How Chinese New Year Will Affect Your E-commerce Store (and how to turn it to your advantage)

What’s the biggest holiday season in the world?

If you’re in the US, you’ll probably say Thanksgiving right?

In the EU, perhaps Christmas.

For the ecommerce nuts it’s definitely Black Friday.

However, if you’ve been keeping up with our recent articles on the best seasonal sales and opportunities for ecommerce, you’ll know that Single’s Day in China has the highest revenue potential.

Which is fitting.

Because when we’re talking about huge holiday seasons, Chinese New Year has to rank at the top.

Most people don’t realise that CNY boasts the largest human migration in the world.

It’s absolutely huge.

385 million people travel across the country and internationally to spend time with their families.

It’s a manic time and the country all but shuts down.

Speaking from experience, I can tell you that travelling within China during this period is a fool’s errand.

However, I can also tell you that this huge migration of people and deeply loved holiday holds huge potential for e-commerce brands across the globe.

Before I get into the specifics of how you can benefit from Chinese New Year, let’s address the basics.

What is Chinese New Year?

It’s pretty much exactly what it sounds like — the celebration of the new year according to the Chinese calendar.

You’ll also hear it referred to by a couple of other names.

Specifically the Lunar New Year (one of many in Asia) or Spring Festival — a direct translation of its modern Chinese name 春节。

There are four major actions taken by revellers to celebrate the holiday:

1. Decorating with various red items
2. Spending quality time with family (generally at feasts and dinners)
3. Fireworks
4. Giving gifts and money packets

It is, undoubtedly, the most important festival in the Chinese calendar. And, when that;’s almost 1.4 billion people, it’s something you should pay attention to.

Ok, so it’s important, but when exactly is it?

What Day is Chinese New Year in 2019?

So, you know how Thanksgiving is on the fourth Thursday of November, right? And how that means it never falls on the same date?

Well, Chinese New Year is the same kind of thing.

However, it’s a little more complex at the same time.

Chinese New Year falls within one day of the second new moon before the spring equinox moon phase.

Complicated right?

All you really need to know is that it will always happen between the 20th January and the 20th February.

And this year, 2019, Chinese New Year falls on the 5th February.

I wish I could say that’s all you need to know, but there’s one more thing you should be aware of.

A lot of holidays commerce brands target tend to take up a single, 24-hour slot.

Not so with CNY.

In China, people will receive a full 7 days vacation, however, the holiday can be celebrated for up to 23 days (however, it’s more often only celebrated for 2 weeks).

So, we now know what it is, when it falls, and how long you’ve got to promote your specific Lunar New Year campaigns.

Now it’s onto the real questions…

Can You Make Money During Chinese New Year?

One of the immutable truths of retail is that people will spend more during a holiday period.

It’s true regardless of the holiday or even the country it’s celebrated in.

Chinese New Year, whilst primarily a family first holiday, is no exception.

People still need to travel, they still need to buy gifts, and they’ll still be more agreeable to holiday-specific deals.

And with China’s growing middle class, Chinese New Year is seeing YoY growth in spending.

It slowed somewhat in 2018, seeing only a 10% increase from 2017, but the fact is, people are still spending big bucks during the Lunar New Year.

“Hold on”, I hear you say, “those are stats from the Chinese Ministry of Commerce. That’s great for Asia based brands, but what about US and EU brands”.

Well observed, my swift to judge friend.

These stats are based on the Chinese population as, well, this is kind of a Chinese holiday.

But, to make matters a little clearer, I’m going to separate the potential for making $$$ and the problems you may face by geographic location.

Not by country though as you’ve not got all day. This will be split by East and West.

Let’s first start with those of us based in the East.

Eastern brands read on.

Western sellers who sell nothing to Asian markets, click here!

Can Asian Brands Make Money During Chinese New Year?

The answer to this one is pretty obvious.

Brands based in a primarily Asian market have the opportunity to make an absolute fortune.

The spending figures for the Lunar New Year eclipse those of Thanksgiving in the US.

If you’re selling within China you’re likely in the best position. There’s a huge growing middle class in the country who are all spending like crazy.

The younger generations are expecting to earn increasingly more every year. And according to this study, they’re also expecting to spend more every year to improve their quality of life.

And that’s not including the strong Chinese populations in surrounding regions like Singapore, Malaysia, and Thailand.

However, the real question you’ll want to ask is regarding the best items to sell during the Lunar New Year.

During any holiday period, people are, generally, a little more liberal when it comes to opening their wallets.

But if you want to cash in big time, then you’re going to want to focus on items that have a cultural link to Chinese New Year.

What exactly do I mean by that?

Well, what do you think about when you think of Christmas? Probably some or all of the below:

• Christmas trees
• Christmas tree decorations
• Stockings
• Stocking filler gifts
• Mince pies (for the Brits out there)
• Christmas dinner

That’s just a very small sample and has nothing to do with the gifts people will buy.

These are all items culturally linked to the festive season and, as such, bound to make huge sales.

