The record-breaking nine-day Chinese New Year holiday has jolted the retail market back into action, offering early signs of a gradual recovery for luxury retail.
According to data from the Chinese investment bank CICC, consumption and travel data have “substantially improved.” Average daily sales at major retailers and hospitality groups rose 8.6 percent for the first four days of the holiday compared to the same time last year, according to data from China’s Ministry of Commerce.
“The rise of ‘reverse Spring Festival travel’ — with people choosing to stay put rather than return to their hometowns — has helped revive spending in mature commercial districts, while more young consumers are opting to travel during the holiday in search of a festive atmosphere,” noted the CICC report.
The longest festival of the year, this year’s Spring Festival lasted for nine days from Feb. 15 to 23.
According to Bernstein, more than 50 percent traffic growth was observed at 10 luxury malls across four Chinese cities, including Shanghai, Beijing, Chengdu and Hong Kong in the lead-up to the Chinese New Year.
“Chinese consumers seem to be on a firmer path to recovery, albeit spread unevenly across brands,” Bernstein observed.
Bernstein noted that traffic during the holiday was largely driven by “a small group of brands” that included Chanel, Louis Vuitton, Dior, Burberry and Gucci. The data was based on traffic counts observed on Feb. 24 and 26.
This year’s notable hard luxury winners included Tiffany & Co., Bulgari and Cartier, while notably lower traffic was observed at Prada, Hermès and Saint Laurent.
Bernstein noted that creative updates at Chanel and Dior, and a strategic reset at Burberry, have created excitement and renewed interest among discerning Chinese shoppers.
“Kering, in contrast, has yet to fully kick off its creative reset at Gucci. At Prada Group, Miu Miu continues to grow while the main brand treads water. Lower traffic at Hermès may well hint that noisier neighbors are starting to take their toll,” Bernstein added.
“Mainland Chinese shoppers have started to return to Hong Kong, driven by favorable currency, political tensions with Japan, and purchase incentives provided by shopping malls. Strong growth in Chengdu also matches observations made last October,” the report continued.
According to data from the National Immigration Administration, more than 17.7 million Chinese tourists traveled abroad during the holiday, a 10 percent increase compared to last year.
Thailand has reclaimed the number-one spot for outbound destination due to its warm weather, while bookings to Russia doubled due to visa waivers set in place last December.
With the “becoming Chinese” social media phenomenon, otherwise known as “#ChinaMaxxing,” where netizens adopt lifestyle habits — such as drinking hot water — common in China, the draw of festive tourism combined with relaxed visa rules continued to lure in inbound visitors.
According to local media reports, flight bookings to China by foreign visitors during the Spring Festival surged more than fourfold year-on-year.
According to data from Fliggy, the Alibaba-owned online travel booking site, Beijing, Shanghai, Guangzhou and Chengdu ranked among the most popular first-stop destinations, led by visitors from South Korea, Vietnam and Singapore.
According to Qunar, another local online booking platform, the ancient cities of Datong, Lhasa and Yining ranked highest in travel searches among foreign visitors seeking an immersive experience of traditional local culture.
