Author | Edited by Cao Shuangtao | Inscribed by Yang Bocheng | IC Photo
As the first Spring Festival of the Year of the Rabbit after the epidemic is fully released, its status is an important observation port in the post-epidemic era. For better or worse, it’s about long-term confidence.
The holidays are over, and various data are released during the Spring Festival. On the whole, the pessimism has been swept away. Taking the tourism industry as the hardest-hit area in the past three years as an example, during the Spring Festival holiday, the number of domestic tourists and tourism revenue were 308 million and 375.84 billion yuan, respectively, a year-on-year increase of 23.1% and 30%, respectively, and recovered to 8.86 billion in the same period in 2019. % and 73%, higher than the previous New Year’s Day 42.8% and 35%.
Source: Ministry of Culture and Tourism
As for popular scenic spots in many places across the country, scenes of “crowded people” have emerged again. Taking Huangshan in Anhui as an example, on the third day of the Lunar New Year this year, Anhui Huangshan Scenic Area received 34,385 tourists that day, setting a new record for the number of tourists received in a single day during the Spring Festival holiday since 2018. The surge in the number of tourists has also caused many tourists to go down the mountain from 12:00 noon to 7:00 p.m., and the scenic spot has to take control measures to intercept and divert traffic.
Source: Management Committee of Huangshan Scenic Area
In fact, this situation does not only occur in the tourism industry. The recovery intensity of chain restaurants in cities during the Spring Festival holiday has reached 126% of the level in the same period in 2021, which is higher than the 118% recovery intensity of tourism consumption. As of the seventh day of the Spring Festival holiday, the box office of movie theaters across the country increased by 8.4% year-on-year, significantly better than the -48.8% on New Year’s Day, and returned to 111% of the same period in 2019. The total number of tickets sold increased by 8.8% year-on-year, returning to the level of the same period in 2019 94% of.
Source: China National Financial Securities Research Institute
Source: Maoyan Movie
And behind these “retaliatory” consumption, it also brings us more cold thinking. What is the Spring Festival consumption in the sinking market? How is it different from high-tier cities? During the Spring Festival holiday, DoNews visited many counties in China, and conducted in-depth exchanges with practitioners and consumers in different industries in the counties. While trying to restore the real Spring Festival consumption in the sinking market, it also gave us a deeper understanding of the sinking market. more thinking. 01．
It is difficult for prefabricated dishes to enter the county for New Year’s Eve dinner, and gift box consumption is still a big part
As the highlight of every family’s Spring Festival, the New Year’s Eve dinner contains the beautiful meaning of family reunion, saying goodbye to the old and welcoming the new. The e-commerce platform that smells the wind will naturally not let go of this opportunity to boost performance. E-commerce platforms such as JD.com, Hema, Meituan, and Dingdong Maicai have used different methods to seize the New Year’s Eve dinner market.
JD.com assisted the latter in boosting sales by giving all-round support to the pre-made New Year’s Eve dinner brand drainage and after-sales logistics; Hema previously launched local dishes and competed through differentiation. However, it should be pointed out that unlike users in high-tier cities who have a high demand for New Year’s Eve dinners, consumers in county towns are not interested in pre-made New Year’s Eve dinners.
Source: Hema
Among them, Zhao Ming from Shenxian County, Liaocheng City, Shandong Province told us that this year’s New Year’s Eve dinner at home mainly consists of dumplings, a must-eat New Year’s Eve dinner in the north, as well as various Shandong dishes cooked by his parents and himself. Although the process of cooking the New Year’s Eve dinner is very hard, the family has worked hard for a year outside. Isn’t this the New Year’s Eve dinner that is pictured? It also makes me happy.
Not only the New Year’s Eve dinner in the northern counties is mainly cooked by themselves, but also in the counties in the southern part of the country. Chen Dandan from Anyue County, Sichuan Province told us that his family’s New Year’s Eve dinner is mainly based on the spicy taste of Sichuan cuisine, but it is difficult for him to accept the standardized taste of pre-made New Year’s Eve dinner.
Therefore, for pre-made dishes, if you want to use the New Year’s Eve dinner to complete more C-end education, you need to solve not only the differences in local tastes, but the greater difficulty lies in the eating habits of Chinese people. Concepts such as current system and family reunion are deeply ingrained, and this is by no means something that can be completed in a short period of time. In other words, prefabricated vegetable companies still have a long way to go on the TOC side.
In addition, although the most traditional custom of New Year greetings has been gradually abandoned in high-tier cities, it is still carried on in the sinking market.
