Lunar New Year, otherwise known as Chinese New Year or the Spring Festival, is the most important of the traditional Chinese holidays. The festival celebrated in China and throughout Asia, begins with the first new moon of the lunar calendar and ends on the first full moon of the lunar calendar, some 15 days later.
The festival is a time to be spent with family and reflect on the previous year. During Lunar New Year, traditional gifts are shared including, tea, lanterns, fruit baskets, sweets and perhaps the most well known gift, the Hongbao. The hongbao is an elaborately decorated red envelope filled with money.
Whilst Lunar New Year is not typically a retail focused event, it comes at a time when annual bonuses have been paid driving and drive an uptick in retail spend, as well as a time for spoiling family and friends with traditional gifts. For retailers wanting to capitalise on the Lunar New Year festival, there are a number of ways to capture consumer attention.
Specifically, eMarketer has highlighted five learnings from Lunar New Year 2017:
- Retail sales increased 11.4% from Lunar New Year 2016 to 2017, with consumer electronics, home appliances, jewelry, dining and travel experiencing the strongest growth.
- In 2017, 54% of all Lunar New Year spend took place online, a 48% YoY increase. Further to this, food and beverages, apparel, fresh food, cosmetics and consumer electronics were the top five categories purchased online during the festival.
- It has been reported that 344 million domestic tourist trips were made during the 2017 Lunar New Year festival, a 13.8% YoY increase. In addition to this, tourism spend increased 15.9% YoY.
- Asia is a mobile first market, an AdMaster survey revealed that respondents spend an average of 4.17 hours on their smartphones during Lunar New Year, with 2.3 hours being spent on PCs.
- In 2017, there were 14.2 billion digital red envelopes, or HongBao, sent via WeChat users on Lunar New Year’s Eve alone, this a 75.7% YoY increase. In total 46 billion hongbao were sent via WeChat in 2017, with Alipay reporting 168 million users having completed a hongbao promotion.
Further insights to assist retailers in capitalising on the Lunar New Year festival include:
The importance of the colour red:
In Chinese culture, the colour red represents fires and symbolises luck, happiness and joy. It is a colour worn by brides to ward off evil and is also representative of vitality, celebration and fertility.
During Lunar New Year, it is considering lucky for those who are celebrating their birth year to wear red items. As 2018 is the year of the Dog, people who are “Dogs” will wear red accessories throughout the year. This provides an opportunity to promote red products, or create red edits with items such as accessories or handbags for retailers wanting to reach consumers during the Lunar New Year period.
Lunar New Year is an important time to be spent with family and friends. As such, travel is the highest converting vertical during the festival. Over recent years, there has been an increase in family travel, in December 2016, there was an 18% rise in bookings made by families to travel during the Lunar New Year holiday season.
And whilst Asia based destinations are still the most popular for travellers during Lunar New Year, bookings to Europe increased 56% over the 2017 Lunar New Year period.
Trends to watch in China:
- The rise of homegrown brands
According to a recent McKinsey & Company study, consumer confidence in local brands is on the rise. Chinese consumers have shown an overwhelming preference in local brands over foreign ones in the categories of: laundry detergent, beer, personal care items and small electronics.
- Artificial Intelligence
Artificial Intelligence (AI) has become an increasingly popular topic in recent years. In China, due to the adoption of smartphone usage and increased data collection, AI is the strongest performing mechanism to utilise the mountains of consumer data collected. This places China at the forefront of AI enhancements, with brands expected to provide personalised experiences that are relevant and unique to the consumer.
- Growth in consumer confidence
A growing wealth among consumers has shown an increased excitement for superior experiences. Consumers are eager to pay for product upgrades and new products, with experience seekers having helped to drive 10% growth in the leisure category since 2011.
Want more information about how your brand can leverage Lunar New Year and the fastest growing eCommerce market of Asia? Speak to one of our experts today firstname.lastname@example.org or visit rakutenmarketing.com.au