Finance

China’s Golden Week holiday signals persistent consumer caution

Published

7 months ago

October 9, 2024

Passengers line up to check in at Chengdu Tianfu International Airport on October 6, 2024 as China’s week-long National Day holiday draws to a close.

China News Service | China News Service | Getty Images

BEIJING — China’s Golden Week holiday affirmed a trend in more cautious spending, while consumers put greater emphasis on experiences.

The seven-day public holiday that ended Monday recorded about 2% less spending per domestic trip than the pre-pandemic level, according to Goldman Sachs analysis published Tuesday.

“Low tourism spending per head and subdued services prices highlighted still weak domestic demand and continued consumption downgrading,” the analysts said.

The decline was an improvement from a gap of more than 10% during holidays in the spring, the Goldman report said.

The Golden Week holiday in China commemorates the founding of the People’s Republic of China on Oct. 1. It is the last public holiday of the year for the country.

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Nearly one-fifth of bookings on Trip.com for the holiday came from users ages 20 to 25, making them the main consumer group, the company said. It noted more than 90 concerts were held during the holiday, and that daily growth in orders for performances and exhibitions grew by an average of more than 80% during the period.

However, a lack of blockbusters resulted in a drop in box office earnings, to 2.1 billion yuan ($300 million) this year, from 2.7 billion yuan last year, according to state media, citing the China Film Administration.

Consumers were also more spontaneous.

Trip.com said nearly 30% of travelers booked travel on the same day, or one day in advance, a 6 percentage point increase from last year. The average number of days customers booked in advance fell to 6 days this year, down from 6.8 days last year, the company said.

The holiday this year followed a flurry of policy announcements and promises, and a stock market surge. Consumer spending in China has been lackluster since the pandemic due to uncertainty about future income and economic growth.

“People become more cautious with spending. Also they opt for more affordable options of travel and affordable locations,” Kenneth Chow, principal at Oliver Wyman, told CNBC on Wednesday.

“People are much more interested in spending on things they can talk about, things they can post [on social media] about, rather than just the big ticket items,” he said. He said such shifts mean brands, including luxury ones, need to focus more on communicating the benefits to potential Chinese consumers.

“When people are becoming much more sophisticated, the proposition has to change, and whoever is able to adapt to that new trend first will be able to win,” Chow said. “It’s not just about Chinese brands. It’s not just about overseas brands. It’s about who’s going to react first and who’s going to capture the attention of Chinese consumers first.”

Appliance sales climb

Christine Peng, head of the Greater China consumer sector at UBS, pointed out Wednesday that Golden Week figures indicated recovery in spending was tied to trade-in policies for appliances.

Retail sales rose by 9% during the holiday, while sales of home appliances surged by 149.1%, according to state media, citing figures from the tax administration. It did not provide the amount spent.

“The Golden Week consumption could still suggest a modest recovery versus August, in our view, due to trade-in subsidies (for appliances and autos) and consumption vouchers issued by the local governments,” Peng said. “For example, Shanghai’s retail sales rose 3%, a recovery versus -3% YoY this August.”

During Golden Week, mainland China recorded 765 million domestic trips, up from both the prior year and before the pandemic, according to the Ministry of Culture and Tourism.

However, by another measure of counting from the ministry, China had received 782 million domestic visits in 2019. It was not immediately clear whether the figures were comparable.

The average number of mainland China residents traveling across the border rose to 1.08 million a day during this year’s holiday, up from 1.01 million a day in 2019, according to CNBC calculations of official data.

Japan, Thailand and the U.K. were among the more popular destinations, according to booking site Trip.com.

Chinese mobile pay expands

Overseas transactions by China’s Alipay users surged by 60% during the first four days of the holiday versus the year-ago period, according to the mobile payments operator, owned by Alibaba-affiliate Ant Group.