Although in the past few years, the situation of “youth divorce” has intensified, but the relationship based on kinship is a biological connection and a social relationship, and it is a form of basic social structure that exists in reality. directly or indirectly. Even though kinship is no longer as traditional, human ontological needs still require the existence of kinship networks.
And from a deeper point of view, the basic structure of Chinese society and culture has not changed substantially, the main structure of family ethics and kinship has not undergone qualitative changes, and the logic of Chinese behavior has not changed. The post-90s and post-00s are the main body Young people’s “broken off” behavior, now also return to the kinship network as they grow older, continue to socialize, start a family, get married and have children, and manage and maintain kinship relationships like their parents.
And this also determines that in the county, all kinds of Spring Festival gift box products are still the bulk of the Spring Festival consumer market in the county, and retailers in the county will naturally not miss this opportunity. Take Funan County, Anhui Province as an example. In addition to several large supermarkets filled with various New Year gift boxes, there are also a large number of New Year products piled up in front of the entrances of small supermarkets at the township level.
Regarding the sales of gift boxes for this year’s New Year’s goods, Zhu Yong, the owner of a local supermarket, told us that due to the increase in the number of local returnees this year and the fact that there has not been a second round of large-scale infections, it is not too much for everyone to go to relatives’ homes for New Year’s greetings. Many concerns have driven the growth of sales of new year gift box products in the early stage.
However, he also found that local consumers have a higher degree of recognition of regional baijiu. The local baijiu brands in Anhui Province are mainly Gujing Gongjiu and Xuanjiu, and these brands are also the first choice for consumers when buying baijiu. At the same time, for some non-famous and even some brand-name New Year gift boxes, the overall sales are actually not bad. This is mainly because consumers in the county are highly sensitive to prices, and the prices of these products can meet their needs.
Unlike some new year gift boxes that have strict price control by manufacturers, these non-famous brand new year gift boxes have almost no price control, which also allows merchants to have more profit margins, and they are more willing to sell these products.
Zhu Yong went on to say that since the New Year’s gift box products have a strong sales timeliness, and this year’s time for returnees to return to the city to work has been advanced to the fifth day of the first day, which also makes the current New Year’s gift box products in supermarkets The inventory squeeze is very serious. Although some gift boxes can be solved by dismantling and retailing, the problem is that snacks like the three squirrels are facing young people, and the core consumer groups in the county are mainly It is mainly middle-aged and elderly people. How to destock these products is also a headache for me. 02．
Is the market sinking really a good medicine?
In fact, practitioners in the coffee industry in the county have the same anxiety as Zhu Yong. After entering the 25th day of the twelfth lunar month, due to the increase of young people returning home in many counties, this also ushered in a surge in performance for coffee brands that have laid out in the sinking market.
Take Ruixing Coffee located in Guozhen Plaza in Jieshou City, Anhui Province as an example. Around 1:00 noon on the first day of the Lunar New Year, the local store was crowded with customers who came to buy coffee. Basically need to wait more than 20 minutes. The situation of Starbucks and Ruixing in the Hanlin Plaza store in Taihe County, Anhui Province is basically the same. During the Spring Festival, the waiting time for a cup of coffee is almost 30 minutes.
However, this short-term increase in customer flow did not last long. We visited the two stores again on the sixth day of the twelfth lunar month and found that the customer flow in the store had plummeted, and there were only a dozen customers dining in the store. There are not many takeaway boys who come to pick up takeaway orders.
In fact, the reason for this situation is that, unlike the high penetration rate of coffee culture in first-tier cities, due to the lack of middle class in the county, the work intensity is average, and wage income is generally not high, this also makes the current coffee culture in the county The penetration rate is very low. And with the population flow of returning youths during the Spring Festival, the performance of these stores is naturally highly volatile.
However, it should be pointed out that due to the lack of momentum in the economy of many counties in the central and western regions of China, the lack of industrial chains, and the urgent need to improve the business environment, it may be difficult to improve the outflow of young people in the counties in the short term. The middle-aged and elderly people in the county not only find it difficult to accept the bitterness of coffee, but also their daily communication is more through wine culture than coffee.
When these problems are passed on to coffee brands, it means that they will face greater pressure to truly run through the single-store profit model in low-tier cities. Especially for some stores that follow the franchisee model, it is very likely that the franchisee will continue to lose money in the future, and then terminate the contract with the coffee brand. Coffee competition in first-tier cities has become more intense.
In fact, this kind of problem in the coffee industry is just a microcosm of the problems encountered by many consumer products and business models in the layout of the sinking market.
