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How global retailers are celebrating Chinese New Year

We examine the growing retail importance of Chinese New Year outside of China, looking at data across luxury gifting and mid-market apparel.
Chinese New Year

China is still the superpower when it comes to luxury. In 2017 the Chinese market accounted for 32% of luxury sales globally.

With 500% growth in luxury products online since 2009--and online projected to account for 19% of luxury sales by 2025--it makes sense that global brands and retailers are looking to the Chinese calendar to find opportunities to reach Chinese shoppers around the world.

We saw it late last year with Single's Day, and it's especially noticeable this week with a significant increase in retailers participating in Chinese (or Lunar) New Year.

Chinese New Year is growing globally, and fast

In the last three months, the number of CNY items in stock had risen 85% compared to three months before CNY in 2017 (which fell on January 28th).

And it's working! Consumer demand for the themed products has soared too. Year-on-year increase in product sell outs has increased by more than six times, or 675%.

In the US, items celebrating Chinese New Year are up 85% this year, and sell outs have grown by almost 700%!

A luxury emphasis

Those brands that are honoring the Chinese calendar Year of the Dog are majority luxury: 52% of products currently in stock are from luxury brands. The biggest players are Dolce & Gabbana, Gucci, Salvatore Ferragamo, DSquared2 and Kenzo with emphasis on handbags, tops and small leather goods.

These luxury items make great gifts symbolizing fortune in the year ahead - especially a new bag or purse to carry all your new wealth in the new year!

But mid-market is in on it too

It's also interesting to note five windows in Macy's New York flagship entirely dedicated to the event this week, evidence that mid-market brands are getting in on the act. And H&M has dedicated imagery for their Hong Kong homepage.

How global retailers are celebrating Chinese New Year | EDITED H&M has a dedicated homepage update for its Hong Kong site.

Adidas, Nike and Converse footwear became the third biggest category after tops and accessories. Early this year, Adidas launched a limited edition of their most popular styles with a special “CNY” logo, 51% of which have already sold out.

Interestingly, this category might not work so well in China where some believe it's bad luck. The word 'shoe' sounds unfortunately like 'evil' in Mandarin and 'rough' in Cantonese.

Limited edition and special collections pushing prices up

This year, the average price of products increased by 68% to $421, compared to a year ago. Some of the most expensive products available are the Judith Leiber clutch bag at Harrods for $6,982.25, Gucci's men’s bomber jacket for $3,900 and Moncler's limited edition bulldog print coat at $1,729.

But it's not just the big gestures - small works too. Kate Spade has done 'Chow Chow' keychains, coin purses, card holders and phone cases, Guerlian has limited edition lipstick and Aldo has $50 dog-topped pool sliders.  

The majority of items are red (bringing good luck for the new year), feature a dog graphic or appliqué and have added value with embroidery.

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Opportunity to capture full price sales

In the US, 14% of products dedicated to Chinese New Year are currently discounted by an average of 34% off, compared to the overall US online market, where 35% of products are on discount by an average of 43% off.

CNY isn't a particularly bargain-driven spend for the customer, who is prioritizing something new and special. There is no need to sacrifice margins in order to be noticed. Instead build a longer lasting narrative around making a considered purchase for starting the new year right.

Here are examples of how luxury retailers are promoting their CNY offering in their newsletters:

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Chinese shoppers are the most clued-up and digitally advanced global consumers and Chinese retail experiences are among the best in the world. Beyond this calendar date, we expect luxury brands to grow their focus on this market, catering to customer values and cultural events with even greater sophistication.

The great thing about Chinese New Year is the product is so easily identifiable and measurable, that by looking at data you can gauge just how big the opportunity is and exactly what point you should dive in.

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