7 March 2012
2012 Chinese New Year sales – strategies and bright spots in Shanghai
According to retail market surveys conducted by the Hong Kong Trade Development Council’s mainland offices on sales before, during and after the Chinese New Year in 2012, holiday consumption on the Chinese mainland remained upbeat. With the exception of a few cities, sales at the majority of shopping malls surveyed rose 10-30% over the same period last year, with cities like Beijing and Shanghai registering record high growths. The strong spending power of the people was particularly evident during the Spring Festival period. Product-wise, the types of hot selling items in various large cities are similar, with digital products (such as smartphones and computers), garment, food, jewellery, watches, and home products generally selling well.
Overall department store sales
During the Chinese New Year golden week holiday in 2012, retail sales in Shanghai reached Rmb5.685 billion, registering a record high since the festival sales statistics system was introduced in 1999. During this period, holiday customer traffic mainly concentrated in urban centres and the scenic spots in rural areas. Suburban shopping centres became the festival consumption hot spots of rural residents.
Sales of the 4,000-plus outlets of the 452 large and medium commercial enterprises in the city from 22 to 28 January amounted to Rmb5.685 billion, or an average daily sales of Rmb812 million. Spring Festival sales grew 14% over last year, up 2.5 percentage points year-on-year.
Driven by traditional Chinese New Year customs, festive spending peaked before the Spring Festival. Based on random surveys, sales of commercial enterprises in the city topped Rmb935 million on New Year’s Eve, reaching the peak of sales in the week-long holiday.
A number of bright spots emerged in this year’s Spring Festival consumer market. In terms of sales amount, spending on New Year goods continued to expand, with time-honoured established shops emerging as the winner. On Chinese New Year’s eve, sales at Wangjiasha restaurants climbed 33.5% year-on-year, sales at First Food stores grew 16.7%, while thousands of semi-processed New Year’s Eve dinner sets were sold by Sunya. In terms of consumption type, spending on New Year’s Eve dinner and wedding banquet was particularly strong. Three days before the long holiday, sales at well-known hotels such as Shanghai Old Restaurant and Park Hotel as well as chain-operated restaurants such as Zhangshenji and Langyifang all rose over 20% year-on-year. In terms of product type, spending on gold and silver jewellery reached new highs again. According to statistics, sales at the Yong’an Pudong store, which specialises in jewellery, grew 90% year-on-year, with growth rate registered on Chinese New Year’s Eve reaching 160%. In addition, sales of garment, shoes, headgear, beddings, and seasonal products such as electric heaters also rose substantially. Sales at Huiluo Shopping Mall, Shanghai Fashion Store and Shanghai Lady Fashion Department Store grew 47.6%, 42.1% and 36% year-on-year respectively; while sales at department stores such as Orient Shopping Center, Yong’an Department Store, Friendship Store and Pudong Emporium all grew more than 20% year-on-year. During the Spring Festival, new sales model and concept such as online shopping were also popular with consumers. Take Oriental CJ’s TV shopping channel as example, its sales jumped 80% year-on-year, with growth rate reaching 230% on New Year’s Eve.
Per capita spending approaching Rmb1,000
According to random surveys conducted by the Shanghai Holiday Office during the holiday, per capita spending of visitors to Shanghai was Rmb943, up 7% year-on-year; of which, shopping accounted for 44%. This contributed to the growth in sales revenue of various commercial enterprises in the city.
During the week-long Spring Festival holiday, accumulated sales revenues of 10 commercial enterprises in the city including Shanghai No.1 Department Store, Orient Shopping Center and New World City reached Rmb496 million, a growth of 8.18% year-on-year. The sales figures and/or year-on-year growth of selected commercial districts are as follows:
Nanjing East Road: Rmb550 million (+14.9%);
Huaihai Middle Road: Rmb67 million (+11.1%);
Yuyuan: Rmb190 million (+5.5%);
Wujiaochang, Yangpu (17 enterprises): Rmb263 million (+20.97%);
Nanjing West Road, Jing’an (major enterprises): +19.19%.
Brisk suburban shopping
Sales figures from various districts and counties show that customer flows at rural and community department stores were busy. The sales growth of commercial enterprises in suburban areas was stronger than that in urban centres. Sales at Bailian Jinshan Shopping Mall in Jinshan District, Famos Square in Minhang District, and Bailian Nanqiao Shopping Mall in Fengxian District grew 80.2%, 43.4% and 31.8% year-on-year respectively. The festival sales of the eight surveyed enterprises in rural areas amounted to Rmb918 million, up 22.1% year-on-year. Of which, sales at the surveyed enterprises in Jiading, Minhang, Qingpu and Baoshan districts all broke the Rmb100 million mark. In Jiading, the emergence of online shopping enterprises has directly propelled the growth in festival sales, making the district the leader in rural sales with the highest year-on-year growth among all districts and counties in the city.
