Chinese consumers splurged on restaurants, online sales and movies over the Lunar New Year holiday as travel restrictions due to the COVID-19 pandemic made it difficult for many of them to make their annual trips home.
Sales at “key” retailers and restaurants during the week-long holiday amounted to 821 billion yuan (US$127 billion), an increase of 4.9 percent from 2019 and up 28.7 percent from last year, when the economy was in lockdown, Chinese Ministry of Commerce data showed.
Robust consumption over the holidays helps put the country’s post-pandemic economic recovery on a more sustainable footing, but the increase in spending was far below yearly growth rates of about 10 percent seen before the pandemic.
Photo: Thomas Peter, Reuters
The “key” retailers tracked by the ministry are larger firms based in major cities, which likely benefited from virus restrictions that prevented millions from traveling from cities to the countryside. The holiday is usually a peak period for consumption in the country’s rural areas.
The ministry did not release data for total retail sales during the holiday, which stood at 1 trillion yuan in 2019. That year, the annual increase was 8.5 percent, the slowest pace since records began in 2005.
Consumption over the Lunar New Year was “resilient,” with the data indicating that private consumption and capital expenditure are “taking the baton from infrastructure and property construction” in the economy’s recovery, Morgan Stanley analysts wrote in a note.
Visitor flow at shopping malls in large cities decreased 14 percent from 2019 levels, the ministry said, suggesting that consumers remain cautious about visiting shops.
The number of people traveling over the past 20 days plummeted 73 percent from a year earlier, Chinese Ministry of Transport data showed.
Cinema box office sales were particularly strong over the period, climbing 33 percent from 2019 to 7.8 billion yuan, said Maoyan Entertainment (貓眼娛樂), which tracks the sector.
That helped spur stock gains this week for companies such as Imax China Holdings Inc and Alibaba Pictures Group Ltd (阿里巴巴影業集團).
E-commerce benefited from travel restrictions, as families exchanged gifts by post.
Cainiao (菜鳥), the logistics arm of e-commerce giant Alibaba Group Holding Ltd (阿里巴巴), said the package volumes that it handled during the holiday were five times higher than in the same period in 2019.
Sales of luxury goods in China have been stronger than mass market products since the pandemic, reflecting restrictions on overseas travel and a stronger recovery in wages for high-earners.
That trend appeared to persist over the holiday, with jewelry sales at retailers tracked by the Chinese Ministry of Commerce rising 161 percent from last year.
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