China's High-End Mooncakes Muted for Mid-Autumn Festival

    As China's anti-graft campaign continues, high-end mooncakes are becoming increasingly low-key to appeal to a new base of buyers for this Mid-Autumn Festival.
    Jing Daily
    Jessica RappAuthor
      Published   in Finance
    An ad for the W's special mooncake gift box. (Courtesy photo)
    An ad for the W's special mooncake gift box. (Courtesy photo)

    If there is anything that the last two years of President Xi Jinping's anti-graft campaign has signified, it's that mooncakes are much more complex than their fillings.

    This week, China’s employees and business partners found out whether their management would actually go through with giving out the traditional mooncake box for the Mid-Autumn Festival on September 27. Since the campaign began in 2013, gift-giving traditions among corporations have suffered, and mooncakes are no exception. Once a simple lotus seed paste-filled pastry laced with staple Chinese flavors like red bean, the mooncake's status grew in the last two or three decades to symbolize wealth and luxury through the use of increasingly expensive ingredients and glamorous packaging. Their worth, which can range from an average 200 to 500 yuan (US$31-78) to as much as 1,000 yuan (US$156) or more for a box of six mooncakes—made them fall smack dab into the center of dishonest spending among officials.

    Now, there are many people in corporate and government leadership positions who are convinced that even the basic mooncake itself is a contradiction to the Communist Party's ideals, as People's Daily puts it in a Chinese-language article on WeChat titled “A Boss Who Doesn't Give Mooncakes Isn't A Good Boss.” Meanwhile, the anti-corruption campaign has been going strong. The Central Commission for Discipline Inspection announced on its website earlier this month that media outlets are supposed to act as watchdogs and report anything they notice that is out of line.

    If managers and officials do have bags of mooncake boxes to give away, they are most likely going to be more subtle about it, said Martin Li, assistant director of food and beverage at W Beijing Chang'an.

    “It's too much for the moment in Beijing,” he said. “A lot of people keep it low-key. One month before the festival comes, we all know that for the banker and the government official, it's time to give mooncakes to each other, but it's hard to see it on the street.”

    The W's trendy mooncake gift box. (Courtesy Photo)
    The W's trendy mooncake gift box. (Courtesy Photo)

    Li said that in the last two years, most of the five-star hotels in Beijing have shifted their strategy in response to what has been a waning demand for flashy mooncakes because of the campaign. They have reduced their mooncake box prices to target people who only buy in small batches, such as individuals, families, and leadership at small companies. These hotels especially cut costs on the packaging by using cheaper materials, and they focus on selling the more minimal, four-piece boxes that can be priced between 100 to 200 yuan (US$16-31). Usually a higher tier range of mooncakes selling for 300 to 400 yuan (US$47-63) or more is also available, but those are ordered in smaller quantities, he said.

    The W Beijing Chang'an, which opened in China's capital last year, sold out of the chic mooncake box they created in cooperation with Chinese jewelry designer Sun Hefang that targeted the fashion and music community. Li said that the W's mooncakes serve primarily as a marketing tool for the hotel, are sold in small quantities anyway and not a huge source of revenue like they are for the luxury business hotels.

    A five-star hotel with a 20-year history in Beijing, Hilton Beijing has a well-established relationship with the Beijing market, but their mooncake sales have taken a hit in the last two years, according to Andrew Moore, the hotel's director of business development. Sales have dropped 40 percent since 2013, but have improved since 2014. This year, they introduced a new type of packaging in a Tiffany blue color that sold out before the traditional red boxes did. They sold five tiers, ranging from six mooncakes for 198 yuan (US$31) to 12 Western-style mooncakes for 488 yuan (US$76).

    The Hilton's mooncake gift set. (Courtesy Photo)
    The Hilton's mooncake gift set. (Courtesy Photo)

    Moore said the amount of stock that hotels are buying and having to sell each year in a shrinking market has made competition between hotels similar to “guerrilla warfare.”

    “So for us, moving into the future, we realized that we need to do something radical in order to maintain the volume of mooncakes that we sell and be a step ahead of the competition,” he said.

    If everything goes according to plan, next season's mooncakes at Hilton Beijing are going to be sold in boxes that are greener and made of completely organic materials. The hotel is currently assessing recipes that will fit the packaging in a move that reflects what many of the smaller scale, artisanal bakeries are offering this year in response to Chinese millennials' search for healthier, more sustainable food sources.

    Even with the campaign, the marketplace shift and the uncertainty swirling around the mooncake, the likes of People's Daily are encouraging corporate leadership not to forget the true meaning and culture behind the Mid-Autumn Festival tradition. Their article says mooncakes themselves aren't wrong, but using taxpayer money to purchase them is. A recent China Daily op-ed echoes this sentiment, saying “The ongoing anti-corruption campaign is aimed at preventing the misuse of public money, curbing extravagance and fighting corruption, not to offer an excuse for denying employees their normal welfare assistance and benefits.”

    To have actually received mooncakes this year is likely more priceless than the value of the box itself, and for those who haven't, it may make next year's wave of hotels' innovative responses to the anti-graft campaign that much more worth the wait.

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