What: China saw an increase in retail sales during the Chinese New Year as Covid-19 restrictions lessen.

Why it is important: After three years of lockdowns, Chinese consumers are revenge spending, giving hope of an economic recovery and a boost in global growth.

Retail sales during the weeklong Chinese New Year increased more than 12% compared to 2022 holiday season. Positive retail numbers were seen across major retail hubs as pandemic policy relaxed and pent-up demand was unleashed.

In Hainan, China’s duty-free island, daily average sales exceeded 350 million renminbi or USD 51.8 million, tripling pre-pandemic levels. At 12 duty-free shopping centers, sales totaled 2.57 billion renminbi, or USD 380 million.

Additionally, retail sales at key shopping areas increased by 13.7% in Beijing. While brick-and-mortar sales reached 32.3 billion renminbi (USD 4.7 billion) in Shanghai. Sales at popular luxury malls also rose in single digits compared to last year and in Chengdu, sales at key commercial retailers reached 1.174 billion renminbi or USD 173.8 million, a 6% increase from last year.

Luxury brands saw revenge spending similar to what happened after measures were first relaxed in 2021. Louis Vuitton reportedly reached 10 million renminbi (USD 1.48 million) in single-day sales.

Domestic travel has also returned to 88% of its pre-pandemic levels despite a high level of COVID-19 infection rates with Chendgu, Shanghai, and Guangzhou becoming the most popular local travel destinations.

Revenge spending returns for Chinese New Year