On New Year's Day of 2024, the Chinese Department of Culture and Tourism revealed that over the three-day holiday period, domestic travel saw a remarkable surge, reaching 135 million travellers with an increase of 155.3%. The resulting domestic travel expenditures amounted to 79.73 billion yuan ($11.3 billion), reflecting a 5.6% growth compared to the corresponding period in 2019. This amount shows a positive outlook towards consumption in 2024. In this article, we will talk about people’s consumption trends during the holiday season and how brands could leverage their demands.
The Chinese Ministry of Commerce has designated 2023 as the 'year of economic recovery' and 2024 as the 'year of economic promotion.' To respond to the call, several regional governments have released consumer vouchers to stimulate consumption at the beginning of 2024. This initiative will boost the overall Gross Merchandise Value (GMV) by approximately 3 to 6 times compared to scenarios without vouchers, as reported by the Development Research Center of the State Council.
Consumption Tendency in the New Year Season
Service and experience consumption are on the rise during this Chinese New Year vacation. People are eager to travel and engage in outdoor activities, with winter sports gaining significant popularity. Trendy travel destinations, such as Harbin in northeastern China, have witnessed a substantial influx of enthusiasts, contributing over 5.91 billion yuan ($826 billion) to the travel sector within three days. Furthermore, movies, exhibitions, and concerts have also become favoured choices among consumers this year.
As people’s awareness of self-pleasure increased after the pandemic, they care more about the emotional value of the products. For example, the New Year vacation would drive individuals to indulge themselves and their families by acquiring products they have long desired. Nostalgia is another motivation for people to place an order. They may miss the Spring Festival from childhood, which opens avenues for brands to engage in collaborations or employ storytelling marketing strategies. Moreover, there is a willingness among people to invest in symbols of good luck, whether through temple visits, blind boxes, or lotteries. This reflects a cultural inclination to associate positive and fortunate elements with their celebrations, creating business opportunities to cater to these preferences.
The New Year vacation is a significant period for gift consumption, with individuals opting to enhance their purchases for their parents in the realms of well-being (such as health care products), intelligence (including smart home furniture and massage devices), and experiential products (like tours). When it comes to gifts for friends, there is a preference for innovative or handmade items, reflecting a desire for unique and thoughtful gestures.
In adherence to Chinese customs, the upcoming year of 2024 is designated as the Chinese zodiac 'Dragon' year, sparking trends in products infused with 'dragon' elements. This cultural significance is likely to influence various aspects of consumer goods, embracing the symbolism associated with the dragon in Chinese tradition.
Chinese Zodiac 'Dragon'
Platforms' Active Marketing Events
Alibaba Mama, the official marketing platform of Alibaba Group, released the second edition of the "Alibaba Mama Operation Guide" themed around the 2024 Spring Festival for brands and merchants, making them familiar with the playing methods and guiding them to fully leverage the promotion event.
Another e-commerce giant platform JD.com, hosts the Home Appliances and Furnishings Spring Festival Event (“京东家电家具年货节” in Chinese) from January 17th to February 3rd. It will cover a variety of products, including New Year gift boxes, popular items, customizations for the Year of the Dragon, traditional red-themed products, and affordable New Year goods.
Douyin (Chinese TikTok), the fastest-developed e-commerce platform in China, is not one to miss this opportunity. The Douyin New Year Feast (“抖音新春吃喝玩乐节” in Chinese) has opened for merchant recruitment from January 25th to February 17th, with a focus on key categories including catering, alcohol and travel, and comprehensive offerings.
Douyin (Chinese TikTok) 'New Year Feast' Promotion Post
Potential Industries: Fashion, Beauty, Wellness and Pet
Embracing the tradition, Chinese individuals opt for new clothing during the Spring Festival, symbolizing a positive start to the new year. Fashion brands could seize the opportunity to produce some limited edition clothes that contain Chinese culture or dragon zodiac. This contributes to increasing the festival vibe, showing respect for Chinese culture and gaining the trust of the consumers.
Beauty products also have more needs during the new year's vacation. With more social interactions during the holidays, whether it's giving New Year's greetings in person or travelling with family, there's a rising demand for makeup and thoughtful gifts. Preparing limited edition products of the dragon year and the gift set would cover the most likely scenarios people would purchase during the new year.
After the pandemic, people's awareness of health and fitness increased, thus, choosing wellness as a gift becomes a prevalent trend, particularly for older individuals, children, and students, highlighting a shift towards health-conscious and thoughtful presents.
The penetration rate of households with pets in China increased from 13% to 22% from 2019 to 2023. However, it is still relatively low compared to the U.S.(70%) and the EU (46%), so China has great potential in the pet economy, according to JD.com and Pethadoop. The increasing number of households with pets means more people are bringing their furry friends home for the festival, creating a surge in the demand for pet products.
Tips for Brands to Leverage the New Year Shopping Season
1. Leveraging e-commerce platforms for marketing: Capitalize on e-commerce platforms for effective marketing by participating in diverse campaigns and promotions hosted by these platforms. This strategy not only builds brand presence but also drives sales through increased visibility.
2. Short videos and live streams are still essential tools: Short videos and live streams continue to be crucial tools for seeding products and driving sales. Integration of both will increase the conversion rate.
3. Providing a unique shopping experience: stand out by providing a unique shopping experience that leaves a lasting impression on consumers. This can include personalized service, easy navigation, community participation, special deals etc.
4. Gift sets with thoughtful packaging: enhance the appeal of your products by offering gift sets with dedicated and aesthetically pleasing packaging. Thoughtful presentation adds value and makes the purchase more special for the consumers.
5. Incorporating Chinese traditional cultural elements: infuse festival marketing with elements from Chinese traditional culture, such as dragons, nostalgic symbols, lucky words, and more. This cultural connection adds depth to your brand and resonates positively with the festive spirit.
In conclusion, the economic recovery observed at the beginning of the Chinese New Year in 2024 signifies not only a surge in domestic travel but also a positive outlook towards consumption. With the government's strategic initiatives, the promotion events of several e-commerce platforms and people’s willingness to spend on the festival, we could expect a satisfied consumption performance during the new year’s holiday, as a good start to 2024’s economy.