As Hong Kong businesses, notably the retail, travel and services sectors, ponder over when and if they would eventually be out of the woods from the coronavirus shock, consumers’ post-pandemic response on the Chinese mainland may offer a clue as to what form a much sought-after economic revival might take.
If the latest Chinese consumer bearings are anything to go by, consumption has shown a steady recovery trajectory rather than a “retaliatory boom” as many have projected. The outbreak has left a profound impact on consumers’ spending habits and consumption patterns.
The tourism business, which was virtually brought to its knees at the height of the outbreak on the mainland in the past two months, sprang back to life in April, probably driven by huge pent-up demand, and is expected to pick up further during the upcoming five-day Labor Day holidays next month.
To stimulate travel and consumption after the coronavirus outbreak, many parks, hotels and travel service providers are promoting discount products with prices hitting 10-year lows
Li Xuepeng, Marketing head for short-distance travel at Trip.com
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Trip.com Group — currently the largest online travel agency on the mainland — has given an inkling of what the near-term future may hold. In a recent report, it expects the May Day holidays to hit the peak of this year’s domestic tourism market — doubling the passenger volume seen during of the Qingming Festival (tomb sweeping festival) which fell on April 4, and claw back about half of the last Labor Day’s passenger flow of 195 million.
Over the three-day Qingming Festival — the first public holiday after businesses resumed following the pandemic — tour bookings skyrocketed 366 percent on a weekly basis, while transportation orders surged more than 50 percent, and hotel bookings were up 60 percent.
A unique feature of the reviving travel trend concerns the high-quality taste of consumers, with more than half of the travelers opting for five- or four-star hotels. Travel agencies were quick to accommodate as they put up top-notch but smaller trips on their menu, such as inclusive tours for three to six people.
With outbound travel still not an option for now, deep-pocketed tourists are going after high-end domestic leisure products, said Li Xuepeng, marketing head for short-distance travel at Trip.com.
Another crucial demand is for high hygiene standards, offering travel companies a golden opportunity for offering high-quality options.
“To stimulate travel and consumption after the coronavirus outbreak, many parks, hotels and travel service providers are promoting discount products with prices hitting 10-year lows,” said Li.
Cashing in, about 50 cities on the mainland have issued government coupons to stimulate consumption.
Li said April and May, especially the Labor Day break, are the best time to offer the best bargains. However, he reminded business operators to restrict bookings to within their capacity as “consumers’ experience can’t be discounted,” he said.
Scenic Huangshan Mountain in Anhui province, famed for its pine trees and granite peaks, drew a crescendo of 20,000 visitors earlier this month, forcing one of the country’s top tourist attractions to close temporarily, after the local government waived 190-yuan admission tickets for two weeks.
The strong growth in travel bookings reflects the public’s thirst to venture out after being confined to their homes in the past two months. A report by the China Tourism Academy said tours of popular attractions on the mainland during the three-day Qingming Festival were still some 60 percent lower than the same period last year, while tourism-related revenues saw a year-on-year decline of nearly 81 percent.
On the catering side, orders placed online continued to be a preponderant channel for most food-and-beverage establishments as many of them are pinning their hopes on online platforms for long-term investment.
In Shenzhen, milk tea maker Nayuki’s commodious stores with modern designs used to be popular gathering spots for the younger flock but, due to the coronavirus outbreak, online orders have become the norm, registering a 127-percent surge in orders amid the health crisis.
Nayuki’s founder Peng Xin said the brand has been pushed out of its comfort zone and is now totally embracing the new channel. So far, about 98 percent of the group’s 350 off-line stores nationwide have gradually resumed business.
She said the group continues to boost its online business, launching its official e-shop on T-mall in mid-March and attracting tens of millions of visits.
Nayuki has also teamed up with livestreaming players, such as Viya with tens of millions of followers and Luo Yonghao, the founder of smartphone brand Smartisan Technology. On Luo’s livestreamed e-commerce debut on April 1, Nayuki sold more than 100,000 milk tea vouchers, reaping 9 million yuan in sales revenue. The group plans to come up with new products each month and will explore overseas markets this year, said Peng.
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First- and second- tier cities on the mainland have seen some “retaliatory consumption”, but Yu Bo, an analyst with market consultancy iResearch, believes it has yet to become mainstream.
According to a research report by iResearch, about two-thirds of people surveyed said they would increase spending or have not been affected by the pandemic, while the others said spending may have to be cut even after the virus is gone.
The report predicted it might take six months or so for consumption confidence to return to the 90-percent pre-pandemic levels.
From the long-term perspective, Yu expects consumption in the exercise, healthcare and education sectors to even exceed levels before the outbreak.
He said the pandemic has exerted a huge impact on consumption habits, structure and channels, and it will continue. The crisis has heightened a sense of risk control among enterprises, which will now pay greater attention to creating a brand image and opening up new marketing channels.
