How China’s Covid-19 travel restrictions gave a big boost to online services during Lunar New Year

Iris Deng
·5-min read

Travel restrictions during the Lunar New Year did not stop Chinese people from engaging in many of the traditional festivities associated with the holiday, but they ended up doing most of them online after the government encouraged people to stay put during the week-long break to avoid a resurgence of Covid-19.

Mobile internet traffic during the Lunar New Year holiday week, which ran from February 11-17 in mainland China, grew 23.4 per cent compared with the same holiday period last year, according to data issued by the Ministry of Industry and Information Technology (MIIT) on Sunday.

“The model of greeting, entertainment and consumption during this Spring Festival has continued to move online under the government’s advocacy for a stay-at-home holiday,” the MIIT said in a report. “Remote celebrations, digital red packets and online shopping for holiday gifts have been the new trends that drove the rapid growth of internet traffic.”

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The Chinese government had urged the public to avoid travelling for family reunions during the holiday, prompting many local governments to impose strict control measures amid a resurgence of Covid-19 infections in some parts of the country. The authorities had called on internet companies to provide online services to meet demand for holiday celebrations and entertainment.

When the coronavirus outbreak hit China hard in the Spring Festival period last year, the government ordered lockdowns for most parts of the country, which halted offline businesses such as restaurants and factories, which in turn paralysed the offline logistics system as couriers were unable to deliver parcels and food.

Government data showed that the number of parcel deliveries declined year on year in the first two months of 2020, while on-demand food delivery platform Meituan saw its food orders slashed by half in February last year, according to the company.

However, these industries soon rebounded after the country brought the pandemic under control, spurring a drastic transformation among the public when it came to online entertainment, shopping, education and work.

During this year’s holiday, Chinese people increasingly did their shopping online and shipped gifts to family and friends back home instead of visiting in person. Cainiao, the smart logistics network operated by e-commerce giant Alibaba Group Holding, reported a fourfold increase in packages shipped from February 4 to 15 compared with the same period in 2019. Alibaba owns the South China Morning Post.

More than 50,000 Cainiao logistics stations were operating during the holiday with 100,000 workers on duty, according to Alibaba. The company had previously pledged more than 200 million yuan (US$31.9 million) in extra compensation for couriers who worked over the holiday.

Figures from the Ministry of Commerce show that online sales across major Chinese e-commerce platforms totalled 906 billion yuan between January 20 and February 18, after government departments pushed platforms to offer special discounts during the Spring Festival.

“The biggest [online trend] I saw was remote gift delivery, with parcel deliveries seeing a massive 224 per cent jump on last year,” said Mark Tanner, managing director at marketing company China Skinny, citing data from the country’s postal bureau.

Food was an increasingly popular gift ordered online, according to reports from the country’s top food delivery services Meituan and Alibaba’s

China’s Lunar New Year spending jumps to more than US$127 billion

Meituan said there was “an obvious surge” of remote meal orders where users, mostly in top-tier cities including Guangzhou and Beijing, placed orders for families and friends in a different city.

As travel for family reunions was discouraged, more young people ordered meals for one, with such orders up 68 per cent in the first three days of the holiday compared with last year, according to Meituan. In general, Spring Festival food delivery orders on the Meituan platform increased 80 per cent year on year.

Data from China’s Ministry of Commerce showed that food delivery orders were up 57 per cent overall during this holiday compared with the same time last year.

Alipay, the mobile payments app of Alibaba affiliate Ant Group, said the number of users who sent digital red packets, the Chinese practice of giving “lucky money” for the new year, soared 270 per cent in the first five days of the holiday compared with last year.

Besides connecting with friends and family through online gifts, Chinese with extra time on their hands turned online for their entertainment. While online sales for movie tickets surpassed 9 billion yuan, a fourfold increase compared with last year according to the commerce ministry, people also spent more time on video streaming sites as they stayed at home.

E-commerce sales in China set to outstrip bricks-and-mortar retail in 2021

Alibaba’s Youku video streaming site reported 2.3 billion video views on the site from January 28 to February 16, up 20 per cent from last year, with the growth driven by people in first tier cities staying home for the holiday, according to the company. Youku users spent an average of 1.5 hours per day watching videos.

Tencent Video, operated by Chinese internet giant Tencent Holdings, and iQiyi, owned by Chinese internet search giant Baidu, also offered a selection of films and television shows free of charge over the holiday.

Additional reporting by Minghe Hu

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