Spring Festival Promotion: Opportunity and Challenge
Buying 'Nian Huo' is a traditional activity of Chinese consumers, and how is overseas imported merchandises fitting in?
by Azoya
The annual Spring Festival is an important, yet special marketing Chinese event for e-commerce businesses. A massive amount of Chinese people will be traveling during the Spring Festival holiday. According to forecast by China’s Transportation Bureau, over 3 billion trips will be made this year’s Spring Festival. Top travel purposes are family reunion, tourism and social activities, which are great opportunities for retailers, because people will need to shop for family members and friends, a tradition that’s called buying ‘Nian Huo’.
‘Nian Huo’ generally means merchandises for the Spring Festival that carry good wishes. Chinese consumers are more inclined to purchase high-quality products in bulk to send out to relatives and family members. To fit into Chinese Spring Festival tradition, many local products will be launching customized packaging in red, which symbolizes good fortune.
Image from Sohu
Walmart China's 2018 report on 'Nian Huo' market highlighted 3 trends:
Chinese customers have bigger appetite for overseas imported products;
Increased consumption of wine and liquor products;
Chinese customers demands products that are customized for the environments;
To meed the demands of the Chinese customers, Walmart China launched the 'one-stop shop' program in over 400 storefronts in China. The offline stores have increased number of imported products, customized private labels that fit into the festive decoration and increased variety of products to meet different purchase needs.
Buying 'Nian Huo' across the border is a new fashion
While offline outlets remains a major channel to purchase holiday supplies, cross-border e-commerce is emerging to become another way of shopping 'Nian Huo'. Many Chinese consumers can shop for products that are freshly imported, which have better quality and brand prestige compared to domestic products. Domestic cross-border online shopping platforms have responded to the customer demands with customized collection and promotion cmapaigns.
Tmall Global, JD, Kaola and Amazon China launched their own promotion campaigns to meet the festive purchase demands. A new online sales holiday were created - 'Nian Huo Day' - ranging from a few days to a week.
Platforms | Promotion Period | Offer |
|---|---|---|
| Tmall Global | January 24th to 28th | 50% off; coupons |
| Kaola | January 10th to 28th | Coupon package; new users coupons |
| JD Worldwide | Late January | Discount zone focus on different categories every day |
| Amazon China | Late January | Discount on gifts; special discount for foods and liquor |
NetEase Kaola's Festival Promotion Featuring Traditional Chinese New Year Symbols
The challenge for pre-Spring Festival shopping holiday is mainly on the logistics. Festive supply purchase demands good fulfillment and logistics capability, since customers demand quick delivery of their products, and if retailers fail to deliver products before the events, it may result in dissatisfaction of customers.
Another special situation about Spring Festival promotion is the temporarity inaccessible delivery service. SF Express, one of China's largest express service will be stop receiving customer orders from Febuary 14th to Febuary 22nd. In some regions, the delivery services will pause for even longer time. Due to the limited window of delivery, most cross-border retailers would plan the promotion prior to Febuary. Having products stock in bonded warehouses or Hong Kong warehouse would make delivery even quicker.
International retailers are catching up
While Spring Festival remains to be a Chinese holiday, but some retailers have responded quickly to the local demand of overseas products as their festival whish list.
Feelunique has launched a Chinese New Year special promotion on its Chinese language website, and features a few festival gift planning tricks; BabyHaven, a US retailer focused on baby supplies, launched a promotion on SKUs stocked in Hong Kong warehouses.
The main challenge for international retailers are the logistics. Having products delivered directly from overseas warehouses to Chinese customers could face delivery, and to optimize delivery, retailers need to improve not just the logistic service, but also the fulfillment process, to make sure that orders could be dispatched faster.
Having inventory stocked in near-shore warehouses could be a supplementary solution. But this would require retailers to plan ahead and make promotion plans and sales forecast in advance.