How eCommerce sellers can prepare for Chinese New Year
It’s the annual opportunity you can’t afford to miss. Here’s how to get the most from it.
If you’re not familiar with life in China, the annual lunar new year in late winter is by far the most important festival in the calendar.
The scale is enormous - and so is the opportunity.
Here’s everything you need to know.
What is Chinese New Year?
The cultural significance of Chinese New Year can’t be overstated.
Think of it as like Christmas and (western) New Year’s rolled into one, with the added impact of a whole country of well over a billion people all heading home to see their families.
For many millions of Chinese, this can mean a lengthy journey from coastal cities to their hometowns inland – it’s easily the biggest regular movement of people in the world, and unwitting tourists are often caught by jams in the transport system.
The festival is a time for family reunions, honoring ancestors, and ushering in good luck and prosperity. People exchange red envelopes containing money, decorate their homes with auspicious symbols, and enjoy special meals with loved ones.
The first day of Chinese New Year falls on the first new moon that appears between 21 January and 20 February (hence lunar new year), but both the festivities and the business impacts stretch significantly beyond that individual date.
What are the key dates for Chinese New Year in 2024?
This year, Chinese New Year falls on 10 February (a Saturday) and the entire festival lasts for 15 days.
These are the key dates to bear in mind:
- Early February: Chinese manufacturers will begin to slow down production
- 8 February: many Chinese people begin their journeys home
- 9 February: the majority of Chinese families will have a celebratory reunion dinner
- 10 February: Chinese New Year begins – the next five working days are public holidays
- 17 February: official public holidays end, but many Chinese people will take more time off; it will take some time for business activities to return to normal
- End of February: most business operations will be fully back online.
What are the likely business impacts of Chinese New Year?
As mentioned above, the most noticeable impact is the temporary shutdown of many businesses in China as people take time off to travel and celebrate with their families. Factories, production facilities and logistics operations may close or operate with reduced capacity during this period.
For e-commerce sellers and online retailers, this can result in disruptions to supply chains, delayed shipments, and increased competition for resources. Additionally, consumer spending patterns change as people prioritize buying gifts, festive decorations, and special foods for the celebrations. Understanding these shifts in consumer behavior is crucial for adapting your marketing and sales strategies during the Chinese New Year season.
However, it's not all challenges.
Chinese New Year also represents a unique opportunity for e-commerce sellers to tap into the festive spirit and engage with Chinese consumers on a more personal level.
By incorporating Chinese New Year themes into your marketing campaigns and promotions, you can better connect with your target audience and drive sales during this celebratory season – and, of course, the spike in gift-buying can in turn mean significant spikes in demand for a broad range of products.
How can you plan for Chinese New Year?
There is more detail on what you can do to maximize the Chinese New Year opportunity – here are the core bullets:
- Bake in cash readiness
The ability to source financing reliably and quickly will make sure you have the ability to make opportunistic additions to your inventory in response to demand, and deploy the marketing strategies that will get them in front of the right people.
- Unleash your inventory
Fail to prepare, prepare to fail: with events like Chinese New Year that you can anticipate, you should maintain a buffer of safety stock to accommodate unexpected spikes in demand, while monitoring inventory turnover ratios.
- Work with your suppliers
If you negotiate with vendors for flexible payment terms such as extended credit or staggered payments, it’ll become substantially easier to improve cash flow during busy periods like Chinese New Year.
- Plan for last-minute inventory boosts
It’s a good idea to leverage your historical sales data and information on market trends to identify high-demand items. You can then allocate resources towards restocking these products to ensure you're not leaving potential revenue on the table.
- Optimize your online presence and marketing
Make sure your website is polished, user-friendly, and capable of handling increased traffic – and most of all secure. Paid campaigns online and boosts to your social media strategy can capture potential customers looking for gifts.
- Streamline your operations for efficiency
Evaluate your current operations to identify bottlenecks and inefficiencies. There are many solutions on the market now that automate routine processes, allowing your team to focus on high-impact, revenue-generating activities.
- Nurture customer loyalty
Provide exceptional service, exceed expectations, and communicate proactively with your customers and they’ll come back for the next Chinese New Year, and the next, and the next…
- Stay agile
Keep an eye on industry trends, evolving customer preferences, and emerging technologies. Be prepared to pivot your strategy based on real-time data and feedback.
