What Happened: Chinese market regulators have a new target: mooncakes. Ahead of the Mid-Autumn Festival (which falls on September 10 this year), the National Development and Reform Commission will carry out inspections on restaurants, enterprises, and e-commerce platforms that produce these round treats to ensure they are not overpriced. A notice issued in June states that mooncakes should not use rare ingredients such as shark fins or edible bird’s nests or “excessively luxurious packaging” like precious metals, mahogany, or other expensive materials. A cost survey will be carried out on box sets that retail for over $74 (500 RMB).
The Jing Take: With mooncakes being popular gifts during the Mid-Autumn Festival, many luxury brands have put their own spin on the delicacy. Instead of traditional lotus seed paste or red bean paste, some luxury players opt for experimental concoctions; in 2021, Swiss watchmaker Hublot filled its mooncakes with Swiss fondue, chocolate popping candy, and Swiss Biber, while Tiffany used premium ingredients like black truffle and edible bird’s nest. Others go all out on packaging: last year, Gucci created a velvet-wrapped music box and Bulgari presented an LED-lit Colosseum cut-out.
It is important to note that these exclusive mooncakes are typically gifted to loyal customers rather than sold; as such, it is unclear whether they will be subjected to regulatory scrutiny. However, it’s a different story for local hotels, restaurants, and F&B brands. Although gift sets usually average around $37 (250 RMB) per local media, some skew higher-end; Guangzhou-based cake shop Likoufu, for example, sells a mooncake set as high as $69 (468 RMB), putting it just below the 500 RMB mark.
That said, mooncakes are still a key way for brands to demonstrate their understanding of the local culture and deliver an experience that delights the senses. In fact, a recent report by iiMedia finds that from 2016 to 2021 the size of China’s mooncake gift box market roughly doubled from $1.7 billion (11.6 billion RMB) to $2.5 billion (16.9 billion RMB). This demand has led to a growing number of mooncake companies in China, reaching 40,478 as of July 2022, making it all the more crucial to stand out creatively.
But in an era of “common prosperity” — one where overpriced mooncakes are seen to “not only deviate from traditional culture, but also contribute to extravagance and waste, and have a negative impact on the social atmosphere” — brands should stay alert. Instead of pricing up or over-decorating, perhaps reining in the theatrics and focusing on the heart of the festival is key. Otherwise, they may be in for a not-so-sweet surprise.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.