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Chinese New Year: 2019 retail analysis

The Lunar New Year is now an essential event in many brand’s calendars.

Flight bookings to the UK over Chinese New Year were up by 24% this year. The influx of Chinese tourists that come with it set to give the UK and US retail the boosts it needs for 2019. So what’s the data telling us about how fashion celebrated Chinese New Year?

Did the Year of the Pig bring home the bacon?

CNY sales reached record height as people in China splurged 1.01 trillion yuan ($149 billion) across restaurants, shopping malls and online during the week-long holiday. While this equals 8.5% growth on last year, it’s the smallest increase for the event since 2011. This signifies the current pressure on China’s economy as consumers continue to tighten their purse strings.

It’s uncertain whether this weakening momentum will contribute to the slowing of luxury goods consumption in the Chinese market.

Major Players

Chinese New Year promotions ramped up in 2019, with department stores like Selfridges & Co. pushing their month-long campaign across Chinese social media platform, WeChat. The digital campaign asked users to take a personality test and offered a New Year outlook based on their answers. Other retailers stuck to the basics and launched pig-themed apparel.

There was a 70% increase from last year of CNY-specific product in the UK while the US market boasted growth of 92%.

Chinese New Year

Luxury brands were backing this expansion, making up 67% of CNY themed product in the UK and 56% in the US. It also reveals that the US mass market is more invested in this trend than in the UK. This is something for British fast fashion brands to keep in mind for next year, especially as VisitBritain aims to double the spend from Chinese visitors in the UK to £1 billion annually by 2020. The top brands stocking this product were major luxe players such as Armani, Gucci, and Dolce & Gabbana. Mass brands who invested included Superdry, Aldo, and G-Star.

Campaigns of note

So, when is the best time to advertise? We saw capsule collections trickling online in September. LN-CC was the first retailer to promote this holiday via newsletter on January 3rd. Email newsletter communications gained momentum in the final week of January, with campaigns peaking the first week of February in line with the majority of CNY product drops. The most popular day for newsletters was on Chinese New Year, the 5th of February.

There was no shortage of adorable pigs during this holiday. In fact, the US market experienced a 16% growth of CNY-related communications, while in the UK it bumped up by 99%.

As a key event to drive sales for the year, it’s crucial for luxury brands to get their CNY marketing on point.

Targeting both Western and Chinese consumers was essential. Gucci promoted their capsule collection worldwide using WeChat. The campaign paid homage to the Three Little Pigs which were emblazoned across products including their signature Ace sneaker. The cute piglets were photographed with the models across richly decorated sets. Naw.

It is estimated that by 2020, the Chinese Generation-Z cohort will make up 40% of global Gen-Z purchases. This makes CNY an optimal period to be tapping into this younger consumer’s spending. Longchamp executed this by joining forces again with Chinese blogger Mr Bags, they designed a collection of bags featuring snouts and curly tails. Instead of models, the campaign used cartoon illustrations – capturing the attention of a younger audience.
It’s a no brainer that brands need to do their homework and understand cultural practices when promoting any holiday. Even in the wake of the Dolce and Gabanna controversy, some brands missed the mark. Weibo users described Burberry’s unsettling family portrait as ‘uncomfortable’. Bvlgari’s not-so-kosher campaign, featuring a pun on the Chinese word for ‘pig’, was pulled after some confusion.

Spring festival product trends

Analyzing arrivals across both the UK & US market, tops make up the majority of CNY products at 38% of the total assortment. This was driven by T-shirts featuring pig motifs as the most dominant trend.

We are starting to see CNY product shift from gifting into apparel as more brands get involved. While accessories increased by 13% YoY, tops clocked an impressive 82% growth.

For kidswear, the Year of the Pig proved an opportunity to push licensing. Despite previously being labelled as “gangster” and censored, Peppa Pig won the hearts of China. Her new movie: Peppa Pig Celebrates Chinese New Year was released in China on February 5th. The build-up increased demand for the British cartoon, especially with Chinese tourists. From January 1st to CNY, the number of new Peppa Pig branded apparel in the UK has risen 101% compared to the same time last year.

The aftermath

Chinese New Year

Discounting was not a major theme in CNY advertising. Three days after the event, the UK and the US started discounting their themed assortments at 0-10% reductions. The US has also taken a larger price cut with the majority of these items now discounted between 30-40%.

Looking ahead to the Year of the Rat

The rat is a sign of wealth and surplus. Due to the uptick in gold, which is synonymous with the Lunar New Year, we expect to see this color dominating alongside red. Next year, the holiday falls on January 25th, so use mid-January as an opportunity to push your assortment. For the global event, offer free shipping as a hook.

We’d like to wish all our customers celebrating Lunar New Year a very happy and prosperous year ahead!