Shen Wenbin decided on the spur of the moment to enter a lottery for a Cadillac XT5, after seeing an ad by e-commerce company Pinduoduo. The sport utility vehicle was available at a 45 per cent discount, as part of a promotion. “It would have been a good purchase, but I was not lucky enough to win it,” the Shanghai white-collar clerk, in his early 40s, said after his name was not drawn. “To be precise, it was a great opportunity to save money.” The SUV was sold to a lucky winner for 192,000 yuan (US$26,909), about 100,000 yuan cheaper than its average retail price, during 55 Shopping Festival, a large-scale shopping event that started this month and will run through until the end of June. It has been organised by the Shanghai government to drive discretionary spending by the residents. Mainland China’s financial and commercial capital has brought its coronavirus outbreak under control and is now looking to release pent-up demand for daily necessities as well as big-ticket items. Shanghai to replicate ‘China’s Wall St’ along North Bund, boost economic activity Shanghai’s economy was walloped by the US-China trade war, which has simmered over the past two years, even before the outbreak and the resulting lockdown measures disrupted production and business activity in February and March. Its economy shrank 6.7 per cent in the first quarter of this year, falling into negative territory for the first time in over three decades. The city is pinning its hopes on buoyant consumer spending boosting the local economy, and has encouraged manufacturers, retailers and online-shopping platforms to offer discounts to attract shoppers. Local media reported that aggressive promotions by retailers in major shopping areas such as the city’s Nanjing Road had drawn thousands of buyers who were “revenge spending” on expensive luxury watches and jewellery. Shen said he would be on the lookout for other promotions. “Buying a high-end car with a 200,000-yuan budget is my plan this year. I think a bleak economic outlook will force lots of car companies to slash prices to woo customers like me.” But the authorities and businesses cannot pop the champagne just yet. A survey of about 2,000 mainland Chinese consumers conducted by Boston Consulting Group this month suggests that about two-thirds will not spend lavishly this year, after cutting budgets for consumer goods amid fears of an economic recession. The poll also suggested that 70 per cent of the respondents were downbeat. More than half said their household financial conditions had been adversely affected by the outbreak. “It will be a slower process, restoring consumers’ confidence, when compared with the Sars [Severe acute respiratory syndrome] outbreak [of 2003],” said Josh Ding, a partner at Boston Consulting. Meanwhile, the sales of passenger vehicles are expected to fall 10 per cent in 2020, according to Fitch Ratings, marking a third straight year of decline. They have slumped 36 per cent to 4.34 million units this year through April, from a year ago, having borne the full brunt of the pandemic.