Reuters reported on October 14 that Chinese consumers are commonly known for lavish spending on high-end handbags, clothing, and accessories from Western luxury brands.
However, The country’s “zero-COVID” policy and its resulting frequent lockdowns have not only put the brakes on companies’ business activity but also reduced Chinese consumers’ desire to splurge.
Instead, the little luxuries in life—artisanal food and drinks and smart, trendy gadgets—have caught their eye.
Brands that have caught up with the trend include Kweichow Moutai, best known for $300 bottles of baijiu, the Chinese spirit popular at banquets.
It launched baijiu-infused ice cream at $10 a cup in May, racking up $350,000 (2.5 million yuan) in sales on the first day.
Budweiser Brewing Asia-Pacific says that premium and artisan beer, as well as unique beer gift sets priced at hundreds of dollars, are selling well.
Mark Tanner, the founder of the marketing agency China Skinny, said that Chinese consumers are “spoiling themselves with those little things, and they’re loving something novel.”
Indeed, both Burberry Group and French conglomerate Kering, with brands such as Gucci and Yves Saint Laurent, reported 35% year-on-year reductions in China sales in the April-June quarter.
Lucy Lu is a 31-year-old Shanghai resident working in marketing for a domestic fashion brand.
She says, “Before, let’s say with a handbag or cosmetics, if I liked it I would just buy it without a second thought, now I really double check with myself if I need something before I buy it.”
Lu added, “Dining out is now my main treat.”
Gerard Low is the founder of the Shanghai-based ice cream brand Dal Cuore where a scoop costs about $5.60 (40 yuan).
He said he plans to open a fifth store in the mega-city as the quick return of footfall to normal levels after a draconian two-month lockdown.
He observes that more families, instead of primarily young people, are heading to his shops for a treat.
Low said, “When times aren’t so good, people want to feel better, guilty pleasures like ice cream can help.”