Coronavirus: China’s ‘cherry freedom’ vanishes as consumers cut discretionary spending
- Merchants at Jiangnan wholesale fruit and vegetable market in Guangzhou – China’s largest fruit market – say demand has plummeted due to consumer worries
- Lack of orders from hotels, restaurants, clubs and karaoke lounges also shows how China’s service sector is struggling
So-called cherry freedom was once a buzzword among China’s middle class, but as consumers cut unnecessary expenses while under pressure from the coronavirus pandemic, the ability to purchase pricey imported products without a second thought is now a thing of the past.
Few products tell the consumer spending story in China better than fruits such as cherries, as before the pandemic, demand for Chilean cherries and Peruvian avocados from China’s middle-class seemed insatiable.
The coronavirus, however, quickly put a stop to the demand, with merchants at the Jiangnan wholesale fruit and vegetable market in Guangzhou – China’s largest fruit market – feeling the full force of battered consumer confidence amid darkened job prospects and incomes.
“Demand at Jiangnan market has plummeted since the outbreak started. Retailers are just very cautious about placing orders … most of us have been losing money, whether selling imported fruit or domestic fruit,” said Li Xiaoqiang, a fruit importer.
Our importers’ losses could be up to 800,000 yuan (US$113,000) for a container of Chilean grapes
“We saw a short-lived recovery during the national Labour Day holiday and Mother’s Day [during the first week of May], but now it has become as sluggish as March and early April again.
“We keep reducing the prices. Take Chilean grapes, for example. The wholesale price was 180 yuan (US$25) for 8kg [before the coronavirus], and it is now just 100 or even 80 yuan. Our importers’ losses could be up to 800,000 yuan (US$113,000) for a container of Chilean grapes.”
Egyptian oranges also sold for up to 100 yuan for 15kg around the same time last year, but now only sell for 70 yuan.
“Imported cherries will be even harder to sell,” Li added.
The market claims 80 per cent of China’s imported fruit first stops at Jiangnan, although these days vendors are often seen passing the time playing games on their mobile phones.
One merchant, surnamed Wang, said the market was able to sell “60 to 80 containers” of imported oranges per day last year, but the sales volume has plunged to around 15 containers with the price level “about 50 per cent off”.
“Imported oranges are mainly for hotels, restaurants, clubs and karaoke lounges … if oranges don’t sell well, it means China’s service industry is still in deep trouble,” Wang said.
China’s fruit imports had been rising steadily over the past decade from a small base of US$1.63 billion in 2009 to US$10.3 billion in 2019, according to the Ministry of Agriculture and Rural Affairs.
The only thing in my head these days is how to cut spending and save enough money to pay the property mortgage
“Fruits are good and necessary for health, but I think I won’t be able to afford imported cherries or Japanese grapes for a long while. Instead, I will turn to affordable local fruits, like apples and pears.”
According to the ministry, China’s fruit imports in the first quarter of 2020 rose 5.0 per cent to US$3.16 billion, while according to China’s customs administration, imports of fresh and dried fruits and nuts were 2.45 million tonnes in the first four months of this year, a decline of 10.5 per cent compared to a year earlier.
It feels like no one eats fruits. My sales are only a third compared to the same period last year
“It feels like no one eats fruits. My sales are only a third compared to the same period last year,” said a trader selling watermelons. “I purchased the watermelons from farms in Wuhan, priced at 2.8 yuan (40 US cents) per 500 grams, and I now have to sell at 2.3 or 2.4 yuan.”
For China’s home-grown fruits, demand is weak as well. Last week’s average wholesale price of five types of domestic fruits monitored by the government fell 11.7 per cent year on year, according to data from the ministry of agriculture.
“It’s because everyone’s income is shrinking this year, so consumers are cutting their budgets for everything. From fruit retailers, to chain stores, restaurants, karaoke, hotels, movie theaters and supermarkets, demand has decreased a lot,” said a Ken Li, who stopped buying fruits to decorate cakes at his cafe in Guangzhou a few weeks ago.
“My business is struggling. I’ve reduced orders for everything, milk, fruit, and eggs.”
