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Christmas is not a national holiday in China, but it is nevertheless becoming an increasingly important time for consumers and retailers alike. According to the Retail Sales Index for China, not only is there an uptick in spending around the Christmas period, but it also constitutes the biggest month-on-month rise of the whole year.
What is surprising about the Chinese Christmas is that it is having such an effect on retail sales despite only being celebrated by a small section of the population, mainly young people and also families with young children. It is a popular celebration on student campuses, sometimes even encouraged by the educational establishments as an aid to students learning English, where it is seen as a good excuse to enjoy time with friends and go shopping (the religious significance is barely noted). Young children, meanwhile, have begun to be seen hanging up muslin stockings in readiness for a visit from ‘Dun Che Lao Ren’, the Chinese equivalent of Santa Claus. Consumers aged 40 and upwards are much less likely to make Christmas an event, but this period also constitutes the beginning of preparations for the universally celebrated Chinese New Year, which also drives extra spending.
Christmas in China has been gaining momentum over the past 15 years or so. There was some mainland tradition for the festival coming from Western missionaries in the early part of the 20th century, but it was then suppressed by the Communist government. Since China became more liberalised, however, retailers have seized on Christmas as a retail opportunity, but it is also likely that there has been a significant influence from Hong Kong since it was returned to China in 1997.
As a British protectorate, Christmas was a well-known celebration in Hong Kong and remains a public holiday there (as it does in another former European colony, Macau); and Hong Kong trends are generally seen as very cool and modern in mainland China. Since 2003, visits to Hong Kong by mainland Chinese began to be strongly encouraged by the Chinese authorities to help Hong Kong recover from the economic effects of the SARS outbreak, making Hong Kong an extremely important and influential shopping destination, so the knock-on effect of Christmas retail promotions will be seen in mainland China.
Christmas may not have the profile of other Chinese retailing periods such as Lunar New Year, but those who do celebrate it, do so by buying gifts. For other Chinese festivals such as Chinese New Year, gifting takes the form of money in envelopes, money which might not be spent immediately, or might just be saved. Directly after the Christmas period spending peak, spending drops right back down – not only are Chinese consumers not spending money on presents for New Year, younger consumers with lower levels of savings in particular may even be having to conserve their cash in order to be able to fill their gift envelopes. For this reason, Christmas has arguably become a more important festival for retailers than the New Year, although there are other festivals,
such as the second ‘Golden Week’ holiday in October which retailers also target via major sales. In addition, because Christmas is not officially a public holiday, retailers can maximise retail opportunities through extended opening hours.
The Retail Sales Index shows how important December spending is becoming, whether it is for Christmas presents or New Year preparations, with an average 22 percentage point rise compared to November sales over the past 10 years.
Although December’s leap in sales growth is close to the levels seen in more traditional Christmas-reliant markets such as the UK and the US, China’s pattern of several key sales periods over the year is more sustainable than the situation in the UK, where Christmas is the single major peak for sales and therefore a make or break time for retailers.