BEIJING: Sales of mooncakes, China’s traditional moon-shaped delicacies, have been struggling against strong headwinds before the pastry’s peak sales period.
In China, it is customary to eat this pastry during the Mid-Autumn Festival holidays, which starts on Tuesday (Sept 17) this year, and mooncakes have long been sold as high-end gifts for the festive period.
The mooncake’s sales struggle is due to a sweeping anti-corruption crackdown by the Chinese government, which has been tightening rules for expensive gifts.
At one department store in a shopping district in Beijing on Sept 8, dozens of varieties of mooncakes were on display in bright red and gold boxes at an area specially set up for the sweets. But there were few customers despite it being a weekend.
It is said that 90 per cent of the demand for mooncakes is for gifts, but a female office employee in her 30s said she will buy them only for her household in 2024.
“Sales of mooncakes are about half of last year’s. Business seems a bit slow,” a female shop assistant said.
One Chinese online media outlet has called 2024’s Mid-Autumn Festival “the coldest in history”. According to estimates by a mooncake industry association, most boxes of mooncakes are priced at 70 yuan to 220 yuan (S$13 to S$40) in 2024, down from 80 yuan to 280 yuan in 2023.
Overall mooncake sales are expected to fall to 20 billion yuan, down nearly 10 per cent from 2023. Production is expected to decline to 300,000 tonnes, down by 20,000 tonnes.
Consumer appetite has already been dulled by a sluggish economy.
According to a Chinese economic magazine, one hotel in the southern city of Guangzhou set a mooncake sales quota of 20,000 yuan per employee, and a female employee there said she had a nightmare about having to sell the cakes, as she was unable to meet even 10 per cent of her quota despite having bought mooncakes worth 1,000 yuan herself.
A Japanese-affiliated company in Shanghai, which has been distributing mooncakes to its employees every year, said it opted for 100 yuan products in 2024, which is 30 per cent cheaper than those it offered in previous years.
The crackdown by the administration of Chinese President Xi Jinping is compounding the mooncake sales slump.
The Xi administration, which has pledged to eradicate corruption, has targeted the delicacies, associating them with corruption because they once became extremely expensive and came in ultra-luxury versions, including one made with shark fins or swallow nests and another that comes with money or even real estate.
In June 2022, four departments of the central government formulated 12 rules for mooncakes, further tightening restrictions.
Under the rules and other regulations, mooncakes priced at 500 yuan or more are targeted for intensive monitoring, and they should not come in more than four layers of packaging. Packaging costs should also not exceed 15 per cent of the price of the product, and mooncakes must not be sold in a package with other products.
In 2022, the State Administration for Market Regulation, China’s anti-monopoly authority, mobilised 200,000 employees to conduct on-site inspections of more than 30,000 mooncake stores nationwide. Products found to be in violation of the rules and regulations were ordered removed from the stores.
It seems similar measures are being taken in various regions in 2024.
The Chinese government has been subsidising expensive items such as cars and home appliances in an effort to stimulate consumer spending, which accounts for 40 per cent of the country’s gross domestic product.
The economy could be further dragged down if the administration comes down hard on mooncakes. - The Japan News/ANN
