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4 consumer trends to factor into your 2021 Chinese New Year marketing plans

December 7, 2020 |   Ada Wang

As carols start to ring out and the ‘silly season’ starts in earnest, it can be easy to be distracted by Christmas. The savvy marketer with an eye on China, however, will be looking ahead to Chinese New Year – and rightly so.

With this year’s celebrations very suddenly curtailed by the outbreak of COVID-19, next year’s Chinese New Year celebrations for the Year of the Ox, which will begin on 12 February 2021, are expected to be huge. If the most recent Chinese online shopping festivals are any indicator, we can expect sales to once again beat previous benchmarks – despite China still being in the midst of economic recovery, the 618 Festival, the Qixi Festival and Single’s Day all saw record-breaking sales.

That being said, next year’s Chinese New Year won’t be business as usual. Even though the virus is now just about eliminated in China, and consumer confidence is currently quite high relative to the rest of the world, there are still impacts from coronavirus that will continue to reverberate into the new year and affect the way consumers spend.

Let’s take a closer look at the 4 key consumer trends you must be aware of before mapping out your 2021 Chinese New Year marketing initiatives.

Increasing digitisation 

Even before the onset of COVID-19, China was a global digital powerhouse, with a digital environment well advanced of many other developed nations. The coronavirus pandemic has only served to accelerate their digital evolution, with companies in China, particularly those who already had well-developed digital solutions, able to quickly pivot to observe physical distancing and drive rapid growth of a “stay-at-home” economy.

Increasing digitisation was also seen in spaces that are traditionally less digitised, such as those that tend to require or benefit heavily from physical interactions. The use of virtual property showrooms, for example, grew 35 times from January 2020 to February 2020, according to a recent McKinsey report. Livestreaming has also continued to grow in leaps and bounds – since the epidemic began, Taobao has registered 30,000 livestreaming merchant accounts every day, leading to a sevenfold growth in accounts.

This transformation of consumer behaviour is likely to endure into 2021. Based on a mobile survey of Chinese consumers conducted before, during, and after the peak of the epidemic in China, about 55% of consumers reported they are likely to continue buying more groceries online after the peak of the crisis.

Chinese New Year marketing tips 

  • Digital channel audit: With consumers continuing to rely heavily on digital channels, brands need to ensure their digital channels are up-to-date, well-integrated and functioning at top capacity. Consider also the omnichannel consumer experience.
  • Livestreaming: Livestreaming will continue to be an important way to reach Chinese consumers, so it may be worth integrating this into your marketing campaign.
  • Online salesforce and digital consultation: While Chinese consumers are less inclined to go in store these days, they are still discerning shoppers that like to do their research about a product and appreciate a personal touch when it comes to customer service. Brands could use dedicated WeChat groups or mini programs, manned by real salespeople or consultants, in order to continue to forge deeper relationships with their customers in the lead-up to Chinese New Year.

More at-home activities and events

In the wake of the coronavirus pandemic, people have been spending much more time at home. Even as restrictions eased and movement around the country increased, Chinese consumers’ offline consumption was still only at 84% of pre-COVID-19 levels four months after the virus’s peak. Consumers are also shopping offline less at nights and weekends – previously peak shopping times in China – which shows a reluctance to spend time in crowded environments.

Since the outbreak, consumers aren’t just shopping online more; they’re also embracing other digital activities, such as remote learning, online workout programs and e-sports, just to name a few. Consumers are also eating and drinking more at home, leading to increased purchases of alcoholic beverages, fresh food and kitchenware. Consumers have also indicated they intend to continue these activities, with 43–91% surveyed saying they intended to continue activities like getting food or groceries delivered and learning remotely post COVID.

This is a trend that is expected to continue into Chinese New Year, as people decide to err on the side of caution. We may see more people choosing to dine at home with their families (after all, eating out at a restaurant can be tricky when you’re wearing a mask), and purchasing gourmet products such as wine or seafood to mark the special occasion instead.

Chinese New Year marketing tips

  • At-home consumer experiences: With consumers eschewing offline events, brands should consider how to bring that same level of excitement to their Chinese New Year online events. Budweiser, for example, launched DJ livestreams and e-gaming events.
  • Consider how consumers can make the most of being at home: Chinese New Year could be the perfect time to promote things like online courses or online fitness programs, as people look ahead and make resolutions for the following year.

Changes in consumer spending

Prior to COVID-19, China’s affluent younger generation had never experienced a domestic economic downturn. Previously the engine driving Chinese consumption, the virus has forced those in their 20s and 30s to seriously reconsider how they manage their finances.

These consumers are saving more – according to a McKinsey survey, 42% of young consumers intend to save more money as a result of the virus – and they are also spending less, and being more discerning about what they spend their money on. This means less impulse buying, and more planning about what they are going to purchase.

As consumers become more cautious of their spending, we’re seeing more trade-offs, with people opting to buy less, but buy higher-quality products. According to a post-epidemic survey, close to half of Chinese respondents intended to live more frugally and seek value-for-money when selecting products, while 36% were more willing to spend more for better-quality products. There’s also evidence that consumers are seeking higher-quality in necessities such as sanitary products and fresh produce, while seeking value-for-money in non-essentials liked hair and beauty products and large home appliances.

“We see clearly that there are two groups of customers,” said Sean Shen, Greater China customer and strategy competence leader at EY, in the wake of this year’s Single’s Day. “One group is taking advantage of promotions, buying up necessary stocks for the future. A different group of customers want high-quality products in the premium segment because of the travel ban this year, so they’re willing to spend more on the goods and products they used to buy overseas.”

Chinese New Year marketing tips 

  • Adapt messaging: Is your product essential or non-essential? If the former, consider ways to communicate its quality; if the latter, show consumers why your product is good value-for-money.
  • Longer lead times: With consumers doing even more research than previously (in one survey, 45% of respondents said they spent more time researching brand and product choices than before the pandemic), it may be worth starting campaigns even earlier than normal in order to increase the number of brand touchpoints with consumers.

More focus on health and wellness

Having lived through a global pandemic, it’s no surprise that consumers are more health-conscious than ever, and wanting to do all they can to keep themselves and their families safe. According to a McKinsey survey, 72% of respondents indicate they want to pursue a healthy lifestyle, while 60% of those in large cities check ingredient labels post-epidemic. More than 70% of respondents also said they will continue to spend more time and money purchasing safe and eco-friendly products.

Chinese New Year marketing tips 

  • Promote the health, safety and eco-friendliness of your products: Find ways to promote the health benefits of your products, as well as show how safe and eco-friendly your products are, as these are aspects that really resonate with consumers.
  • Cultivate trust: With highly discerning consumers, trust is vital. According to a McKinsey survey, 89% of respondents said they turned to brands they trusted, while around 75% said they have convinced other people not to use brand they felt were no acting appropriately during the pandemic.

Will the year of the Ox be your year? 

After the dumpster fire that was 2020, consumers will be geared up to make the most out of 2020 – and brands will need to be ready to capitalise on that momentum. By making sure your digital channels, such as your website and WeChat account, are properly established and performing well, you can set your brand up for greatness this Chinese New Year.

Don’t feel like you’re fully prepared for this important time of year in the Chinese calendar? Sinorbis can help. Contact us today to find out how.

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