Chinese New Year, the festival that celebrates the beginning of a new year on the traditional lunisolar Chinese calendar, started on January 22nd this year.
Since the outbreak of Covid in 2020, the Chinese population adapted to more frugal celebrations as the government imposed strict measures for domestic travel. However, following the timely removal of the zero-Covid policy in December 2022, the consumer market has revived significantly, approaching pre-outbreak levels across dining, tourism, and cultural entertainment.
With people eager to travel after several years of restrictions, the industry that has benefitted the most from China’s open-door policy is tourism. During the Chinese New Year holiday, 308 million people traveled domestically, a year-on-year increase of 23.1%, recovering to 88.6% in the same period in 2019; the domestic tourism revenue totaled 376 billion yuan (51 billion euros), a year-on-year increase of 30%. Most eager, according to data from Fliggy, China’s leading travel platform, were younger people between 20-30 years old, who significantly contributed to the year-on-year increase and showcased the desire for travel. However, despite strong recent growth, the tourism industry has not fully recovered to 2019 levels, mainly because of a new Covid outbreak in December.
Chinese citizens who choose international travel also increased significantly. According to statistics from Ctrip, China’s top-ranked OTA travel platform, overall orders for international travel during Chinese New Year increased by 640% year-on-year, with cross-border airline ticket orders increasing more than four times. Among them, Southeast Asia and Europe were preferred places for Chinese tourists.
Furthermore, other consumer sectors are also picking up gradually. Consumption of both necessities and luxury goods ushered in a great number of customers, indicating demand to increase living standards and quality of life after three years of quarantines and lockdowns. During the Chinese New Year, shopping areas with famous brands from China and abroad became extremely busy, with offline consumption recovering and growing exponentially. In Sichuan Province alone, sales in well-known shopping malls such as Taikoo Li reached 4.6 billion yuan (633 million euros) during the Chinese New Year Golden Week in 2023, recovering to 108% of the same period in 2019.
Meanwhile, online consumption, which has maintained steady growth throughout Covid, is showcasing a continued positive trend. From the Chinese New Year’s Eve to the sixth day of the Lunar New Year, RT-Mart’s Youxian, an online supermarket, saw APP orders increase by 40% year-on-year. Followingly, TikTok China launched “TikTok Supermarket” during Chinese New Year, and claimed that if customers pay before 16:00, they can enjoy “same-day delivery” service, entering the market to compete with e-commerce giants like Alibaba and JD.com. In this post-epidemic era, quality consumption has become a trend, with imported carrion, imported wine, and other fine Chinese New Year goods becoming the most popular and best-selling gifts for family and friends. Ele.me, Alibaba’s online food delivery and local life service platform, shows that a number of boutique Chinese New Year’s orders have more than doubled the growth in the last month.
Overall, the Chinese New Year is a powerful engine of consumption and a window into China’s economic dynamism. Chinese people’s spending power is recovering; the Chinese economy is reviving. At the Central Economic Work Conference at the end of 2022, economists indicated China will implement more preferential policies to expand market access for foreign investment. In conclusion, the increased spending power shown by people during the Chinese New Year is a very good indicator of the positive recovery in the Chinese market. With the optimization of vaccination policies and the opening of the country’s doors, China still looks promising for the world’s second-largest economy.