Pan Yuming
As the curtain rises on 2023, the New Year holiday spans three days, with fireworks lighting up the night sky—either in the sky or in our hearts. The public's consumer psychology is slowly emerging from a state of hesitation, welcoming a carefree New Year holiday. Judging from the performance of the consumer market, there has been no shift to consumer silence as some had predicted due to secondary disasters. Based on public data and monitored sample changes, consumption is steadily recovering overall, with consumer confidence led by younger demographics quickly returning.
Five Characteristics of the Consumption Recovery
First, consumption recovery is evident in first-tier cities, with some malls seeing foot traffic and sales flat or up year-on-year.
By regional differences, the proportion of areas leading the recovery to normal levels or even seeing year-on-year growth ranges from 10% to 20%. Some stores' sales and foot traffic are flat or growing compared to the same period last year, reaching or exceeding levels from 2019 and 2020. A longitudinal comparison shows that business performance during the 2020 New Year holiday was generally better than in 2019, but after the sudden impact of the pandemic in early 2020, there was a sharp decline. Therefore, the 2020 New Year performance objectively serves as a watershed for commercial operations, with a continuous decline until late December 2022. Thus, comparing retail performance in most regions with 2020 better highlights the peak-to-valley gap.
During the 2023 New Year holiday, enterprises monitored by the Beijing Municipal Commerce Bureau—including department stores, supermarkets, specialty stores, catering, and e-commerce—achieved sales of 3.53 billion yuan, recovering to 83.8% of the same period last year. The total foot traffic in 52 key business districts across the city reached 12.181 million person-times. Foot traffic in Changping, Yandaixie Street, Beiyuan, Xihongmen, Changyang, Mentougou South, and Yansha business districts recovered to over 85% of the same period last year. According to statistics, sales and foot traffic at Beijing's Wukesong Huaxi MALL both increased year-on-year and exceeded 2019 levels. The first categories to recover included dining, interactive experiences, and social leisure. Miyun Vientiane City and Yansha Outlets saw sales increase by 23% and 10.3% year-on-year, respectively, while Saite Outlets, Huiju Shopping Center, and Badaling Outlets recovered to over 90% of the same period last year. For example, Wanda Plaza stores in Beijing adopted the slogan "Start with a sprint, open with a decisive battle," mobilizing all resources and organizing cultural and sports activities across stores. Compared to company targets, sales during the three-day New Year holiday surged 427%, and foot traffic surged 143%, showing impressive popularity.
Consumer data shows that during the Shanghai New Year holiday (December 31, 2021, to January 2, 2022), offline consumer payments reached 27.08 billion yuan over three days, up 12.8% year-on-year from 2021. According to the Shanghai Municipal Commission of Commerce, monitoring by the Consumer Market Big Data Laboratory (Shanghai) showed that total offline foot traffic in 36 monitored business districts reached 20.5 million person-times, recovering to about 90% of pre-pandemic levels. During the holiday, the top three business districts by consumption amount were Nanjing West Road, Nanjing East Road, and Lujiazui. The number of external consumption visits reached 5.513 million, with consumption amounting to 6.02 billion yuan, up 11.0% and 12.8% respectively from the same period in 2021.
Second, department stores and shopping malls with distinctive themes are recovering steadily year-on-year.
In fashionable department stores and shopping malls with comprehensive omnichannel marketing and well-promoted themed IP scenarios, customer attraction has shown stepwise growth. Offline sales performance and transaction conversion rates were flat year-on-year, while online marketing continued to grow, reaching 80% to 90% of 2019 activity levels—better than operators expected, indicating that consumer psychology among young, fashionable customers was underestimated and not optimistic enough. Comparing north and south, malls in the south are recovering better. For example, 37 malls and shopping centers monitored by the Nanjing Municipal Bureau of Commerce achieved positive sales growth during the holiday, up 2.1% year-on-year. The five major commercial entities in Xinjiekou business district—Deji, Central, Xinbai, Golden Eagle, and Grand Ocean—saw combined holiday sales increase 9.8% year-on-year, with average daily foot traffic up 276.8% from the last weekend before the holiday.
Third, corporate digital achievements are significant, with rapid growth in online sales.
Over the past three years, some companies have delivered satisfactory results in digital construction. Amid consumers' psychological avoidance of crowded physical stores, online transaction volume and value have grown rapidly. There are countless retail enterprises that have made effective digital progress. For example, compared to two years ago, Supermarket Fa (Chaoshifa) saw online retail volume and sales both increase by 300%, demonstrating a positive trend of digital-led technological change and organizational transformation. Hanguang Department Store, facing reduced foot traffic in physical stores, has continuously increased online marketing efforts, launching consecutive brand platform broadcasts for cosmetics and other fashion categories, with online sales increasing significantly year-on-year. Tianhong's overall digital membership exceeds 39 million, with over 4.26 million monthly active members on its app and mini-program. In the first half of the year, Tianhong Supermarket's home delivery orders increased 67% year-on-year, sales grew 29%, and sales share exceeded 20%. Intime Department Store's digital path first targets "people," accumulating digital members to make customers reachable, identifiable, and operable. By the second half of 2022, Intime's digital members exceeded 30 million. Meanwhile, sales associates and employees have also been digitized through DingTalk, enabling cross-organizational, multi-threaded coordination.
Fourth, enclosed scenarios or traditional malls see limited recovery in foot traffic.