As you’d expect, there’s a good deal of culturally relevant items you could leverage for Chinese New Year.

Thanks to the nature of the holiday, there are a few industries that are far and away the leaders when it comes to sales.

Travel, family gifts, and dinner are the obvious entries here. However, you’ll notice there’s quite a focus on fashion as well.

According to Criteo, there’s a daily increase of 71% in fashion, 101% in grocery, and 56% in sales for beauty products during the period across the East Asian region.

Criteo also mentions that the sales increase begin around 3 weeks before the holiday hits, which means NOW is the perfect time to start your next campaign.

Even more interesting, mobile sales see a greater increase than those on the desktop.

Of course, the best campaigns are going to do one of a few things.

They’re either going to go for the higher AoV through attempting to sell multiple products (think sets, bundles, or cross-sells), or they’re going to leverage the love of mobile and gamified elements to increase reach and engagement.

A great example of the latter can be seen in this campaign from AliPay.

One of the things to do at this time of year is to give HongBao 红包. Small red envelopes filled with a gift of money.

AliPay gamified the process of giving HongBao by making it similar to Pokemon Go.

Users scan the object in real life and then send their friends clues on how to find their virtual Hong Bao.

A cool way to leverage the popular mediums and actions of shoppers in the region.

And that’s key.

The Chinese market is very tech savvy.

They live through their mobile devices, handling everything from ordering food to paying bills.

If you can leverage that by introducing a social commerce element to your campaigns, then you should be able to profit wildly during the period.

Fortunately, we’ve put a great guide together on exactly that right here!

But this is all kind of expected right? I mean, it’s a Chinese holiday so of course, you’ll be able to make some good sales in Asia.

What about Chinese New Year in the West?

I’m not going to spin a yarn here and say that there’s still loads of opportunity in European and American countries.

As regions that don’t really celebrate the Lunar New Year, there’s a minimised profit potential during the holiday.

However, minimised does not mean non-existent.

Across these western countries, there are still sizeable Chinese populations.

There’s also a healthy interest in the holiday expressed by the native people of countries around the world.

This presents the opportunity for you to sell many relevant goods to both the overseas Chinese (so they can celebrate as they would back home), and also to those enjoying the festivities in their home countries.

If you sell something that’s included in the increased sales categories mentioned above, you could see a nice boost by including a Chinese New Year promotion.

As a short reminder, here’s a list of those key industries:

• Fashion
• Groceries
• Decorations
• Fireworks

One of the other major changes for both those in China and overseas Chinese during the festive period is the growth in international travel.

There’s year-on-year growth when it comes to travel during the holiday, and that could spell a good bump in sales for travel and travel-related brands.

Long story short, even if you’re based in the US or EU, there’s a great opportunity to run some very profitable promotions during Chinese New Year.

However, it’s not all sunshine and rainbows.

The Negatives of Chinese New Year

We’d all agree that Black Friday and Cyber Monday are some of the most profitable days of the year for commerce, right?

However, we’d all also likely agree that there’s a ton of negatives associated with them.

Massive order numbers, increased customer support queries, and of course the dreaded delivery issues.

It’s this last issue that’s going to be the major hurdle for brands during the Chinese New Year.

If you’re selling within China, Chinese New Year is akin to Christmas in the west.

Everything slows down.

Stores close, employees take a lot of time off, and established services are put on hold.

That means your deliveries to Chinese addresses will likely be delayed.

There’s no such issue if you’re targeting Chinese overseas communities.

However, if you’re a drop shipping store leveraging Ali Baba or AliExpress, then there’s a very good chance that your deliveries could be delayed.

Which will negatively affect your clients who aren’t based in China, or celebrating the Chinese New Year.

There’s no real way to get around this, however, you can minimise the potential of this problem by taking three simple actions.

1. Include a disclaimer on all new purchases explaining that delivery will slow down during the period
2. Offer longer delivery times to give yourself a buffer
3. Slow down your advertising for 2 weeks around the holiday itself

These won’t solve the issue, but they will minimise the chance for consumer complaints and poor reviews.

If your store focuses on Valentine’s gifts, then you might want to consider what it is you can do to minimize the impact as, without any action, you could have a very bad Valentine’s season.

So, Will, it Affect Your Store?

It depends.

Which I know is a really crappy answer, but it’s also the truth.

If you’re a brand who markets and sells primarily to an Asian market, there’s a good chance you’ll be able to grab more than a few extra sales simply by adding a holiday specific campaign.

If you’re in the west and focus on products that are associated with CNY, then you too could see a nice little bump in sales.

Of course, Asian based brands who focus on specific CNY items are the biggest winners though.

On the other end of things, brands who sell to the west but the source from China will most likely lose out over the period. If that’s you, then it might be worth you slowing your marketing spend down.

For about 70% of the e-commerce population worldwide, Chinese New Year creates a great opportunity to increase your sales.

And now is the best time to get your campaigns underway. With jumper, you could have that next CNY campaign up and running within the hour.

Originally published at blog.jumper.ai on January 17, 2019.