Ashley Dudarenok

Spring festival is the time when China’s consumers spend more than any other period during the year. How will their spending behavior in 2021 look like, after the Covid-19 disruptions of 2020. Marketing expert Ashley Dudarenok looks ahead for Technode.

Ashley Dudarenok:

While this Spring Festival may not look much like the pre-Covid glory days, the holidays this year will at least be more optimistic as China has accumulated a year of experience fighting against the pandemic. The Ministry of Transport predicted there would be about 1.7 billion trips made nationwide, which was 40% lower than in 2019 but still 10% higher than last year.

Domestic tourism will look different this year: Consumers are also showing different travelling patterns compared to previous years. As of Jan. 25, the average cost (in Chinese) of plane tickets on local online travel agency Qunar during the Spring Festival was RMB 651.36, about RMB 200 cheaper than in 2019. Ticket prices for traditionally popular routes are even lower. Usually sold out, holiday plane tickets from Beijing to Sanya, Hainan, are as low as RMB 610 on some platforms. While the demand for plane tickets has cooled off, staycations at local B&Bs and hotels are picking up. Hotel bookings for New Year’s eve grew 30%. Shanghai, Guangzhou, Chengdu, Shenzhen, and Chongqing were among the top cities with the most hotel bookings.

Spending intent is still high: Consumer sentiment is also looking promising. While some may choose not to return home this year, they are still purchasing products on e-commerce channels both for personal use and as gifts. Experts predict that the food and beverage category will soar in Q1 2021. Data from the first day of Tmall’s pre-Spring Festival sales campaign shows that edible items such as dried fruits, confectioneries, and Chinese pastries are still the best-selling items, although sales of single person instant meals (in Chinese) grew 15-fold to become the category with the most growth on the platform. Ada Yang, Head of Social Community at Pinduoduo, told ChoZan that she sees great potential for the sales performance of quality agricultural products, local brands, and imported products during the holiday season as Chinese citizens visit and present gifts to each other during the Chinese New Year holidays.

Like 2020, live streaming remains key to pre-Spring Festival promotions: Douyin ran pre-Spring Festival promotions from Jan 4. to Jan. 20. Celebrities, influencers, and brand livestreams, as well as billions of RMB in free traffic and platform subsidies, supported the promotions. Chinese entrepreneur and live-streamer Luo Yonghao has already started six Spring Festival live streams since the beginning of the campaign. Luo’s livestreaming on Jan. 10 achieved over RMB 200 million in GMV and over 347,000 orders. Douyin is also actively catering to young consumers this year by selecting trendy products from categories such as the apparel, shoes, bags, beauty, and home products. The platform is also launching Spring Festival themed gift sets by collaborating with brands such as Haidilao and the Summer Palace.

Spring Festival 2021 is poised to continue China’s economic resurgence and recovery. China marketing experts expect robust growth in consumer confidence leading into Q1 2021. More details, including Chinese consumers’ growing preferences for local tastes, Chinese culture, domestic brands, and health-conscious options, are described in our full report, over 600 pages, available for download on our website.

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Ashley Dudarenok is a speaker at the China Speakers Bureau. Do you need her at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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