In a surprising turn of events for Shanghai, known as a trendsetter in Chinese consumer market, the city experienced a more sluggish period in the first quarter and during the May Day holiday compared to previous years.
The total retail sales of consumer goods in Shanghai in the first quarter of this year decreased by 1.1% compared to the same period last year. In March, the total retail sales of goods dropped by a significant 14.1% year-on-year. The arrival of the May Day Golden Week was expected to boost consumer spending, but observations and personal experiences of Shanghai residents revealed a continued lackluster consumer sentiment during the holiday period, extending the downward trend seen in the first quarter.
Shanghai, one of the most important and prosperous cities in mainland China with high income levels and a large urban population, has traditionally been a benchmark for the Chinese consumer market.
Recently, various provinces and cities in China have successively released consumption growth data for the first quarter of 2025. According to the data from the Shanghai Municipal Bureau of Statistics, the total retail sales of consumer goods in Shanghai dropped by 1.1% year-on-year in the first quarter. Excluding the already published retail sales of goods in January and February amounting to 277.7 billion yuan, the total retail sales in March reached 128 billion yuan, a significant drop of 14.1% from March last year.
The 1.1% year-on-year decrease in total retail sales of consumer goods and the sharp 14.1% decline in March’s retail sales of goods reflect the pressure Shanghai’s consumer market is under, attributed to factors like insufficient consumer confidence and other reasons.
The term “insufficient consumer confidence” encompasses concerns about future economic prospects leading people to save rather than spend, a slowdown in disposable income growth affecting consumer spending, a sluggish real estate market impacting related consumption and potentially restraining other expenditures, as well as employment pressures making consumers more cautious with their money.
The May Day holiday in China, known as the “Golden Week,” is primarily aimed at stimulating the economy and consumer spending. By connecting statutory holidays with adjacent weekends to create an extended holiday period (originally 7 days, later adjusted), the government encourages people to travel and spend money, thereby boosting domestic economic growth. The consecutive holidays provide ample time for longer distance trips and extended leisure activities, making the May Day period an important peak for travel and consumption throughout the year.
Well-known Shanghai blogger “Master Mei” shared insights from his own experiences, revealing a situation where Shanghai residents visit tourist spots only for photo ops without making purchases.
In a video, he mentioned visiting various places in Shanghai during the May Day holiday, including bustling areas like Nanjing Road, Huaihai Road, the Bund, and Xujiahui commercial district, as well as expat hubs like Tianzifang. He noted that based on his observations and reports, there was no discernible difference in consumer behavior between May Day and regular days in Shanghai.
He recounted a recent experience on May 6, the first working day after the holiday, where he met friends at a café in Xujiahui. Despite the ideal location and affordable prices of the café, there were surprisingly few customers during that time, similar to his experience on May 2, a holiday.
The current situation at this café reflects the overall business climate in Shanghai during the May Day period. Many places in Shanghai, even traditionally busy areas like Xujiahui and Nanjing West Road, saw minimal crowds during the holidays. The blogger pointed out that whether it’s a holiday or regular day, the scene remains unchanged.
The Wukang Building on Wukang Road is a famous landmark in Shanghai, popular among social media influencers. “Master Mei” visited the site during the May Day holiday and noticed many people taking photos without making any purchases.
He expressed that a trend of “budget travel” is prevailing in China during holidays, where many people prefer to spend less or not at all. This phenomenon leads to overcrowded tourist spots for photo opportunities while actual consumption spots or shops remain deserted. He remarked that the holiday and non-holiday periods were virtually indistinguishable in terms of consumer behavior.
He believed this phenomenon is not limited to Shanghai but a prevalent issue across the country.
It is noteworthy that, according to official data, the Tibet Autonomous Region saw a year-on-year increase of 11.1% in total retail sales of consumer goods in the first quarter of this year, the highest in the country.
“Master Mei” questioned why consumer growth sharply declined in first-tier cities like Beijing and Shanghai while some regions experienced double-digit growth. He suggested that if there are doubts, they should be directed toward the official statistics bureau.
“Master Mei” has over 210,000 followers on Weibo and a significant following on other social media platforms.
Another blogger, “Nine Er,” a Shanghai native, revealed that he spent only 200 yuan during the four-day May Day holiday this year, indicating a lack of desire to spend money.
He mentioned that prices of goods in various aspects such as food, clothing, accommodation, and transportation in Shanghai have significantly dropped compared to 2023 and 2024. He highlighted the abundance of affordable options in Shanghai, with many new stores offering absurdly low prices.
He pointed out that due to the trend of downgrading consumption, fewer people are willing to pay for relatively more expensive items nowadays.