China seeks spike in travel and shopping following pandemic

01-05-23

• China is reportedly seeing a sharp increase in post-COVID travel and consumer activity.

A Sunday (April 30) report by Bloomberg News, citing data from local media and the government, said that 19.7 million rail trips were made in China on Saturday (April 29), the first day of the country’s five-day Labor Day holiday.

Meanwhile, retail and catering companies all saw sales leap 21% compared to last year, while food chains recorded a 37% increase in revenue, clothing sales rose 21% and sales of jewelry, cigarettes and alcohol all climbed 17%.

The report notes that many people in China were making their first trips since the pandemic after the government lifted its COVID restrictions in December. However, how much of a recovery this increase will provide is not clear, as China is experiencing lowered income growth and high unemployment among young workers.

The news comes two weeks after figures from China’s National Bureau of Statistics showed the country’s economy growing 4.5% during the first three months of the year on the back of increased consumer spending.

As PYMNTS wrote, retail sales of consumer goods were up 5.8% year over year after a 2.7% decline the previous quarter as shoppers increased spending on everything from clothing to food to jewelry.

Online retail sales climbed 8.6%, the statistics bureau said, accounting for nearly a quarter of all retail sales during the quarter.

The last month has also seen the fortunes of a number of international luxury retailers rise and fall in connection with the resumption of shopping in China, the world’s third-largest luxury market.

For example, Louis Vuitton owner LVMH on April 12 reported a 17% increase in sales for its first quarter, driven in part by Chinese consumers returning to stores following the lifting of their country’s strict pandemic restrictions.

Addressing analysts during an earnings call, Chief Financial Officer Jean-Jacques Guiony said the company was “extremely optimistic” about its prospects in China for the near future, adding that its first-quarter numbers “bode well for the rest of the year.”

Meanwhile, upscale German eCommerce company Mytheresa has said it wants to target shoppers in China’s luxury space.

In a recent Reuters interview, CEO Michael Kliger said the company will begin employing personal shoppers and staging in-person events as it tries to make a name for itself in a marketplace dominated by firms like Alibaba.

“The company [globally] has grown 20%-plus in recent years, and our expectation from China in coming years is double that,” Kliger said. “Because we are so small here, this doesn’t even mean we are going against the big guys — it’s still a very special customer we focus on.”