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Chinese New Year consumption soars as COVID eases up

Retail and catering sales increase 29%, and moviegoers set box office record

China's consumer spending is expected to grow 7% during the year of the ox as the country recovers from the coronavirus.   © Reuters

SHANGHAI -- Chinese consumer spending soared during the Lunar New Year holidays, especially at online retailers, though travel expenditures were subdued due to COVID-19-induced restrictions.

Total retail and catering sales from Feb. 11 to Wednesday increased 29% from last year's holiday period to 821 billion yuan ($128 billion), the commerce ministry revealed on Wednesday, as many restaurants in cities offered special takeout fare for customary New Year's Eve reunion dinners.

Online sellers took in 120 billion yuan, 15% of all consumer spending during the period, with online catering sales jumping over 130%, as many Chinese refrained from visiting their hometowns.

Cainiao, the logistic arm of Alibaba Group Holding, said it noticed a trend in which city dwellers bought and sent gifts to their families in rural areas and vice versa.

With many Chinese heeding the government's call to hold off on travel during the important Chinese New Year vacation period, during which cities usually empty out, Cainiao allocated 200 million yuan to reward its more than 100,000 delivery workers.

Airlines, railways and other tourist transit companies took a hit, carrying 77 million passengers during the first six days of the holiday travel season, the transport ministry said. This represents a 43% decline from last year and a 76% plummet from 2019.

Domestic airlines carried 3.6 million passengers during the first week of the holiday travel season compared to 13.2 million last year, data from air travel news site cnair.com shows. The official Lunar New Year travel season is 40 days long, and this year began on Jan. 28.

The total number of flights declined 55% to 48,233 during the period, and there was an average daily cancellation rate of 54% as strict mandates, such as showing proof of a COVID-free test result, were imposed.

Cinemas across the country were busy, however, as movies whose debuts were postponed last year made it to the big screen. Titles such as "Detective Chinatown 3" and "Hi, Mom" helped to deliver 7.5 billion yuan in box office sales in the week through Wednesday, eclipsing the old record of 5.85 billion yuan, set in 2019, according to film data provider Maoyan.

Even so, overall spending on retail and catering did not meet expectations due to the COVID-19 situation, China Galaxy Securities said in a report on Thursday. "Consumer spending is expected to grow about 7% for the year subject to a gradual recovery from the pandemic," the report says.

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