China’s cherry phenomenon bucking trend of the overall economic slowdown
- Consumers holding back from spending on big-ticket items like cars, appliances and mobile phones, but will buy pricey food items
- Analysts say strong sales of less expensive items will not offset ‘consumption downgrade’ by middle-class consumers
If there is still a luxury item left on Chinese consumers’ shopping lists these days, it is probably cherries.
The sweet red fruit used to be rare on the tables of Chinese families because they were unaffordable.
But the once “aristocratic” cherry has become accessible to the Chinese middle class in recent years, with sales on fresh food e-commerce platforms jumping, particularly during this month’s Lunar New Year, with media scrambling to report on the boom even as the economy cools nationwide.
The cherry phenomenon bucks the trend of the overall slowdown in consumption, which contributed more than 70 per cent to China’s economic growth last year.
During the Lunar New Year, growth of national retail and catering revenue slowed to 8.5 per cent, according to the Ministry of Commerce.
Car sales have also fallen for seven consecutive months, with January down 15.8 per cent from a year earlier, according to the China Association of Automobile Manufacturers.
Some observers regard the rise in cherry sales as the “lipstick effect”: when the economy worsens, consumers forego big expenditures but splurge on less costly but still high-end goods.