According to public media data and monitoring data, department stores and shopping malls operating primarily in enclosed scenarios, including most traditional department stores and enclosed hypermarkets, saw foot traffic decline 30% to 40% year-on-year, with transaction conversion at about half. Sales and foot traffic recovery roughly matched expectations, equivalent to about 60% of 2020 or 2019 levels, with significant pressure to emerge from the trough and fully recover. These malls share a common characteristic: their main consumer base skews middle-aged, and middle-aged consumers are more cautious about pandemic prevention, unwilling to risk going to malls—understandably so. Due to traditional consumption habits, the better-selling categories in these malls include gold and jewelry, children's products, sports and outdoor brands, and health and hygiene products.
Fifth, the recovery of the catering industry varies greatly.
The catering industry has been hit hardest by the pandemic, especially social dining in some regions, with many closures. Restoring the lively atmosphere will require significant effort. Relatively speaking, catering in places like Chengdu is recovering quickly, and the industry is more optimistic. The catering types recovering well are those in mall dining areas with open evacuation conditions, where queues and year-on-year sales increases have been observed. Some famous catering brands are also recovering optimistically, directly related to their good marketing services, safety, and quality reputation.
Analysis of the Drivers of Steady Recovery
A steady recovery means there has been no sudden surge in gathering consumption, and transaction conversion is low; but it is not as empty as in previous months, showing a steady warming trend.
First, from the perspective of consumption drivers, many consumer groups have not been severely impacted.
First, a considerable number of people in mid-to-high-end occupations such as network technology, health protection, medical treatment, standardization and quality control, and safety and health have not seen their business operations or professional income affected. Under the specific conditions of control mechanism transition, some have even encountered development opportunities. Young people in these industries are the main customer base for new consumption. Second, a significant portion of consumers with institutional safeguards have not only been unaffected but have also received various guarantees, subsidies, or even increased income under special conditions. They are the main potential high-spending consumer group. Third, ordinary consumers who have been psychologically suppressed or impacted may, upon suddenly having restrictions lifted, need ways to vent and divert their gloom. Without adequate guidance, they may choose to consume in commercial settings, or even not consume but simply seek crowded spaces to release emotions and repair their self-identity. Fourth, despite reduced income, savings have grown rapidly, indicating that life insecurity remains strong, and the desire to purchase is hard to boost in the short term. Insufficient consumption motivation is the root cause, which cannot be positively aroused simply by boosting consumer confidence. Therefore, the recovery of ordinary consumer spending needs to be linked with occupational income mechanisms, health maintenance mechanisms, and consumer safety mechanisms to see satisfactory results. Thus, full consumption recovery will take time to adjust.
Second, from the perspective of business operators and supervisory institutions, the three-year pandemic, along with secondary disasters, has had a profound impact on operational channels and team confidence. There is an urgent need to carefully heal and gradually recover team confidence, vitality, and motivation.
Decision-makers need to plan carefully, moving from a narrow excitement or post-stress fatigue platform to mutual encouragement and relief, motivating all employees from economic, spiritual, and relational dimensions. By learning from the harsh comparisons during the pandemic, they should introduce policies to compensate for channel deficits and operational shortcomings, minimizing the risk of enterprises or related industries collapsing. For some enterprises with standardized contractual work, recovery may be quick, but for most followers, this healing process will take longer.
Four Phenomena Worth Noting
First, foot traffic is relatively optimistic, but purchase rates are low.
Some malls see foot traffic roughly flat year-on-year, but transaction volume is down over 60%, and average transaction value has not reached normal levels. This shows that consumers visiting malls are mostly not shopping but seeking relaxation and a change of mood. At the same time, due to income decline, consumption motivation is insufficient, and purchasing power has decreased. Operators need to combine new consumer and psychological desires to plan new cost-effective products and create new service marketing points.
Second, accelerate the creation of open operational touchpoints.
Relatively speaking, enclosed malls, including department stores and large hypermarkets, are slow to recover foot traffic. In some high-density business districts, malls with open, fashionable, and topical scenarios see significantly higher foot traffic than neighboring enclosed malls. Since the pandemic risk has not been fundamentally eliminated, these enclosed stores must, within the next three to six months, develop safe and convenient service marketing channels that openly reach consumers; otherwise, they will face a new round of consumer behavior shifts and impacts.
Third, high-quality fresh products have strong customer appeal.
From online and community platform sales sample data, products such as vegetables, eggs, local specialties, and popular processed foods—especially freshly slaughtered beef, mutton, pork, and chicken displayed on platforms—are very popular. Fresh pork is priced at nearly 50 yuan per jin, beef and mutton at over 40 yuan per jin, and a dressed white-feathered chicken at 150 yuan, with very active platform trading. This value conversion of community platform marketing poses a new challenge for food supermarkets lacking foot traffic: how to select safe fresh products and deliver them to consumers promptly.
Fourth, safety and hygiene at consumption sites remain a major concern.
In the coming period, pandemic risks may remain uncertain, and the public's psychological shadow persists. All commercial venues need to pay special attention to consumer safety. First, manage foot traffic, air circulation, and transition from enclosed to open scenarios. Second, stock and rehearse necessary medical equipment, cardiopulmonary resuscitation devices, and emergency transport setups. Third, prepare physical and mental safety plans to promptly address sudden stress-related incidents among employees, partner workers, or individual consumers that could lead to emergency security events.
In summary, in an environment where the risk of pandemic and secondary disasters threatening life has not fundamentally subsided and public sentiment is fluctuating, both operators and consumers need to be psychologically prepared, cautiously optimistic, and boldly responsible, jointly creating reassuring, safe, and stress-relieving commercial scenarios to welcome the hard-won steady recovery of the business ecosystem.