Chinese New Year spending frenzy has just got bigger
The happiest-time-of-the-year among Chinese communities offer lucrative opportunities to those with the know-how and know-who. In the first five days of Chinese New Year (CNY) 2018, Chinese movie box office receipts totaled RMB4.6 billion, a rise of almost 60% from a year earlier.
On the CNY eve, more than 300,000 Chinese families ordered reunion dinner delivery through Alipay and Koubei, a restaurant review and local services platform under Alipay. On the other hand, Alibaba said the sales of imported fresh food on Tmall jumped by about 300% year-on-year, with Chilean king crabs, Boston lobsters, and fish from New Zealand being the most popular.
This is the Year of the Dog according to Chinese zodiac. Also known as the Spring Festival, Chinese New Year marks the beginning of a new year and spring on the lunar calendar. Time for family reunions, red packets, colorful celebrations, and sumptuous feasts, among many more folk customs. To marketers and businesses, the associated spending spree, which has got even more exciting, flashes not-to-be-missed room for growth. CNY celebrations today are on-the-move, digital, and big-budget.
Travel, travel, and travel more
In China, most employees have at least seven days off work, with many enjoying two weeks of holidays; and for students, one month away from school. The Chinese New Year holiday is a global “Golden Week” for overseas tourist destination according to China National Tourism Administration (CNTA). By 2022, it is forecast that China will be the world’s largest source of outbound tourism demand.
Shanghai-based travel website Ctrip’s pre-2018 holiday report reveals people from more than 200 Chinese cities had booked outbound tours to over 700 cities in 68 countries and regions, with the tourists expected to spend US$1,510 each on their trips. Thailand, Japan, Singapore, and Vietnam are the most popular destinations while some favor the Nordic countries and the United Arab Emirates, or travel far to Antarctica.
CNTA data also indicates that outbound travel by Chinese residents grew 270% since 2008 by 2017 and is forecast to rise to 200 million departures by 2020. Notably, the outbound expenditure increased 730% in 2017 when compared to outbound expenditure in 2008.
According to a spokesperson of travel intelligence agency ForwardKeys, bookings for outbound travel during Chinese New Year, in February 2018, are currently 40% ahead of where they were at the same time last year.
How about inbound travel on the Chinese mainland? CNTA’s most recent figures from February 23, this year say that Spring Festival 2018 saw 386 million inbound travelers, up 12.1% from 2017. The inbound tourism revenue grew by 12.6% year-on-year to RMB475 billion in 2018. The top ten most popular provinces include Guangdong, Sichuan, Hunan, Jiangsu, Henan, Anhui, Shandong, Guangxi, Hubei, and Zhejiang. Finer taste, more discerning demand, and enhanced diversity were also noted in the Spring Festival inbound travel this year.
Chinese New Year goes digital in a lot of ways
The red packet or “hong bao” practice, gifting money in red envelopes, is a distinguished Chinese New Year tradition. With the world’s largest internet population and smartphone market in China, the red packet has conveniently gone digital in China.
WeChat’s omnipresence in the Chinese New Year
Tencent reported recently that 768 million people use its WeChat, the most popular messaging app in China, to send out digital red packets, up 10% from 2017. The 768 million senders represented about 78% of the total 980 million monthly active users of WeChat, and 55% of the entire population in China.
In 2015, three billion digital red packets were sent through WeChat. That surged to 46 billion in 2017, according to Bloomberg. In addition, the “red packet” function can also be found on platforms of Alibaba and a number of other Chinese companies.
A jackpot for those selling what Chinese consumers want
It is obvious that reaching the Chinese consumer is a key growth strategy for consumer-facing businesses given China’s sustained economic growth, rising incomes, 1.3 billion consumers, and expanding middle class. The Chinese economy is the world’s second largest.
Chinese residents stepped spending during this year’s Spring Festival. The retail and catering sectors in China raked in RMB926 billion yuan from February 15 to 21, equivalent to an increase of 10.2% compared with 2017, data from the Chinese Ministry of Commerce shows.
High-tech products are the latest gift trend, indicated by numbers from Taobao, JD.com, and Suning.com. Added to all this is the old custom of getting new clothing and shoes to symbolize a fresh start.
Solving the puzzle of reaching Chinese consumers – doable with the know-how and know-how
What China’s middle-class want
China’s 300 million middle-class population accounts for 30% of the total global population, and it is growing. Chinese consumers today spend more on lifestyle services and experiences as they move from mass to premium segments. Happiness and a balanced life are increasingly valued, as evidenced by the rising trend of tourism.
Data is crucial, especially in China
Data is king if companies want to connect with Chinese consumers who make up the largest group of app and internet users in the world, in particular, segment-by-segment. China’s e-commerce sector is worth $600 billion.
Timing
Some prefer well-planned vacations while others are the last-minute type. It is important to leverage behavioural insights (data again) and deliver influential messages across all relevant touch-points at the right time.
Marketing dollars ought to be spent on high-potential prospects and adopting a data-driven approach to precisely reach the Chinese wallets.