As the Mid-Autumn Festival approaches in China, mooncakes are not selling well on the mainland. A mooncake shop that has been in business for over a decade revealed that while they used to sell tens of thousands of mooncakes per day, they are now only able to sell over 10,000. The shop and others in the industry have indicated that this year, they are mainly relying on promotional activities to sell mooncakes. Economists analyze that the downturn in the mooncake industry is primarily related to the overall economic decline.
September 17th marks the Mid-Autumn Festival, and the recent news of “unsold mooncakes” has garnered attention on Chinese social media. A report titled “2024 Chinese Mooncake Industry Market Trends” points out that due to insufficient consumer demand, market competition will intensify further. It is projected that this year, the overall production and sales volume of mooncakes will remain relatively flat or slightly decrease, with the characteristic of large market volume and slight profits continuing.
A vendor selling “Five Nuts Mooncakes” informed a journalist from Dajiyuan on Monday (9th) that there are currently many promotions and discount activities for mooncakes. “9.99 yuan (RMB, the same below), for 10 pieces,” the vendor mentioned, “They are larger in size, about as big as a fist.”
A factory producing traditional Cantonese-style mooncakes for over a decade told Dajiyuan reporters on the same day that as the Mid-Autumn Festival approaches, they used to sell tens of thousands of mooncakes in a day, garnering at least tens of millions in revenue annually. Nowadays, they are only selling over 10,000 mooncakes in a day. The factory has introduced a promotion where customers “buy two, get two free, meaning four mooncakes in total.” This level of discount activity is unprecedented for them. The vendor emphasized, “We are offering wholesale prices.” “For plain red bean paste (buy two get two free), it’s 17.8 yuan, which means each red bean paste mooncake costs about 4 yuan.” “White lotus seed paste mooncakes cost 25.8 yuan for four, so it’s 6 yuan each.” “The mooncakes are palm-sized, 4 centimeters thick, and the egg yolk mooncakes have two yolks inside.”
The vendor reiterated that their mooncakes are much cheaper compared to supermarket prices, stating, “A box in a supermarket can sell for eighty to ninety yuan, and for better brands, over a hundred yuan.” He added, “Our prices are even lower than what’s available in the market.”
American economist David Huang told Dajiyuan that these vendors’ discounted sales are impacting their profits. Just like recent data from the Beijing catering industry, where 88% of businesses are not profitable, with profit margins as low as 1%; mooncakes are also considered a secondary food product in the catering industry. “If it’s less than 1% profit, it’s essentially operating at a loss,” Huang explained. “Essentially, we see similarities between mooncakes and the catering industry, as the impact of the economic downturn is particularly evident.”
According to the latest data from the Beijing Statistics Bureau, in the first half of this year, the total profit of large-scale (annual revenue of over 10 million yuan) catering enterprises was only 180 million yuan, with a net profit decrease of 88.8% year-on-year, and a profit margin as low as 0.37%.
A salesperson from a Northeastern traditional mooncake vendor told Dajiyuan that businesses are currently running activities and promotions to sell mooncakes. Even special flavored Xinjiang mooncakes are being offered at discounted prices. The salesperson mentioned that the mooncakes have been upgraded, with the addition of cranberries in yogurt and white cloud beans. Despite the upgrades, this year’s prices are more favorable than last year, with ongoing promotional activities. “At 44.9 yuan, you get two packs, with a total of eight mooncakes.” “For 66 yuan, you get three packs.”
Data from the China Bakery Confectionary Sugar Products Industry Association shows that in 2023, the national mooncake production volume was 320,000 tons, with sales totaling 22 billion yuan. This year, the estimated mooncake production volume and sales for the Mid-Autumn Festival are around 300,000 tons and 20 billion yuan, respectively. The prices of mainstream mooncake gift boxes are more affordable, with the most concentrated price range for consumption between 70 and 220 yuan, significantly lower compared to last year’s range of 80 to 280 yuan.
David Huang told Dajiyuan that today’s downturn in the mooncake industry is largely due to three main issues.
Firstly, for state-owned enterprises, government agencies, and public institutions, they used to give out mooncakes during the Mid-Autumn Festival. However, in the past few years due to anti-corruption measures, the number of mooncakes purchased with public funds has significantly decreased.
Secondly, at the level of private enterprises, these companies used to exchange mooncakes during the festival as gifts for clients, with most high-end mooncakes serving as gifts between businesses or as employee benefits. However, due to poor economic conditions and business operations, many private enterprises are facing significant challenges, resulting in a substantial reduction in gift-giving practices and employee benefits.
Lastly, at the level of ordinary citizens, with a relatively high unemployment rate and most people facing payment arrears, housing loans, car loans, and other financial difficulties, there is limited spending on non-essential items such as mooncakes.