On October 6, 2024, as China’s week-long National Day holiday was coming to an end, passengers queued to check in at Chengdu Tianfu International Airport.
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BEIJING – China’s Golden Week holiday confirmed a trend toward more cautious spending, with consumers placing greater emphasis on experience.
Analysis released by Goldman Sachs on Tuesday showed that spending on each domestic trip during the seven-day public holiday ending on Monday was about 2% lower than pre-pandemic levels.
Analysts said: “Per capita tourism expenditure is low and service prices are sluggish, highlighting that domestic demand remains weak and consumption continues to decline.”
Goldman Sachs reported that the decline improved from a gap of more than 10% during the spring holidays.
October 1 is China’s Golden Week holiday, commemorating the founding of the People’s Republic of China.
Nearly one in five vacation bookings on Trip.com comes from users aged 20 to 25, making them a major consumer group company said. More than 90 concerts were held during the festival, and orders for performances and exhibitions grew by more than 80% daily.
However, a lack of blockbusters has caused box office revenue to drop to 2.1 billion yuan ($300 million) this year from 2.7 billion yuan last year. official mediaquoting the China Film Administration.
Consumers are also more spontaneous.
Trip.com said nearly 30% of travelers booked travel on the same day or a day in advance, an increase of 6 percentage points from last year. The company said the average number of days customers needed to book in advance fell to six days this year from 6.8 days last year.
This year’s holiday season follows a flurry of policy announcements and commitments and a surge in stock markets. Consumer spending in China has been sluggish since the outbreak began due to uncertainty about future income and economic growth.
“People are becoming more cautious in their spending. They are also choosing more affordable travel options and affordable locations,” Kenneth Chow, principal at Oliver Wyman, told CNBC on Wednesday.
“People are more interested in spending money on things they can talk about, things they can post on social media, rather than just big-ticket items,” he said. The shift means brands, including luxury brands, need to focus more on communicating their benefits to potential Chinese consumers, he said.
“As people become more mature, opinions have to change, and whoever can adapt to new trends first will win,” Zhou said. “It’s not just about Chinese brands. It’s not just about overseas brands. It’s about who is going to react first, who is going to capture the attention of Chinese consumers first.”
Home appliance sales rise
Peng Liyuan, head of consumer sector at UBS Greater China, pointed out on Wednesday that Golden Week data showed that consumption recovery is closely related to the home appliance trade-in policy.
According to official media reports, retail sales increased by 9% during the festival, and home appliance sales surged by 149.1%. Tax department data. It did not provide the amount spent.
“We believe that Golden Week consumption may still recover slightly from August due to trade-in subsidies (for home appliances and cars) and consumer vouchers issued by local governments,” Peng said. “For example, retail sales in Shanghai increased by 3%, compared with August this year. -3% year-on-year recovery.”
According to data from the Ministry of Culture and Tourism, during the Golden Week, the number of domestic tourists in mainland China reached 765 million, an increase from last year and before the epidemic.
However, according to another statistics from the Ministry of Commerce, China has received There were 782 million domestic tourist arrivals in 2019. It’s unclear whether the numbers are comparable.
The average number of border crossings for residents of mainland China rose to 1.08 million per day That’s up from 1.01 million per day during this year’s holiday period in 2019, according to CNBC calculations of official figures.
Japan, Thailand and the UK are among the most popular destinations Reservation website Trip.com.
The scale of mobile payment in China continues to expand
Alipay, the mobile payment operator owned by Alibaba’s Ant Group, said overseas transaction volume among Chinese Alipay users surged 60% in the four days before the holiday compared with the same period last year.
Alipay said that in terms of transaction volume growth, Malaysia, South Korea, Thailand, Hong Kong and Singapore are the preferred destinations for Chinese tourists. The report points out that in addition to shopping, Chinese tourists also spend a lot of money on entertainment, dining, services and transportation.
The company said foreign tourists using Alipay to travel to mainland China spent more than twice as much in the first four days of the holiday as a year ago. China has introduced visa-free travel to more countries, while Alipay and WeChat Pay – China’s two main mobile payment apps – have made it easier for foreigners to use the apps in the past two years.
Hong Kong said travelers from mainland China An average of 170,000 per day during the period During the holiday season, there was a 27% increase from a year ago. On October 1, Hong Kong said it received 220,000 tourists from the mainland, its highest level since the end of Covid-19 border controls.
Oliver Wyman’s Chow noted how hotels, especially in Hong Kong, have adapted to lower nightly prices by selling more food or other experiences.
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