High-end department stores attract visitors from neighbourhood
According to statistics compiled by the Shanghai Municipal Commission of Commerce, retail sales of 117 department store enterprises in Shanghai during the week-long Spring Festival holiday topped Rmb2.611 billion, a growth of 17.6% year-on-year. Of which, sales at shopping malls and department stores grew 21.1% and 16% respectively. Sales at the surveyed enterprises in Pudong New Area and the eight downtown districts grew 11.6% and 15.9% year-on-year respectively. Among the surveyed department store enterprises with single store sales ranking the top 10 positions during this year’s Spring Festival period, No.1 Yaohan Department Store, New World City and Shanghai No.1 Department Store continued to lead the pack.
High-end department stores in Shanghai have attracted many visitors from the surrounding regions. The festival sales of the five leading department store enterprises, namely Plaza 66, Ongoing, Westgate Mall, Golden Eagle and CITIC Square, topped Rmb232 million, up 18.4% year-on-year.
Distinctive market characteristics
Statistics show that retail sales of 117 supermarket enterprises in Shanghai during the week-long Chinese New Year holiday reached Rmb1.913 billion, a growth of 8.1% year-on-year, at a rate 8.9% higher than that registered during the same period last year. Sales of hypermarkets and supermarkets rose 10.8% and 6% year-on-year respectively, with the holiday retail sales of Carrefour’s Nanfang Department Store branch, Metro’s Putuo store, Tesco’s Qibao store, Century Mart’s Luodian store, and NGS’s 118 Plaza climbing 72.9%, 49.9%, 49.1%, 44.6% and 25.6% year-on-year respectively.
Retail sales of the surveyed department store enterprises during the week-long holiday reached Rmb668 million, up 8% year-on-year. Sales of jewellery, watches and food grew 24.6%, 22.9% and 15.4% year-on-year respectively. Due to the expiry of the trade-in policy, overall sales of home appliances dropped. However, sales of high-end digital products rose, with 3D colour TV priced at over Rmb10,000 selling like hot cakes. Sales of iPhone 4S were brisk, with suning.com alone selling 2,000 phones in the seven days. However, sales of automobile and pharmaceutical specialised stores declined 8.7% and 8.5% year-on-year respectively.
Sales of home appliances peak during Spring Festival
According to Lu Wei, general manager of YOLO, the company launched its spring promotion sales starting from 13 January to attract consumers who have the habit of buying electrical appliances at festivals. Based on the sales figures of all YOLO stores from 13 to 28 January, the Year of the Dragon Spring Festival home appliance retail market has the following characteristics: sales of special packages were buoyant, sales concentrated in rural stores, new products launched before the New year were well-received, and sales growth of high-tech products such as 3D colour TV was significant. From the first to the sixth days of the Lunar New Year (23-28 January), overall sales of YOLO’s 100 or so stores across the city rose 45% over the same period last year. Boosted by factors such as festival gift buying and back-to-school purchase, the growth of 3C (computers, communications and consumer electronics) digital products was particularly strong, up nearly 100% during the Chinese New Year holiday.
Among YOLO’s 100 or so stores, those located in the rural areas were the bright spots of Spring Festival sales. Starting from the week before the festival, their sales potential was fully unleashed. According to YOLO’s overall sales figures in January, the brisk sales of home appliances in its rural stores were not dampened by the close proximity of New Year’s Day with the Spring Festival, and sales peaked throughout the 13-22 January period. Sales at YOLO stores in Nanhui, Fengxian, Jinshan, Chuansha, Jiading, Songjiang, Qingpu and Qibao districts as well as the three stores in Chongmingdao surpassed those at its urban stores, recording their highest sales of the year. Analysis of sales from 13 January to New Year’s Eve (22 January) shows that the sales of YOLO’s 40 or so rural stores during this period exceeded the total sales of its urban centre stores, accounting for over 60% of the company’s overall sales.
This year, small home appliances priced between Rmb100 and Rmb150 emerged as the top choice for Chinese New Year goods. Small appliances ranging from cheese maker, soy milk maker, toaster to heater, steamer, humidifier and hair dryer, whether purchased for own use or for gifts, were the most saleable items this year. In addition, mini-sized electric warmers such as hand warmer, leg warmer and heat pad which are both portable and practical also ranked high on the list of Spring Festival gifts.
Year of the Dragon gold bars sell hot
In this year’s Spring Festival, sales of gold and silver jewellery, watches and food grew 24.6%, 22.9% and 15.4% year-on-year respectively. The commission of commerce in various districts reported that Year of the Dragon gold bars sold like hot cakes. Festival sales of jewellers Tianbaolongfeng, Yong’an, Laofengxiang, and Laomiao’s Jiading store and Chongming Nanmen store rose 61.8%, 38.9%, 31%, 17.2% and 16% year-on-year respectively.
In sum, the overall consumer market in Shanghai during the Spring Festival in 2012 has the following characteristics: sales volume of new electronic products (e.g. 3D TV, iPad, iPhone) jumped markedly; sales volume of garment, gold jewellery and food rose steadily. Moreover, information shows that in tandem with the growth in floating population, total consumption of sub-city centres in rural areas is accounting for an increasing share in Shanghai’s consumer market, and it also has much room for development.
(HKTDC Shanghai Office)