Local governments and private companies in China are now utilizing coupons to boost consumption and support retailers that have been heavily hit by the recent novel coronavirus outbreak. The state has also mandated public officials to become more visible to the public to encourage spending and to ease concerns and fears over the crisis.
Over the weekend, cities around China have begun to distribute electronic vouchers to its residents. The move is reminiscent of the immediate actions taken by local governments during the financial crisis in 2008. The cities of Nanjing reportedly gave residents and non-residents electronic vouchers worth around 318 million yuan.
City officials prioritized low-income individuals and labor union employees who were no longer receiving pay due to the lockdowns. Meanwhile, officials also held online lotteries that awarded winning with coupons that can be used in establishments such as restaurants, gyms, and retail shops.
Other cities, which had already been distributing coupons, ramped up their operations. Macau, which had been giving out coupons since February, gave away additional coupons worth more than $275 million to local residents. Earlier in the month, the city of Jinan in China's Shandong province had distributed coupons worth more than 20 million yuan to offset the losses incurred by citizens during the tourism slum.
Other Chinese cities that had also begun distributing coupons included those in the Zhenjiang, Hebei, and Liaoning provinces. The move by the local governments follows the issuance of new guidance by 26 central government departments regarding the bolstering of the country's consumer spending, particularly on culture and tourism.
The guidance also encouraged officials to lead local consumption by making public appearances to bolster consumer confidence. Government heads in various jurisdictions have begun to appear in restaurants and other establishments. In the Qinhuai district of Nanjing city, district heads were required to spend a minimum of 100 yuan per day in local establishments.
On Sunday, e-commerce giant Suning.com began handing out coupons to its customers worth around 500 million yuan. The coupons were meant to entice buyers to spend more money on its online platform as well as its more than 200 Carrefour physical stores. The coupons included massive discounts and credits towards the purchase of items such as electronics, home appliances, clothing, and jewelry.
Analysts have pointed out that private companies have been forced to turn to coupons to boost spending as it had fallen to unprecedented levels following the viral epidemic. Using coupons is simply one of the ways that companies manage demand amid the slump as the outbreak continues to disrupt supply chains.
