By
with contributions from Jennifer Cardenas
 on February 23, 2010

BEIJING — Chinese retailers appeared to cash in over the Lunar New Year holiday, typically the country’s biggest shopping season of the year.

The Ministry of Commerce reported retail spending across the country increased 17.2 percent over the Feb. 13 to 20 holiday period from a year ago. In 2009, sales registered a year-on-year increase of 13.8 percent.

Still, retailers in Beijing said they’ve had to work harder to lure holiday shoppers. While the most popular and trendy malls in China’s capital were filled during the weeklong holiday, not everyone was buying.

Several developments have nicked away at the Chinese New Year’s position as the primary driver of the country’s retail sector. First, Beijing’s retail market has become diversified and fragmented as vast new malls have taken shape across the capital in the past three years. Take the example of Vero Moda, the Danish women’s retail chain geared at office workers that has established a solid presence throughout China. At one of the chain’s Beijing outlets, the manager said the New Year holiday was not a make-or-break event for them.

“This year’s holiday wasn’t as good as last year,” said Wang Ting, manger of Vero Moda in the Pacific Century Plaza, one of Beijing’s more established malls. “It isn’t that important for the business because our customers are white-collar workers and most of them are out of town during the holiday.”

A newfound appreciation for gift-giving at Christmas also has chipped away at the Lunar New Year retail binge in major cities such as Beijing and Shanghai, retailers report. Christmas is an easier time to convince people to buy, while the New Year is generally considered family time.

“The mall has more sales promotions at Christmas than Spring Festival [or Lunar New Year],” said Wang. “Spring Festival is a traditional holiday, when people like spending time with families at home or visiting temple fairs.”

“This year was almost the same as last year,” said Xu Wenshan, a salesperson at the Swatch store in the Village at Sanlitun, one of Beijing’s most popular new malls. “Business is up about 50 percent and there are more customers than usual.”

Xu said new products sold particularly well during the holiday and the strong sales should set a trend for 2010.

At Zara in The Place mall, meanwhile, sales were even better than during Lunar New Year of 2009. “The New Year is the beginning of a new season, and we can learn from the latest wave of customers what the news is of the market,” said Zara manager Jia Kun.

The Shanghai Municipal Commission of Commerce reported sales within the nine central districts of Shanghai and the Pudong New District achieved record sales of 2.3 billion yuan, or about $337 million, during the Feb. 13 to 19 period. That figure represents an increase of more than 21 percent from the previous year.

Cathy Hau, the deputy general manager of luxury mall Shanghai Times Square on Huai Hai Road, said this year’s holiday sales showed an increase in the single digits from 2009.

“Because the Chinese New Year came late this year in February, while it arrived in January in 2009, this year’s February sales were a little muted,” she said. “The single-digit increase during Chinese New Year doesn’t really show the amazing sales growth our retailers have experienced this winter season that began just before Christmas.”

Hau said some of Shanghai Times Square’s international leather goods brands performed extremely well and reported more than 50 percent sales increases during this Chinese New Year holiday.

Jonathan Seliger, the managing director of Richemont’s Alfred Dunhill Trading Co. Ltd. in Shanghai, said business leading up to Chinese New Year was quite strong.

“We were very pleased with the higher-than-usual foot traffic during the first days of the public holiday, which is traditionally a quiet time [for retail],” he said.

Meanwhile, in Hong Kong, urban apparel group I.T., which distributes labels such as A.P.C., Viktor & Rolf and Visvim, said it was encouraged by its sales during the holiday period. The company feels the economy has picked up in the first part of this year, a representative of the buying team said, citing particular success with fur, leather, lace and denim items.

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