Malaysia, Korea, Thailand, Hong Kong and Singapore were the top destinations for Chinese tourists by transaction volume growth, Alipay said. It noted that rather than shopping, the Chinese travelers also spent significantly on entertainment, food and beverage, services and transportation.

Foreign visitors to mainland China using Alipay spent more than twice the amount during the first four days of the holiday, versus a year ago, the company said. China has introduced visa-free travel for more countries, while Alipay and WeChat Pay — the two dominant mobile pay apps in the country — have in the last two years made it easier for foreigners to use the apps.

Hong Kong said that visitors from mainland China visitors averaged 170,000 per day during the holiday, 27% more than a year ago. On Oct. 1, Hong Kong said it received 220,000 visitors from the mainland, the highest since the end of Covid-19 border controls.

Oliver Wyman’s Chow noted how hotels, especially those in Hong Kong, were adapting to lower prices per night by selling more food or other experiences.

Finance

More Americans buy groceries with buy now, pay later loans

Published

4 hours ago

April 26, 2025

Business Finance News

People shop for produce at a Walmart in Rosemead, California, on April 11, 2025.

Frederic J. Brown | Afp | Getty Images

A growing number of Americans are using buy now, pay later loans to buy groceries, and more people are paying those bills late, according to new Lending Tree data released Friday.

The figures are the latest indicator that some consumers are cracking under the pressure of an uncertain economy and are having trouble affording essentials such as groceries as they contend with persistent inflation, high interest rates and concerns around tariffs.

In a survey conducted April 2-3 of 2,000 U.S. consumers ages 18 to 79, around half reported having used buy now, pay later services. Of those consumers, 25% of respondents said they were using BNPL loans to buy groceries, up from 14% in 2024 and 21% in 2023, the firm said.

Meanwhile, 41% of respondents said they made a late payment on a BNPL loan in the past year, up from 34% in the year prior, the survey found.

Lending Tree’s chief consumer finance analyst, Matt Schulz, said that of those respondents who said they paid a BNPL bill late, most said it was by no more than a week or so.

“A lot of people are struggling and looking for ways to extend their budget,” Schulz said. “Inflation is still a problem. Interest rates are still really high. There’s a lot of uncertainty around tariffs and other economic issues, and it’s all going to add up to a lot of people looking for ways to extend their budget however they can.”

“For an awful lot of people, that’s going to mean leaning on buy now, pay later loans, for better or for worse,” he said.

He stopped short of calling the results a recession indicator but said conditions are expected to decline further before they get better.

“I do think it’s going to get worse, at least in the short term,” said Schulz. “I don’t know that there’s a whole lot of reason to expect these numbers to get better in the near term.”

The loans, which allow consumers to split up purchases into several smaller payments, are a popular alternative to credit cards because they often don’t charge interest. But consumers can see high fees if they pay late, and they can run into problems if they stack up multiple loans. In Lending Tree’s survey, 60% of BNPL users said they’ve had multiple loans at once, with nearly a fourth saying they have held three or more at once.

“It’s just really important for people to be cautious when they use these things, because even though they can be a really good interest-free tool to help you kind of make it from one paycheck to the next, there’s also a lot of risk in mismanaging it,” said Schulz. “So people should tread lightly.”

Lending Tree’s findings come after Billboard revealed that about 60% of general admission Coachella attendees funded their concert tickets with buy now, pay later loans, sparking a debate on the state of the economy and how consumers are using debt to keep up their lifestyles. A recent announcement from DoorDash that it would begin accepting BNPL financing from Klarna for food deliveries led to widespread mockery and jokes that Americans were struggling so much that they were now being forced to finance cheeseburgers and burritos.

Over the last few years, consumers have held up relatively well, even in the face of persistent inflation and high interest rates, because the job market was strong and wage growth had kept up with inflation — at least for some workers.

Earlier this year, however, large companies including Walmart and Delta Airlines began warning that the dynamic had begun to shift and they were seeing cracks in demand, which was leading to worse-than-expected sales forecasts.