Which businesses won and lost this Chinese New Year

Feb 19, 2021 12:18:38 PM

Emerging Communications: CNY 2021 Insights Round-up

This month we rang in the year of the Ox and witnessed China’s 2nd Chinese New Year in Lockdown. As journeys  hit a record low this year at 1.15 billion trips, we’ve seen a massive pivot in how Chinese consumers have spent their money.

For some businesses, these new behaviours may be challenges to overcome in 2021. For many however, these changes present amazing opportunities.

Which ‘winners’ welcomingly rang in the holidays, and which businesses were left feeling the cold this CNY? We’ve highlighted some key groups below, you can also find our full breakdown of the trends and opportunities here.

Winners

  • On-demand service providers: From laundry, auto and pet services, to part-prepared and fully-dressed Chinese feasts, on-demand services have seen huge growth both in China and among overseas Chinese looking to make the most of New Year lockdowns.

  • Education providers & publishers: Self-improvement is a key focus of GenZ and millennial Chinese consumers, money saved from cancelling trips home or even working through the holidays is being invested in online courses, educational resources and all kinds of books.

  • Luxury, Beauty & Cosmetic Services Industries: Self-improvement for Chinese consumers also refers to ‘new year, new me’ style spending. High-end grooming products, luxury clothing and accessories, beauty products and services and even cosmetic surgeries have seen a significant increase this Chinese New Year, accounting for a larger share of consumer spend. Especially among male Chinese consumers.

  • Foreign Imported/ Cross-border products: This Chinese New Year has been referred to as a ‘2nd Singles Day’, with couriers reporting over 220% increase in online orders in the last week. Foreign brands have especially benefited from the boost, Alibaba's Tmall said that more than 20,000 foreign brands took part in CNY promotions. During the last two weeks of January alone, there was a 70% increase in packages of imported goods, due to rising demand for holiday goods.

  • Local travel: If Covid has proven anything it is that affluent Chinese consumers’ desire for adventure and experiences will not be dampened. Local ‘staycations’ at rural spa resorts and suburban short-term rentals have proven really popular among Chinese consumer with money to burn who want that holiday feeling. For White-collar workers who have chosen to stay in the office through the holidays, extra bonuses and rewards means many GenZ and Millennial consumers will be flush and keen to travel come the May/June Holiday period.

Who has struggled this Chinese New Year & How can these businesses pivot for success?

  • International travel companies: Have suffered due to closed borders and worries about extended quarantine periods, however the demand for overseas travel is still strong, as is consumer spending power. The trick for foreign travel brands will be connecting with consumers during their extensive planning stage and not leaving it too late!
  • Inbound focused-businesses: Many inbound businesses have been negatively impacted not only by the lack on inbound tourism, but also their lack of understanding around the overseas Chinese opportunity and how to activate Chinese consumers abroad.
  • Traditional gifting categories: As people aren’t heading home traditional gifts such as domestic alcohol brands, tobacco products and CNY snacks and gift packages have been partly replaced by gifts in the Mother-baby, Imported products and fine goods categories, as well as ‘self-soothing’ shopping.

 

How can brands capitalise on the most of current trends?

  • Don’t wait to pivot your sales channels: Whether selling via Little Red Book, WeChat mini-program, live-streaming webinars or direct to overseas Chinese online, demand for new, quality products is strong and opportunities are there for those willing to invest strategically.
  • Understand and adapt to GenZ: Whether you are an online education provider, offline experience provider, personal grooming brand or luxury staycation venue. Statistics show that affluent Chinese GenZ are the driving force behind many of the latest consumption trends, but they are looking for products and services that can uniquely address their needs. In order to sell to GenZ you need highly-relevant content that resonates, this can’t happen without an in-depth understanding of who you are talking to and why.
  • Start the conversation now: Chinese consumers review brands on at least 15 different touchpoints before they make a purchasing decision, and with enquiries about international travel opportunities coming in since Q2 last year it is safe to say Chinese consumers are happy to spend extra time planning. In order to beat out the competition you need to start generating meaningful conversations now, across various channels, using creative, interactive campaigns, or risk being drowned out when the floodgates open.

 Want to keep your finger on the pulse of Chinese opportunities in 2021, looking to close your sales gap and boost business in China?

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