Taking new energy vehicles as an example, although the country has indeed issued many policies to stimulate the development of new energy vehicles in county towns, consumers in county towns do have a demand for purchasing new energy vehicles. However, the lack of charging piles in a single county has dissuaded a large number of consumers who want to buy new energy vehicles. And we also found in our visits in many counties that traditional gasoline vehicles are still the mainstay in the local area, and new energy vehicles account for less than 1%.
Source: public information collation
It is worth noting that the increase in the penetration rate of charging piles in county towns will not be completed in a short period of time. Petrol vehicles will still be the main choice for car purchases in county towns, and this will inevitably lead to the competition of new energy vehicles in high-tier cities this year. more intense.
For example, the real-time retail business model that revolves around young people in first-tier cities is also difficult to sink into county towns.
Source: Soochow Securities Research Institute
First of all, unlike the relatively short delivery distances of first-tier cities, the delivery distances from many counties to towns in China are too long. For example, it takes about 40 minutes to drive from Jieshou City, Anhui Province to Guangwu Town, which is under its jurisdiction, which means that instant retail companies have to bear high fuel costs, vehicle damage costs, and labor costs at the same time. High-tier cities must be at least 50% higher.
Secondly, in a consumer market composed of middle-aged and elderly people, offline shopping is still their main choice. For this group of people, it is difficult for them to change their original consumption habits through market education. Relying only on the relatively small number of young people among them may not be able to share the daily operating costs evenly, and even cause instant retail companies to fall into serious losses.
Finally, compared with JD.com, although Meituan has a great advantage in the transportation capacity of the county. But at present, in the county-level market of Meituan, agents are mainly responsible for local business operations. For agents, what they pursue is to maximize their own profits, and they do not have sufficient funds to complete instant retail market education and in-depth business layout.
Obviously, when instant retail cannot expand its territory in the sinking market, this will inevitably make JD.com, Meituan and other related companies more fierce in the follow-up competition in high-tier cities. Perhaps for these instant retail companies, they need to find their own moat urgently in order to keep their market share. 03．
Consumption in 2023: strong expectations and weak reality
Judging from the Spring Festival consumption in the county this time, recovery will become the main tone of the consumer market in 2023. But we need to point out that the recovery of the consumer market this year may present a structural contradiction between strong expectations and weak reality.
First, after communicating with many small and medium-sized enterprise owners in the county, we found that in the past three years, the business of many small and medium-sized enterprises has been facing severe shrinkage, and more than 90% of small and medium-sized enterprises are basically at a loss. Even if the epidemic is fully relaxed and the supply chain is restored, it will take some time for their confidence in the future to be restored, and large-scale expansion is not considered in the short term. Obviously, when the owners of small and medium-sized enterprises make this choice, it will inevitably affect the wage income of consumers this year.
Second, during the Spring Festival holiday in the sinking market in previous years, many returnees would gather to play cards. But this year, this situation is rare. The reason why many people do not choose to play poker is that there is not enough food left in their pockets. This is also the reason why returnees in county towns will return to high-tier cities to work in advance this year.
Third, the three-year pandemic has caused an imbalance in the public’s security mentality, which cannot be reversed in a short period of time. This is particularly evident in the real estate consumption market. During the week of the Spring Festival holiday, the transaction volume of commercial housing in 30 large and medium-sized cities fell by 82.2% year-on-year, which was much lower than the -40.9% year-on-year during the National Day holiday. Real estate sales remained sluggish.
Source: wind
From the perspective of each city, the transaction volume of commercial housing in the first-tier cities has fallen the most, with a year-on-year decrease of 97.6%.
Second-tier and third-tier cities fell by 82.7% and 32.6% respectively. In fact, this situation does not only occur in high-tier cities, and real estate sales in county towns are not optimistic.
Source: wind
A real estate salesperson from Shenqiu County, Henan Province told us that during the Spring Festival holiday this year, the number of people who came to view houses fell by at least 30% compared with the same period last year. Everyone is still cautious about buying houses.
Therefore, the existence of the above-mentioned problems, combined with the impact of the economic downturn, will make the recovery of the consumer market this year show a typical structural differentiation. The recovery of spiritual and life rigid consumption represented by tourism, movies, and catering is expected to accelerate, while the recovery of other non-rigid consumption will be extremely slow.
Of course, for the tourism, film, and catering industries, related companies must also make preparations in various aspects during the entire recovery process. After all, the minds of consumers in the post-epidemic era are different from those in 2019.
After the cold winter is spring, and now the recovery of consumption during the Spring Festival has also made many industries feel the warmth of spring in advance and regain everyone’s confidence. But more importantly, how to play a series of “combined punches” to participate in market competition, keep the company’s performance growing, and build investor confidence is the key. And in this series of changes, a new business society will come ahead of schedule.
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