Coronavirus has changed China’s entertainment habits, but consumer spending is still weak

Stagnating income growth and job losses have seen many Chinese turn to cheap online entertainment during the pandemic

Sales revenue in China’s games market last year increased 20.71 per cent year on year to 278.69 billion yuan, according to Gamma Data

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China’s mobile game market hit sales revenue of 209.68 billion yuan last year during the pandemic, according to Gamma Data. Photo: AFP

Published: 4:00pm, 4 Jul 2021Updated: 9:52pm, 4 Jul 2021

With international travel off the cards and cinemas intermittently closed, young Chinese like Jiang Tang have been spending more time entertaining themselves online since the coronavirus pandemic hit.

When not at home, scores of young people gather during the evening at milk tea cafes to play online games in the southern city of Guangzhou.

“To attract young consumers, the cafes are equipped with fast internet speed and are rushing to launch one-litre packages of drinks and snacks that cost about 50 yuan per person,” said Jiang, a 27-year-old administration executive.

The trend towards online entertainment has helped dash hopes of post-pandemic “revenge spending” in the mainland and highlighted continued sluggish consumption in the world’s second largest economy.

Although China was the first major economy to bounce back from the pandemic, income growth has slowed in recent months, forcing many working and middle class residents to seek out cheap online entertainment to amuse themselves. For others that can afford it, weekend getaways have replaced trips abroad.

Underwhelming consumer data has added weight to some analysts’ earlier predictions of a “K-shaped recovery” from the pandemic in China, when different parts of the population rebound from recession at different rates, exacerbating underlying inequalities.

Over the past two years, Chinese households have continued to take on more debt, with a corresponding decline in household consumption, especially among younger families, according to the Institute for Advanced Research at Shanghai University of Finance and Economics.

The situation is reflected in consumption data for the first quarter of this year. Total social retail sales in the first three months were 10.52 trillion yuan (US$1.6 trillion), growing just 7.6 per cent from the same period in 2019, much lower than the average annual growth rate before the epidemic, according to government data.