. However, skincare sales were down 18.9% year on year according to Syntun, as some consumers simplified their skincare routines as a result of not seeing other people face to face during strict lockdowns. Frozen food and ready meals, on the other hand, saw a year-on-year increase of 27.5%, driven by sales via new “immediate consumption” delivery services such as JD.com’s JD to Home (京东到家).

Data from Alibaba also showed niche hobbies driving consumption trends, consistent with the wider shift towards interest or need-based shopping among increasingly wallet-conscious Chinese shoppers. For example, Tmall saw sales of skateboarding gear jump nearly 300% in the 618 festival warm-up period (31 May-June 3). Camping-related products also saw strong growth.

618 is now the second-biggest shopping festival in China, dating back to 2004 when it was a simple one-day festival to celebrate the anniversary of JD.com. Today, the festival is no longer confined to a single day or platform, with promotions starting as early as 1 June and extending beyond 18 June (this year’s event on JD lasted from 23 May to 20 June).

While sales may have taken a hit this year, the scale of the 618 festival remains huge, once again highlighting the need for brands to stay on top of the shopping festival calendar in China. In addition to 618 and Singles’ Day, other key shopping festivals include Lunar New Year in January/February, Women’s Day on 8 March, and the 12.12 festival on 12 December.

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How camping became the next big China travel trend

Antoaneta Becker — Thu, 02 Jun 2022 07:30:18 +0000

After decades of mass migration to cities, today, many young people in China are turning to nature for adventure, solace, and to escape their urban working lives

With tight border restrictions and barren flight schedules suspending international leisure travel from China and months-long lockdowns in major cities making even inter-provincial travel near impossible, China’s travel sector has had a very difficult couple of years. However, one niche area has seen surprising growth since 2020: camping.

The market for campsites in China increased from RMB 7.71 billion in 2014 to RMB 29.9 billion in 2021 according to data from iiMedia Research Institute quoted in the Global Times. New campsites are springing up on the outskirts of cities, offering the feeling of a holiday without having to worry about crossing into a different province and getting caught up in zero Covid restrictions.

As a recent episode of Tong Digital’s podcast Tracing the Trend explored, beyond the pandemic, there are several factors driving the rediscovery of the Chinese countryside, including a desire to reevaluate the nation’s recent relationship with rural areas, and the increasing pressure of urban lifestyles.

The Chinese countryside: past and present

The historical roots of Chinese attitudes to the countryside can be traced back hundreds – if not thousands – of years, but a notable recent influence was the “up to the mountains, down to the countryside” movement headed by Chairman Mao Zedong in the late 1960s. During this time, 17 million urban youth from across China were sent to remote areas with the expectation that they would learn valuable skills from farming communities. The gruelling lifestyle was heavily romanticised by the Communist Party, as farming communities provided a significant support base for the Communist revolution.

Despite this positive narrative about the countryside, for many, China’s urban spaces have always been associated with privilege. Alongside economic opportunities, this has been one of the factors driving the mass migration from rural to urban areas in recent decades, and has led to “damaging perceptions of the countryside as ‘backwards’, [which] has created a bit of a rift and also socio-economic inequalities between cities and rural areas in more recent decades,” according to Tracing the Trend’s host Stefan Harvey.

Having spent her childhood in Yunnan province, the founder of off-the-beaten-path travel agency Wild China, Mei Zhang, holds two images of the Chinese countryside in her mind. On the one hand is the notion of a timeless countryside, where farmers work in the paddy fields of an idyllic landscape, just as they have done for millennia. However, it cannot be overlooked that these farmers also struggle through hard labour. That struggle is ultimately what leads to younger generations being taught that “this is what you want to get away from, move to the city.”

On the other hand, Zhang recalls recently seeing a farmer using their smartphone to live stream produce to affluent consumers in major cities. Here we can see an overlap between the idea of a timeless agrarian life and cutting-edge technology and consumerism. This concept has been heavily reflected in recent ventures by tech giant Alibaba, which is investing in connecting farmers with city-dwellers via live streaming to maximise sales of produce.

Tourists, entrepreneurs, and Gen Z

There are three main groups of people returning to and redefining the countryside: tourists, entrepreneurs, and those looking to disengage from city life.

Tourism to rural areas in China is a trend that has largely been driven by Covid-19 and the inability to travel internationally. The aforementioned podcast hosts stress how the taste for visiting remote and under-explored places has increased significantly in light of the pandemic, and that this shift is here to stay. According to stats released by Xiaohongshu, in 2021, there was a 587% increase in posts including the keyword “camping” on the platform compared to 2020. According to Alizila, purchases of outdoor products, from practical tents and mats to more aesthetically-driven glamping accessories such as solar-powered fairy lights, jumped by more than 130% in the 2021 618 sales on Tmall. This could be a great opportunity for British businesses in the outdoor/sporting goods market.

The second group is people who are trying out entrepreneurial lifestyles in the countryside, predominantly by selling produce or experiences to more affluent consumers. Based on her expertise in the industry, Zhang suggests that those who are moving to the countryside to run tourist services such as farm-to-table dining experiences benefit from the ‘rebranding’ of the countryside, and will inevitably create greater revenue for farmers. Rural workers are able to capitalise on the strong purchasing power of urban Chinese far more directly than before. However, this trend also highlights that it can prove to be a challenge making a living in an area where opportunities are fairly limited.

