Revenge shopping is a weird name. And its historical antecedents are equally interesting. The Cultural Revolution in China was a period of doom and gloom. Millions of people lost their lives and the country closed its borders to the world. (Source: Finshots)
For the remaining Chinese people, there wasn’t a lot to look forward to and they were deprived of the most basic necessities. But then in the late 1970s, the country began to open up. And as economic activity slowly started gathering pace, Chinese people finally had the means and the wherewithal to buy foreign products.
History Of Revenge Buying
In fact, by the 1980s, they were doing it with such regularity that they had a new name for it — “baofuxing xiaofei.” Or as we like to call it in English — Revenge Buying.
It’s different from pent-up demand — where people defer their purchases in the hopes of transacting when there’s more economic certainty. Or the kind of shopping we do to alleviate stress and depression. (Courtesy to Finshots for this article)
This is exacting revenge on fate itself, for having stolen an entire year from us. It’s fair compensation for the damage we’ve suffered due to the pandemic. And the only way to make peace is to….
Spending More
Spend, spend and spend some more.
For instance, in April 2020, just as India and many other countries were beginning to shut shop, Chinese customers were walking into malls and spending ridiculous sums of money on luxury goods. In just one day, a Hermes store in China managed to sell $2.8 million worth of goods. It was crazy and by the end of 2020, China’s overall share in the global luxury market had doubled to about 20%.
This was revenge shopping at its finest.
Post-Pandemic Revenge Buying Recovery
And people now believe we might start witnessing the same trends in other countries as they begin opening up their economies as well. And they have good reason to believe so. According to Bloomberg, Americans have amassed excess savings to the tune of about $1.7 trillion.
The French Economic Observatory meanwhile noted that households in their country saved ~$66 billion during confinement last year. And if you start putting all the pieces together, you’ll start seeing that people now have the capacity to spend. (Source: Finshots)
