Chinese New Year 2016 is coming: Trends advertisers need to know, plus how to benefit from the lucrative holiday season in mainland China

The Chinese New Year holiday season will kick off on 7 February 2016

Chinese New Year – the most important traditional festival in the Chinese culture – is traditionally a time for family reunions as well as gift exchange between families, friends and business contacts in mainland China. In 2016, the annual holiday season will kick off on 7 February.

The Chinese New Year is a huge annual event – be it in people’s spending or migration. In the past Chinese New Year in February 2015, the seven-day holiday recorded a total retail and restaurant sales of RMB678 billion (approx. USD104.6 billion) in mainland China, doubled the total spent by the Americans at Thanksgiving 2014.

As China has become more prosperous, an increasing number of Chinese have opted to spend the holiday overseas. According to Bloomberg’s data, Chinese people undertake 2.8 billion trips during their Chinese New Year celebrations, with close to 5.2 million Chinese – a 10% year-on-year growth in number – took outbound trips during the holiday in 2015 to Europe, the United States and other destinations in Asia, compared to 46.3 million trips of 50 miles or more from home for Americans during Thanksgiving.

So now we all have an idea of the scale of this annual event of the Chinese. With less than two months to go for Chinese New Year 2016, let’s take a look at how brands and retailers can take advantage of this lucrative holiday season. Below are some noteworthy trends:

1. Consumers show signs of fatigue to cookie-cutting sale promotions, resuming a rational approach to seasonal shopping

Similar to the UK and US, large-scale sale promotions during festive seasons are not uncommon in mainland China – on top of traditional ones like Chinese New Year and the National Day are various ecommerce shopping festivals like Alibaba’s Singles’ Day and more throughout the year.

Getting exposed to endless streams of sale promotions in recent years, consumers in China start showing signs of fatigue to cookie-cutting festive promotions. Instead of loosening their purse strings for a shopping spree at every single promotion, Chinese consumers are gradually resuming a rational shopping approach. When it comes to Chinese New Year, personal grooming (apparels, shoes and accessories) and gift giving are two major areas of where the money goes. Stronger engagement with traditional festivals to which they are culturally and emotionally attached is also spotted.

2. Gift giving as an act to communicate personal brand and aspired lifestyle

Domestic consultation firm Premiere Consulting recently looked into the gift-giving market in mainland China. Instead of looking solely for bargains or traditional gift options, China’s middle-income group – the rapidly expanding driving force of the country’s consumption market – now looks for tasteful quality items that communicate their personal brands and aspired lifestyles (even they are not the one to use them). The average price per gift item ranges between RMB1,000-3,500.

To international advertisers, this translates into the importance of packaging and communicating their products or services as tasteful, high-end, quality picks if they wish to impress their target gift-givers in mainland China this Chinese New Year.

3. Affluent Chinese travelers remain a strong force in the global luxury industry

Although luxury sales in mainland China remains slow in 2015, Chinese’s spending abroad is still impressive overall. Without the heavy import duties, luxury products are much cheaper for Chinese shoppers in Europe, and prices can be up to 40% lower. Chinese consumers also have more confidence in the luxury goods’ authenticity when they are bought overseas. According to consumer intelligence firm Bomoda, 75 to 85% of Chinese consumers luxury spending originates outside of China, with Europe and Japan takes up more than 50% of the pie, and is still rising.

In the first six months of 2015, Chinese tourist spending overseas was up 75%, and up 72% in August alone, a recent Global Blue report tells. The average amount that European companies collected per Chinese tourist in 2015 is €981 (USD1,108), while spending on leather goods in Europe grew by a staggering 93.7%. It is important to engage the 2016 holiday travelers-to-be before they get on the plane in February.

With these in mind, here are some suggestions for overseas brands and retailers looking to tap into the lucrative shopping and outbound travel season:

1. Engage your target consumers with relevant ad content and seasonal offers

As Chinese consumers become more experienced shoppers, it is getting more difficult to attract their eyeballs and convert them into actual buyers. Knowing that personal grooming and gift giving are the two major areas of your target consumers’ spending during the holiday season, it is important to engage them with relevant ad content and product offers that match their need to boost your marketing and sales ROI.

When it comes to festive season promotions, timely Chinese New Year topics and seasonal product offers are effective triggers of user click-through and interactions with your brand.

Considering the scale and complexity of the fragmented digital media landscape in China, programmatic buying is a must to precisely reach and engage your specific target audience with the right content and offers across the screens and digital channels.

2. “Mobile + Social + Ecommerce” is essential for your digital marketing mix

According to a recent survey by MasterCard, with the prevalence of smartphones, 95% of consumers in China now use technology at some point during the shopping process. In Alibaba’s Singles’ Day festival this year, 70% of transactions on Tmall were completed via mobile.

Considering Chinese consumers’ mobile-first behavior and deep engagement with domestic social media – predominantly Tencent’s omnipresent WeChat and Qzone, a digital marketing mix of “mobile + social + ecommerce” becomes essential for brands to precisely reach the right audience, and efficiently funnel potential customers from social to their promotion sites or ecommerce stores.

3. Hoteliers and restaurateurs should get your brands in front of the eyes of Chinese travelers when they plan their trips

A recent survey shows that some 80% of Chinese travelers have used an electronic device such as a mobile phone, desktop or laptop to plan and book travel, compared with only 53% last year.

Brands in the hotel, restaurant, entertainment and experiential consumption industries should communicate your brand at multiple digital touchpoints when your target Chinese travelers plan their trips online to influence preferences and purchase decisions.

As always, eye candies work magic. Use quality and original visuals and videos in your campaigns to capture eyeballs and boost click-through rates. Get your Chinese website ready and make site navigation easy so potential consumers can readily access the information they need after having clicked through your ad and landed on your site.

4. Keep your brand at the top of Chinese travelers’ minds before they get on the plane

Just as travelers research hotels and restaurants online before embarking on a trip, they are also using online media to plan their shopping destinations.

For retailers, it is important to familiarize your target consumers with your brands and let them know your products on offer, especially those that are not available in their domestic market. For luxury brands, a storytelling campaign would be a sensible approach to create aspirations.

Native in-feed and video ads on mobile are perfect for branding, storytelling and creating aspirations. According to a native ad effectiveness study, consumers looked at native ads 53% more frequently than banner ads. Native ads also registered an 18% higher lift for purchase intent and 9% higher lift for brand affinity responses than banner ads.

Darren Jacobs, Head of Europe at iClick Interactive Asia Limited

Tel: 07874024204

Email: darren.jacobs@i-click.com

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