Domestic tourism in China saw a jump, and consumer sentiment is improving more slowly after the zero-Covid policies ended, says consumer expert Ashley Dudarenok at CNBC. Brands are relucted in spending their marketing budgets. Dudarenok said that heading into 2023 and the Lunar New Year, some smaller brands had turned more conservative on China and cut their marketing budgets for the country in half.
More recent data show Chinese consumers are starting to open their wallets again, especially for travel.
During the seven-day Lunar New Year holiday that ended Friday, national tourism revenue surged by 30% from last year to 375.84 billion yuan, according to official figures. But that was still short of 2019 spending.
“Consumer sentiment is better. Spending power is kind of back,” Ashley Dudarenok, founder of China digital consultancy ChoZan, said Friday. “But I don’t think that suddenly from one month to the next things are back … to 2019 or double 2019.”
Dudarenok said that heading into 2023 and the Lunar New Year, some smaller brands had turned more conservative on China and cut their marketing budgets for the country in half.
“Consumer sentiment was really down, nobody knew what was actually coming, and a lot of marketing budget and dollars went into 11.11 [Singles Day] and it was also not successful, so brands did not earn a lot over 11.11” and another shopping festival in December, she said. “Then suddenly China opened. Many people did not expect that [and were] quite startled by this swift development.”
Dudarenok does expect overall consumer trends to continue, whether it’s people in larger cities spending more “on feeling better” or people in smaller cities paying for higher-quality products.
Many analysts expect high levels of savings among Chinese consumers during the pandemic will translate to greater spending this year.
At the policymaker level, Chinese authorities say they’re prioritizing consumption. Premier Li Keqiang led the first post-holiday executive meeting of the State Council on Saturday, and “called for efforts to expedite consumption recovery and keep foreign trade and investment stable,” according to a readout. The meeting said policies to promote the consumption of cars and other big-ticket items would be “fully implemented.”
Ashley Dudarenok is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers’ request form.
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