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2015 Chinese New Year Sales: Beijing
11 March 2015
According to figures released by the Beijing Municipal Commission of Commerce, the combined total sales of the 120 leading commercial enterprises in the city during this year’s seven-day Spring Festival period reached Rmb4.91 billion, an increase of 8.5%. While retailers strengthened their marketing strategies to bolster sales, e-commerce operators also went all-out to win over customers, with many industry players offering normal delivery service during the holiday period.
Figures from the Ministry of Commerce show that, from New Year’s Eve to the sixth day of the Chinese New Year, the total sales of retail and catering enterprises nationwide amounted to Rmb678 billion, up 11% over the Spring Festival golden week last year. At the same time, year-on-year growth dropped 2.3 percentage points. HKTDC's mainland offices in Beijing, Dalian, Qingdao, Xi'an, Shanghai, Hangzhou, Nanjing, Wuhan, Chongqing, Chengdu, Guangzhou, Fuzhou and Shenzhen, made market visits to a number of high-end, mid-high end and mid-range shopping centres in their respective cities a week after the Chinese New Year (19-25 February 2015) in order to establish just how holiday sales fared this year.
All three department stores visited by HKTDC’s Beijing Office registered lower sales when compared with last year. This was seen as largely down to two factors - reduced spending power and an increased challenge from e-commerce operations.
It is clear that the fast growing market share of e-commerce operators has had a real impact on the sales of physical stores. According to the head of the Yansha Youyi Shopping City on Liangmaqiao Road, over the last three years, e-commerce has enjoyed exponential growth. While online shopping offers great convenience to consumer, it is also seen as having a number of particular weaknesses, notably in terms of product quality. In terms of future prospects, it is thought that an operation mode that combines online and offline option is likely to become the norm for many physical stores.
According to senior staff at the Beijing Capital Retailing Group’s Xidan Department Store, e-commerce is still evolving and will need to undergo further restructuring and regulation. They believe it will not entirely supplant sales at street-level shops, seeing it as, ideally, complementing the high street and forming part of a rationally structured marketplace.
In other developments, the head of Chongwenmen’s Beijing New World Department Store advocated the offer of red packets during the Spring Festival period as a worthwhile promotional initiative. This practice, a good example of experiential marketing, not only attracts customers, but also incentivises consumers to shop during the festive period.
The following is summary of the sales situation of three leading Beijing stores:
| Store | Yansha Youyi Shopping City (Liangmaqiao Store) | New World Department Store (Chongwenmen Store) | Beijing Capital Retailing Group Xidan Department Store |
| Grade | High-end | Mid- to high-end | Mid- to low-end |
| Top-selling Items (up to 10 categories) | Menswear, ladies’ wear, footwear, tonic health supplements, cosmetics, watches, domestic kitchenware, household beddings, jewellery, food (cigarettes, liquor, tea) | Young ladies’ fashion, clothing for mature women, gold jewellery, cosmetics, sporting goods, children’s wear, menswear | Sporting goods, jewellery, watches, cashmere, ladies’ wear, young fashion, products for the middle-aged and elderly, footwear, down garments |
| Price Range | Rmb200-650,000 | Rmb780-3,000 | Sporting goods: Rmb200 - 3,000 Jewellery: Rmb200 - several hundred thousand yuan Watches: Rmb200 - several hundred thousand yuan Cashmere: Rmb200 - 3,000 Ladies’ wear: Rmb800 - 20,000 Young fashion: Rmb500 - 2,000 Products for the middle-aged and elderly: Rmb200 - 1,000 Footwear: Rmb500 - 1,500 Down garments: Rmb200 - 2,000 |
| Average Spending per Customer | Rmb2,600 | Rmb864 (average transaction value) | Sporting goods: Rmb500 Jewellery: Rmb1,000 - 20,000 Watches: Rmb700 - 30,000 Cashmere: Rmb1,000 Ladies’ wear: Rmb1,200 Young fashion: Rmb800 Products for the middle-aged and elderly: Rmb400 Footwear: Rmb700 Down garments: Rmb800 |
| Year-on-year Sales Growth | -30% | -6.4% | Sporting goods: 39.01% Jewellery: 7.33% Watches: -14.13% Cashmere: -11.69% Ladies’ wear: 20.4% Young fashion: -12.68% Products for the middle-aged and elderly: 17.98% Footwear: 0.32% Down garments: -14.37% |
| Promotional Tactics | Mainly gifts with purchase | 30% discount on spring fashion (selected items) and clearance sale of winter collection | Sporting goods: Offering latest styles to attract young customers, and “weekend only” promotions of brands (Adidas, Nike) Jewellery: Main attractions include discounts on gold and special priced jewellery sets Watches: Special prices and discounts on domestic brands, but no big discounts on imported brands Cashmere: Bundled promotion of a large number of cashmere brands, big discounts and special prices are becoming the trend Ladies’ wear: Sales promotion by way of discounts on new styles and special offers Young fashion: Promotion of winter collection and new arrivals of spring fashion, clearance sale of outdated styles at special prices Products for the middle-aged and elderly: Promotional activities for a whole range of products for the middle-aged and elderly, offer of clothing at special prices Footwear: Female customers are the main consumer group, offer of discounts during weekends Down garments: Offer of big discounts to promote a whole range of down garments, offer of gift with purchase |
| Effective Sales Outcome | As a high-end store and part of the Beijing Capital Retailing Group, this shopping centre has the trust of customers. In the two weeks before the Spring Festival and during the festival period, goods supply was sufficient to meet the purchasing needs of customers | Promotional activity of offering discounts on goods as well as gift redemption with reward points secured additional customer flow | Sporting goods: Attracting young buyers, the main target customers, with product styles and diversity Jewellery: Gift with purchase Watches: Promoting sale of high-end watches Cashmere: High quality at low prices Ladies’ wear: Price factor and bundle promotions Young fashion: Attracting young consumers and bundle promotions Products for the middle-aged and elderly: As middle-aged and elderly customers are price-conscious, big discounts attract this customer group Footwear: Attracting customers by offering big discounts and specially priced items Down garments: Sales of down garments hinge to a large extent on the weather, complemented by promotional activities |
Vivian Yu, Beijing Office
- Mainland China
- Mainland China
