The Qixi Festival, often seen as a day for celebrating love and loyalty among the Chinese people, took a different turn this year. Traditionally, during this time, young individuals would flaunt luxurious gifts from their partners on social media. However, the scenario was quite contrasting this year.
Qixi Festival fell on August 10th this year, and despite it being a Saturday, consumer spending associated with the festival experienced a significant downturn, leading to discussions such as “Qixi Festival consumption plunges, are the youth refusing to pay the ‘love tax’?” trending and topping the hot search list on Weibo, attracting around 200 million views.
Some netizens expressed that this year’s Qixi Festival seemed less lively compared to previous years, almost feeling desolate.
Others complained on social media about being unable to start a family due to financial constraints, as they struggled with debts and had to work long hours every week just to make ends meet.
“With an average debt of 130,000 yuan per person for those born in the 1990s, coupled with the normalized 996007 work culture, where is the leisure for romantic relationships?” remarked a netizen.
“Yeah, we are so exhausted that all we want to do is lay down. There’s no room for love and affection,” responded another online user.
The term “996” refers to working from 9 am to 9 pm, six days a week, while “007” implies working every day.
Some florists took to Xiaohongshu (Little Red Book) to showcase images of unsold roses in their shops, lamenting the lack of customers.
China currently faces a string of issues ranging from a real estate crisis, weak consumer spending, high youth unemployment, to a growing debt crisis.
According to a report by CNN on August 13th, Alfred Wu, a China politics expert at the National University of Singapore, mentioned that the youth, who were once big spenders during Qixi, are now grappling with job searches.
“I believe the overall sentiment is very poor, and consumers are extremely conservative,” he added, noting that the negative sentiment has become a “overall pattern” rather than just a holiday phenomenon.
The report cited Yeap Jun Rong, a market strategist at IG Group, who stated that the decrease in spending aligns with the trend of weak consumer confidence over the past two years, with Chinese consumer confidence “hovering around historic lows.”
The pervasive pessimism is reflecting in trade and other data. CNN, based on official Chinese customs data, calculated that the import volume of jewelry-grade diamonds in the first half of this year dropped by 28% compared to the same period in 2023.
Nicolas Hieronimus, CEO of L’Oreal, mentioned in a recent earnings call at the end of last month that “the only region globally where consumer confidence remains very low is China.”
He attributed this lack of confidence to a weak job market and real estate challenges, stating that the global beauty industry’s growth this year was lower than expected, primarily due to the lack of confidence among Chinese consumers.
On August 7th, Beiersdorf, the European skincare company behind Nivea, reported that its half-year sales fell short of expectations.
Beiersdorf noted that slowing luxury goods market in China had impacted sales of its luxury brand La Prairie, with the brand’s sales dropping by 7% in the first half of 2024.
Apple reported a 6.5% year-on-year decrease in sales in the Greater China region for the quarter ending on June 29th. Johnson and Johnson referred to China as a “very unstable market” and a significant underperforming business segment for the company.
Data released by the General Administration of Customs of China on August 7th showed that in July, China’s exports increased by 7.0% compared to the same period the previous year. However, the growth rate was slower than market expectations and lower than the 8.5% growth rate in June, marking a new low in nearly three months. The slowdown in exports not only affects the Chinese economy but also has adverse implications for employment and subsequently impacts consumption.