Mooncake boxes get more extravagant every year and create a lot of hype, but now Chinese officials are putting limits on high pricing.
The National Development and Reform Commission in China will be cracking down on excessive pricing over ￥500 (around $75) on luxury mooncakes. The news comes just a couple of weeks before the much awaited Mid-Autumn Moon Festival, set to take place on 10th of September this year.
Luxury brands, especially in fashion, have been ramping up efforts over the years to deliver increasingly more extravagant Moon Cake gift boxes. From precious metals, objects, and luxurious fillings like bird's nest, shark fin, truffle, and other expensive ingredients. In June, Chinese officials announced many of these ingredients along with “excessively luxurious packaging” would be forbidden.
Many of the most lavish mooncake sets are created by multinational brands and are not for sale, gifted to loyal customers. It is still unclear to what degree the impending regulations will apply in these cases. In big cities, makers of high-end mooncakes have increased to meet the growing demand with the most expensive sets priced from ￥250 up to ￥450. Across China there are currently 40,478 mooncake businesses registered as of July 2022 and the number is growing.
The news is an indication that the luxury market may be soon flattening out. Increasing wealth gaps due to inflation and other world events are affecting financial markets globally. During a “common prosperity” era, the rise in excess is a concern. To promote an equally favorable society and protect the psychological welfare of the general population, Chinese regulators are sensitive to what may be considered “flaunting of wealth”, both in the media and in the market.
There will most likely be no slowdown in the demand for luxury mooncakes. The new regulations will not affect most mooncake businesses but could bench suppliers that depend on the flow of business, causing fluctuations in the overall luxury market. As options for personalization become more sophisticated in the consumer market, there will most likely be more creativity in presentation and ingredients. Mooncakes are a centuries old tradition and a wish for prosperity. As gifts they have cultural and personal significance and can be found in an array of flavors.
For the brands
While luxury brands may have to pull back on ostentatious displays, it would be wise for companies to invest in a more personal approach when gifting mooncakes to select clients. Companies should set aside traditional ways of analyzing customer data and turn to creators capable of extracting narratives from the data instead. Luxury is increasingly becoming an experience that translates to access. The right approach will focus on providing personal curated attention that connects an individual’s experience to a brand story, rather than a consumer to a label. The mix of human experience and AI technology like digital ID tagging along with seasoned, vetted artists prepares brands for an integrated future that takes into account Web3 and a quickly evolving consumer.