The “stay put” initiative and booming Chinese consumption during the holiday
China’s retail consumption during the 2021 Chinese New Year (CNY) holiday surged as people in major cities were encouraged to “stay put” for the festival to strengthen the COVID-19 containment.1 According to data published by the Ministry of Commerce, key retail and catering revenues in China during the CNY holiday reached RMB821bn, 28.7% higher y-o-y.2 In first-tier cities such as Shanghai, 390 major local retailers – as monitored by the Shanghai Municipal Commission of Commerce – saw their revenues during the holiday soared by 120% y-o-y as most migrants stayed in the city for the festival in response to the “stay put” initiative.3
There was a strong y-o-y rebound in the 2021 CNY holiday consumption
CNY holiday weeks’ key retailers and catering revenues in China
Source: Ministry of Commerce, World Gold Council
Gold demand was similarly boosted during the holiday
Conversations with our partners in China’s gold jewellery industry mirrored the trend reported by the Ministry of Commerce and the China Gold Association: in value terms, sales of all jewellery categories during the holiday soared by 161% y-o-y and consumption of gold jewellery, bars and coins during the same period rose by more than 80% y-o-y.4
Almost all gold jewellery categories realised substantial growth on a y-o-y basis. One of the leading gold retailers in China even reported a 710% surge in its gold product sales during the 2021 CNY week y-o-y.5 This was partially due to the low base impact amid the COVID-19 outbreak during 2020’s CNY holiday.
Even so, leading gold jewellery retailers told us that sales during the 2021 CNY holiday dwarfed their 2019 levels. Main drivers of this sales boom include:
- the local gold price adjustment ahead of the holiday, which made gold products more affordable
- the tradition of hoarding gold products ahead of and during the holiday
- the “stay put” initiative, which spurred gold consumption in major cities.
In addition, gold bars and coins also attracted tremendous attention during the holiday as many retail investors took advantage of the local gold price dip ahead of the festival to enter the market for gifting and long-term saving.
Leading gold jewellery retailers’ points of sale were packed during the holiday
Source: World Gold Council
Heritage gold and 24-ct hard gold jewellery products’ sales extended their strength from 2020
Feedback from our partners in the jewellery industry indicates that heritage gold and 24ct hard gold products were their best performers during the holiday. While intricate craftsmanship and inclusion of traditional Chinese cultural elements boosted heritage gold products’ appeal, as mentioned in our Gold Demand Trends, the savings made by high-income earners from not travelling also benefited sales of these chunky and relatively more expensive products.
Meanwhile, fashionable designs, lighter weights and more affordable prices continued to support the popularity of 24ct hard gold jewellery items among young consumers during the CNY holiday. And our partners also told us that they have seen more footfall from younger consumers this CNY holiday than in previous years. With the Valentine’s Day promotion coinciding with the CNY week, sales of 24ct hard gold jewellery products were further boosted.
Other key findings
Other key from major Chinese gold market participants include:
- gold jewellery products remain the largest category in major jewellers’ inventory
- major jewellers also quoted
- policy-supported consumption growth during the holiday
- promotion of Ox-themed products
- Valentine’s Day promotion as drivers of the holiday sales boom
- many jewellery retailers also saw sizable growth in gold trade-in activities6
- young consumers (20–30 years old) favour lighter-weight pieces with fashionable designs at prices ranging between RMB500 and RMB10,000.
1 The 2021 CNY holiday started on 11 February and ended on 17 February.
2 For more information, please visit here.
3 As reported in China Daily’s news report.
4 Please visit here and here for more information about the Ministry of Commerce’s data. For more details about the China Gold Association’s report, please click here.
5 For more information, please visit here.
6 Trade-in activities happen when consumers bring gold jewellery products they own to jewellery retailers in exchange for new products. There is usually a settlement of the value differences between the old and new products as well as the labor charge.