October 7 marked the official end of China’s 7-day Golden Week holiday, one of the country’s longest holidays and a barometer for the ever-shifting consumption habits and behaviors of Chinese consumers. The weakened Yuan, a domestic economic slowdown, and a heightened level of patriotism were just a few of the factors forming this year’s consumption trends. But what were some of the other trends that luxury brands and retailers should be aware of? Here, we summarize four that were unique to this year’s Golden Week holiday.
Rising domestic travel
According to Fliggy, Alibaba’s online travel booking agency, bookings for domestic trips increased by 42 percent this year, seemingly replacing nearby international travel. This could be directly linked to the continuous devaluation of the Chinese yuan and the country’s weakening economy. This also reflects the government’s strategy to boost the domestic economy, which worked according to data published by the Ministry of Culture and Tourism: Domestic tourism revenue reached 649.71 billion yuan, which was an increase of 8.47 percent over the previous year.
Hong Kong took an especially big hit this year because of the ongoing protests there, as many people opted to skip this popular luxury retail shopping destination. The number of tourists entering the city from Shenzhen’s Luohu District fell 48 percent from last year, as was mentioned by the State Immigration Administration. Instead, Japan saw a 30-percent increase in tourism over the previous year. This should be a warning to luxury brands and retailers to place their merchandise accordingly.
Lower-tier cities continue to drive growth
Travel is still a mainstream way to enjoy the Golden Week vacation, but it’s obvious that both consumption and travel shifted to lower-tiers cities this year, thanks to more exposure from online influencers and a growing interest in local Chinese cultures. We’re also seeing more luxury brands expanded their retail footprint to lower-tiers cities to take advantage of untapped consumption potential in cities like Xiamen, Chengdu, Hangzhou, and others.
The ‘silver generation’ becomes dominant
As mobile pay continues to penetrate all areas of life in China, the silver generation has gone on to become the driving force behind holiday consumption. According to data from Alibaba, this demographic is now tech-savvy and will order food delivery, book travel packages online, and purchase high-end skincare and health packages from their phones. As much as luxury brands focus on millennials and Gen-Z, they shouldn’t ignore Chinese seniors, many of whom are retirees willing to splurge on luxury goods and go on luxury holidays. According to a study by the China-Britain Business Council, Chinese seniors who are 60 or older have set aside an average of 15 percent of their annual income for travel.
Increased patriotic consumption
This year marked the 70th anniversary of the founding of the People’s Republic of China, which has raised the level of patriotism in the country and changed the type of travel, entertainment, and retail consumption this year. Three films that paid tribute to the People’s Republic of China grossed a total of 546 million yuan ($76.6 million) at the box office in only a few hours after opening, according to the Chinese movie ticketing app Maoyan Entertainment.
Historically important travel locations — known as ‘red tourism destinations’ — such as Yan An, Shi Jia Zhuang, and Ji‘an saw an increase in interest, particularly with the younger generations. For example, from October 1 to 3, bookings at the Yan’an hotel ballooned to 20 times more than the rest of the year. This patriotic attitude also translated to homegrown brands, as eight of the ten top-selling beauty brands during the week were Chinese, according to Alibaba. For instance, more than 3 million people rushed to buy Maotai, a Chinese white wine, on Tmall. To win over these patriotic consumers and create a China-friendly impression, many Western luxury brands and retailers even launched special products or campaigns that celebrated China’s 70th anniversary.
Courtesy : Jing Daily