During China's recent 'golden week' holiday, which started on October 1, 2024, consumer spending has shown signs of weakness, particularly impacting the market for hairy crabs, a traditional gift during this festive period. Prices for these popular crustaceans have fallen significantly, with dealers reporting a 50% reduction in gift-giving budgets among consumers. The presale price for gift certificates for eight hairy crabs plummeted from 2,688 yuan (approximately US$382) to just 1,488 yuan, reflecting a sharp decline in demand. Additionally, wholesale prices in Zhejiang have dropped by 20%, now ranging between 60 to 100 yuan per kilogram, indicating a broader trend of reduced consumer spending during this key holiday season [f4302134].
The overall retail sales growth has also been sluggish, rising only 3.4% year-on-year in the first eight months of 2024. This slow growth is concerning, especially as consumption contributed 60.5% to China's GDP growth in the first half of 2024. To stimulate spending, the Shanghai government has announced a 500-million-yuan (US$71.1 million) consumption voucher plan aimed at encouraging consumers to spend more during the holiday season [f4302134].
As the holiday progresses, the combination of falling prices and cautious consumer behavior raises questions about the sustainability of China's economic recovery. The decline in hairy crab prices serves as a barometer for broader consumer sentiment, suggesting that while some shoppers may be looking for bargains, many are still hesitant to spend freely [f4302134].
In contrast to the potential benefits for western shoppers from China's price pressures, the situation during the golden week highlights the challenges faced by local consumers. As they navigate rising costs and tighter budgets, the outlook for the remainder of the holiday season remains uncertain. The interplay between supply, demand, and consumer confidence will be critical in shaping the economic landscape in the coming months [f4302134].