Featured Jan 22, 2020 5 min read

How are retailers strategizing for Chinese New Year?

Preparing for the millions of consumers set to travel during the Lunar New Year before the coronavirus outbreak grounding flights, CNY product assortments grew by 45% YoY.

Chinese New Year

This year, the number of Chinese tourists traveling overseas during the holiday was predicted to grow around 13%. However, the outbreak of coronavirus in Wuhan saw flights grounded and Lunar New Year events in major cities canceled. 

Like Singles Day, Chinese New Year (CNY) is an essential event in Western brands’ calendars that continues to grow. Find out how retailers celebrated the Year of the Rat with the EDITED Retail Decision Platform. 

Want to see how our platform can pinpoint the optimal time to promote future Lunar New Year collections, along with the sweet spot for pricing? Reach out to one of our dedicated Retail Specialists.

Arrivals are already up 45% YoY

As Chinese New Year falls earlier this year, themed products arrived as early as September with Alexander Wang and Superdry as some of the first retailers off the mark. The earlier holiday saw items in the US and UK combined already outpace overall arrivals for 2019 and 2018, currently by 45% and 132%, respectively. 

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Accessories and tops are still the core categories retailers are backing for CNY-themed products with graphic tees, pendent charms and bags trending in the market. 

So far, 2020 saw the inclusion of more colors alongside the traditional red and gold scheme. Red remains a staple for CNY products, making up 42% of new colored arrivals (excluding black and white). However, growth was noted in pinks, navies, neutrals and greens as retailers looked for unique ways to interpret the theme in their merchandise. 

While the rat may not be the most appealing animal for merchandise, retailers such as Gucci and Kate Spade have put a twist on their motifs by tapping nostalgic characters such as Mickey and Minnie Mouse, as well as Tom and Jerry. 

This year has also seen CNY products grow across previously under-invested categories. Bottoms and outerwear gained additional backing from last year with retailers incorporating designs into joggers, bomber jackets and tracksuits.  

Major players

Unsurprisingly, luxury and premium brands continued to drive product growth and generate social media hype. Overall in the US and UK, there has been a 76% increase in CNY products arriving in the luxury market YoY.  Gucci, Bottega Veneta and Burberry released the highest number of products, all adding on from their ranges in previous years. 

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VisitBritain predicts in 2020, overseas visitors to the UK will spend a record £26.6 billion, a 6.6% increase in 2019. The EDITED Retail Decision Platform shows UK retailers’ CNY assortments have grown 82%, suggesting they are strategizing to capture this spend during the influx of Chinese tourists. 

While retailers such as Monki and Aldo are capitalizing on this holiday with prominent advertising, overall mass market product growth is flat YoY. Currently, only 8% of CNY items are priced under $50, flagging opportunities for entry-priced products in this market next year.

When is the best time to advertise?

While collections started trickling online in September, mentions of CNY didn’t start until the second week of December. As it’s a global event, campaigns that target both Western and Chinese consumers are essential, on top of offering free shipping to entice shoppers. After Christmas, messaging amplified with luxury brands unveiling their 2020 campaigns. Rats and mice were the defining themes with Gucci, adidas Originals and Aldo partnering with Disney on products. Paying homage to its ‘Stinky Rat’ collection from the 2000s (and including live rats in its imagery), Marc Jacobs joined forces with streetwear brand Stray Rats for a capsule range fronted by Frank Ocean. Rag and Bone saluted the viral sensation, Pizza Rat. Outside of the rodent-themed merch, traditional red and gold graphics were present, along with classic blossoms as seen at Dior and Roger Vivier. 

Much like beauty advent calendars at Christmas, CNY is a prime opportunity to promote exclusive items and sets as seen at Fenty Beauty, MAC and Charlotte Tilbury. Red and gold remained a consistent theme in eye-catching packaging, as well as for hero products like lipsticks, highlighter and eyeshadow palettes. 

Chinese New Year
Fenty Beauty Homepage US 15 Jan 2020

As brands use this time to push capsule ranges, discounting is not a significant theme in CNY advertising. Only a handful of retailers ran offers within their customer communications with the majority using this channel to promote curated shopping edits. Last year, prices for CNY products started to see reduction three days after the event with discounts between 0-10% off before peaking in June/July. 

Best practices for targeting the Chinese market 

Brands need to do their homework and understand cultural practices when promoting any holiday. Last week, we were joined on the unEDITED podcast by Ashley McDonnell, Account Executive at Google. Ashley discussed how important it is for brands to be respectful of cultural codes during CNY, as well as ensuring your message will reach the Chinese audience on the right social platforms.

To further understand the different ways luxury brands have tapped into the lucrative Chinese market, tune in to our conversation with Ashley here

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

*The dates analyzed for CNY products arriving new in: 

The Year of the Dog: 01 Sep ’17 – 16 Feb ’18

The Year of the Pig: 01 Sep ’18 – 05 Feb ’19

The Year of the Rat: 01 Sep ’19 – 21 Jan ’20