The Chinese New Year, known in China as the Spring Festival, is a 15-day festival in traditional custom and the country’s most important holiday. This year, it occurs on February 19th, 2015, with celebrations continuing through February 25th. With the Year of the Goat fast approaching, it’s time to think about how businesses can cater to the purchasing habits of the Chinese demographic.
More and more people are celebrating Chinese New Year, and not just within the Chinese community. How can Chinese and non-Chinese businesses alike utilize this opportunity and reap the benefits? We will dive deeper into four different sectors — read on for our industry-specific tips.
China is the world’s largest consumer of outbound tourism. In 2012, Chinese overseas tourism consumption totaled US $102.1 billion, contributing to more than 30% of global international tourism growth. That same year, total consumption of Chinese tourists in the US reached $8.77 billion — on average, a Chinese tourist spends $5,948 on trips to the US.
During Chinese New Year, it is customary to take 7 days off work, and students are concurrently on winter break. As such, this is the perfect occasion for families to travel — in recent years, there has been a climbing trend of overseas travel to popular destinations such as the US, Canada, the UK and major European cities.
Schools in North America and Europe typically do not have a break during CNY, so it is more common for family members who reside in China to book trips and visit relatives abroad.
Tips and Strategy
This is the ideal opportunity to promote special campaigns for the buzzing traveling period — publicity for Chinese New Year promotions will keep your hospitality brand top of mind when it comes to booking travel destinations. Hotels and airlines can offer exclusive holiday deals. Travel operators can suggest ideas on where to go for CNY vacations abroad, and launch campaigns centered on family reunions to speak to relatives that live in different countries.
Chinese New Year is fairly similar to Christmas in the retail world. For retailers in major international cities, Chinese New Year could overtake Christmas as the most important selling season of the year, due to significant growth in Chinese tourist spending. Shopping is considered to be a major activity for tourists during their New Year’s time off. Why do people prefer shopping abroad rather than in China? Primary reasons include better product selection, and the high price of luxury goods at home due to tariffs and duties.
Over 50% of Chinese tourists spend in excess of US $4,500 per trip, and account for a quarter of luxury goods sales worldwide, according to the World Tourism Organization. With 83 million Chinese traveling in 2012, the market has become a key focus for retailers in key international travel destinations.
On average, Chinese tourists spend US $899 per retail transaction — higher than any other group, according to Global Blue.
Tips and Strategy
As any retailer would capitalize on the gift-giving tradition of Christmas, retailers should also prepare for the “buying new things” custom of Chinese New Year. The new items symbolize welcoming prosperous opportunities and getting ready for a new year. Special publicity could incorporate traditional elements of the New Year such as lucky numbers (6, 8, 9) during price promotion. Another essential element is, of course, the animal of the year.
For shoppers from China, it is essential to streamline shopping experiences to be as convenient as possible by having China UnionPay (CUP) as a payment choice. Special touches, such as Chinese-speaking sales associates and providing information on any available tax returns, are also appreciated.
For online shoppers, convenient payment methods will decrease shopping cart abandonment and facilitate sales. Alipay is recommended to ensure the payment process is Chinese-approved. In addition, product descriptions and shipping options should be available in shoppers’ native languages! Further incentives such as free shipping are always a bonus.
For luxury retailers, in particular, we recommend showcasing unique or higher-end merchandise as that is hard to find back home.
Automotive & Real Estate
For the automotive and real estate industries in North America, it is significant to note that relatives who come from China to visit their children abroad are usually the key decision-makers in the household. During the Lunar New Year, they will take the opportunity to physically test drive a car, or visit a show home with their family, and the purchase decision is usually made after this process.
Tips and Strategy
Since purchasing a home or a car can be a monumental decision, it is important to have several touchpoints with potential buyers in both the research stage and the decision-making process. Note that these might be different people in a household. Chinese New Year campaigns should ideally launch a month in advance to generate awareness, and incorporate various New Year symbols such as lucky numbers and the animal of the year.
If your business is looking for help with a Chinese New Year campaign, please contact us — we would be delighted to have a discussion.
Wishing you much health, prosperity, and success for the Year of the Goat.
Gong xi fa cai,
Director, Sheng Li Digital