Finally, some young urban Chinese are setting their sights on the countryside to disengage from capitalist competition in the cities altogether, and form self-sufficient communes in remote areas. These individuals are symptomatic of current popular phrases in the Chinese lexicon such as “involution” (originally an anthropological term describing when population growth doesn’t increase productivity or innovation, now used to refer to burnout) and “lying flat” (rejecting society’s expectations and refusing to engage in competition for success at work, among other things, such as not getting married or buying a house). These terms were coined by disillusioned Chinese people who do not wish to partake in the harsh competition found in the city and wish to escape the long hours of white-collar working life.

In a less extreme version of this trend, many young Chinese people are simply discovering and enjoying destinations that have not been heavily developed for tourism, the lack of fellow travellers making up for the lack of facilities.

“Chinese travellers [have had a] taste of the richness of the culture, the scenery and hospitality, and the creativity that designer experiences have in the countryside, and I think this taste can be addictive… Now that we have experienced the joy of not visiting tourist sites, this will shift China’s travel trend,” Zhang explains.

The future of rural travel and tourism

Looking to the future, Zhang sees an increased appreciation of authenticity that will, in turn, become a new luxury. She emphasises that luxury is no longer just based on price point but rather on experience. So-called ‘money can’t buy’ trips are in fact those that are nourishing for the soul, and often the memories made counter the price point.

The episode closes with a final discussion on how international fashion houses are increasingly exploring the outdoors as a marketing theme. The most prominent example of this over the past 6 months has been Gucci teaming up with The North Face. This campaign launched in China with two out of the five global ‘Gucci Wall’ installations being situated in Shanghai and Hong Kong. In addition, in February 2021, Burberry released its campaign for Chinese New Year, focusing on the outdoors and reconnecting with nature and one’s surroundings. However, it is important to reiterate that brands will need to do more than just romanticise the outdoors to engage with and continue to capture the gaze of the Chinese consumer.

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China prepares for record-breaking May holiday travel

Robynne Tindall — Fri, 30 Apr 2021 06:00:14 +0000

Is China seeing a tourism boom? With Covid-19 under control in the country, the upcoming May holiday is expected to bring record levels of travel and spending, writes Robynne Tindall.

More than 250 million people are expected to take trips around China during the upcoming Labour Day national holiday from 1-5 May. This year’s holiday has been extended to five days instead of the usual three in a bid to encourage domestic consumption that looks to have paid off, with bookings surpassing the same period in 2019 in many areas.

Early estimates released by travel platforms like Trip.com and Qunar show a spike in bookings for the period as far as a month before the holiday, with air and rail tickets and hotel rooms selling out across many cities. Popular destinations include Sanya, Beijing, Chengdu and Wuhan.

China’s official train ticket booking platform, 12306, sold hundreds of thousands of tickets in just a few minutes on 17 April, the first day that tickets for 1 May went on sale. According to statistics released by the platform, it had sold 3.15 million tickets by 6pm on 17 April – three times that of 2019.

Meanwhile, tickets for major museums, theme parks and tourists sites such as the Palace Museum in Beijing, and the Disney Resort in Shanghai, are equally hard to come by, with most attractions still restricting visitor numbers to prevent the spread of Covid-19.

The May holiday comes at a time when many people in China are feeling confident enough to travel longer distances again now that Covid-19 has been well contained. During this year’s Spring Festival in February, China’s other peak travel season, travel was discouraged due to small, sporadic outbreaks around the country.

Marketers are likely to be watching the holiday closely, as trends during this period could shed light on future development trends in the industry. For example, figures suggest that more travellers are choosing to travel to remote destinations such as Qinghai Province in western China, or opting for self-drive holidays to avoid crowded public transport. China’s domestic tourists are also increasingly young and adventurous; some sites have reported increased bookings from the so-called post-00s generation, the oldest of which turn 21 this year.

Nevertheless, Covid-19 is still on people’s minds and many travellers remain cautious. The Chinese Center for Disease Control and Prevention recently issued guidelines reminding travellers to avoid crowded, poorly ventilated areas and to continue to wear masks when travelling on planes and trains.

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China’s economy records 18.3% growth in the first quarter of 2021

Robynne Tindall — Sat, 17 Apr 2021 06:45:21 +0000

Newly-released figures suggest the Chinese economy is experiencing a strong post-pandemic resurgence.

According to figures released by China’s National Bureau of Statistics on Friday, 16 April, the Chinese economy grew 18.3% in the first quarter of 2021, the fastest growth on record. These record-breaking numbers come in comparison to the steep 6.8% slump in Q1 2020 caused by strict nationwide lockdowns in the early days of the Covid-19 pandemic.

The growth has been driven by robust exports stimulated by the gradual recovery of the global economy, as well as government support and investment in construction and infrastructure projects. Industrial output added 24.5% in Q1, growing by 14.1% year-on-year.

Retail sales also increased 34.2% year-on-year in March, meeting expectations. Domestic consumption is expected to play a greater role in supporting growth as the year goes on as consumers gradually start to feel more comfortable about a return to spending at pre-pandemic levels.

On a quarterly basis, economic growth during this quarter slowed to 0.6% from 3.2% in the previous quarter. Nevertheless, the country’s strong growth in the first three months of 2021 suggests that it is on track to meet its target of economic expansion of 6% or more this year as announced by Chinese Premier Li Keqiang at the National People’s Congress in March. The IMF has predicted that China’s growth will be around 8.5% this year.

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