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Consumer spending in China during the Golden Week holiday rose indicating the path to steady economic growth and elevated consumer confidence.
As reported by the Ministry of Commerce, retail and restaurant sales in China were 4.9% higher than last year’s Golden Week, and total sales were recorded at 1.6 trillion yuan. This year however benefited from the extended holidays lasting eight days, since it included both the Mid-Autumn Festival and the National Day. The strong holiday spending could boost retail sales to rise by 3 to 4 per cent in October, compared to last year.
As for online sales, Alibaba has reported that the sales of its primary e-commerce online shop for foreign brands, Tmall Global, was up 79% for the first seven days of October, compared to the same period in 2019.
Since tourists are not able to travel abroad, the number of people travelling across China has reached 637 million people, with the related revenue exceeding 460 billion yuan. Moreover, tourists have turned their attention especially to the domestic tropical island of Hainan. Tourist visits have risen more than 40%, while the duty-free sales have more than doubled compared to last year. The records report 1.04 billion yuan in sales, which is approximately a 150% increase from last year.
The data from Trip.com further supports the notion of rising demand in domestic tourism. Hotel booking gross merchandise value more than doubled in October from September, with four- and five-star hotels accounting for almost half of the reservations. Additionally, tourists tend to prefer longer holiday periods, with the number of guests who stay in a hotel for seven days or longer during Golden Week being higher compared to last month.
With the rise of domestic demand, the prices for a variety of products have seen a dramatic increase in recent months, which undoubtedly indicates a strong recovery from the poor start of the year. The service consumption will drive the economy in the incoming months, given that so far exports, infrastructure, and property have been the key factors in China’s rapid recovery. The data shows consumers in the world’s second-largest economy have a high level of confidence, with the expenditure numbers rising amidst a still volatile environment.
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