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GUEST COMMENT Chinese New Year and how Western retailers can benefit

The Year of the Rat is upon us
The Year of the Rat is upon us
Hannes Ben, CEO & Founder of Locaria
Hannes Ben, CEO & Founder of Locaria

Chinese New Year is a very big deal. Tracing back over 3,500 years, accounting for China alone, potentially one-sixth of the world’s population celebrates the Lunar New Year. Vibrant celebrations are also observed wherever a significant Chinese community is found, from London, New York, Cape Town to even Kingston, Jamaica.

 

In 2020, Chinese New Year officially begins on Saturday, January 25 and ends on February 4. The New Year will be marked as the Year of the Rat, and Chinese communities across the globe will be adhering to centuries-old traditions, as well as engaging in more modern tastes, such as shopping and international travel.

 

Last year, the Chinese government said that retail and catering enterprises generated a revenue of over 1 trillion yuan ($148.3 billion) during the holiday. With how widespread the celebration is, retailers have an enormous and lucrative opportunity to take advantage of, but so far, many Western retailers have been slow to develop a cohesive marketing strategy for Chinese New Year.

 

Here are a few points about why Chinese New Year matters for Western retailers and how brands can better engage with Chinese consumers.

 

Why Chinese New Year should be important to Western Retailers

Firstly, there is a significant overseas Chinese population that reside in or visit the West. Brands should be keen to invest in a marketing strategy to target consumers during the Chinese New Year.

 

There are approximately 400,000 British Chinese in the UK. British Chinese have the second-highest household income across demographic groups in Britain. China is also the leading country of origin for international students in the UK, with over 106,000 Chinese students enrolled at UK universities. Moreover, a significant proportion of British citizens of other East Asian heritages also fall under part of the Chinese cultural diaspora (Vietnamese and Cambodians of Chinese heritage, for instance).

 

All of this makes for a compelling case for retailers to consider marketing to Chinese communities during the holiday, as many will be looking to purchase presents, food and drink for the New Year, as well as to travel domestically and internationally.

 

Why Chinese tourism matters for the British high street

Each year, UK tourism receives a significant boost from Chinese travellers opting to travel abroad for the Chinese New Year. By the end of 2018, Chinese tourists had made over 391,000 trips to the UK with an average length of stay being around 15 nights. In 2019, tourism from China to the UK rose 24 per cent, and 80 per cent of Chinese tourists prefer shopping instead of partaking in cultural activities.

 

Spending by Chinese tourists is also steadily increasing. By comparison, in the year 2000 Chinese tourists spent $10 billion overseas and by 2018, that number rose to $277.3 billion. Behind the growth in tourism from China is the rise of the nation’s middle class, as well as the Chinese appetite for richer experiences such as travel to exotic locations and luxury goods. Important to note, is that Chinese tourists are naturally generally less Westernised than Chinese international students or British Chinese, who would use Western platforms like Google or Facebook, instead of Baidu or Weibo. Targetting Chinese tourists will have to be done on Chinese social media or web platforms.

 

This increase in Chinese spending could be the antidote to our current retail woes. The UK retail market, particularly the high street has been struggling for the past few years and targeting non-native cultural holidays might be a partial remedy. Targeting more Chinese tourists could be a crucial step towards reviving the high street, considering that in 2016 Chinese tourists were responsible for 25 per cent of all tax-free shopping in London’s West End.

How can brands engage with Chinese communities during Chinese New Year?

Two concerns should be at the forefront of any brand looking to break into mainland China or engage with Chinese communities. The first should be how the business can develop content that resonates with the values of Chinese consumers. The second should be how their marketing strategy can crack Chinese social media networks like WeChat and Weibo.

 

Making content that engages with Chinese consumers

The first consideration is linguistic and cultural. Direct translations do not always work when translating from English into Mandarin or Cantonese — as Burberry learned the hard way in its 2015 blunder. Brands must pay close attention to the visual appearances of copy and how it looks when translated into Chinese script.

 

Businesses need to understand the nuances of the Chinese language which goes beyond merely translating into Mandarin or Cantonese and even encompasses whether consumers in that specific Chinese market respond better to Traditional Chinese script or Simplified Chinese script.

 

Cultural nuances cannot be forgotten about either. Younger Chinese consumers will not respond well to tacky content. For example, Burberry’s 2019 Chinese New Year ad campaign, which aimed to balance the brand’s haute couture aesthetic with traditional Chinese values, was widely reviled on Chinese social media, with users labelling it as ‘creepy’. While brands must take risks in their marketing campaign, brands need to consult local specialists to examine the tone of their campaigns and how it might appear to Chinese consumers, especially with regards to important cultural institutions.

 

Why brands need to use Chinese Social Media to engage with consumers

Digital channels in China are completely different from the West. Google, Facebook, Twitter and YouTube are blocked, which means regional social networks flourish in place. For instance, for web search, Chinese consumers use Baidu, 360 or Sogou. Users can also use Shenma, which is a mobile-only search platform. For social media, Douyin (the Chinese version of Tik Tok) and Little Red Book (Xiaohong Shu) are immensely popular.

 

According to research from Statista, WeChat’s active accounts have been increasing by 20% each quarter, with WeChat achieving 1.15 billion monthly active users by the end of 2019. Weibo by the third quarter in 2019 reached 497 million monthly active users.

 

Any brand looking to seriously engage with Chinese consumers needs to factor in the impact of a well-coordinated social media campaign on WeChat and Weibo. Although, also important to bear in mind is compliance with tighter Chinese rules and regulations as part of the social media marketing strategy in China. Unfortunately, businesses will not be able to run their advertising activity simultaneously across the overseas Chinese diaspora and for consumers in mainland China. Not all advertising activity is permitted or even effective in mainland China due to regulatory requirements, which means businesses need to create separate organic profiles that either focus on UK based Chinese users or users based in mainland China when addressing individual promotions. Also important to note is that for paid social media, Chinese rules only allow for the targetting of specific countries and regions, but not cities, while Baidu does not allow for country targetting outside of China and instead lumps them in an ‘all overseas’ category.

 

Chinese New Year is big business and looks set to continue to grow each year. Western brands can benefit from Chinese New Year but need to approach the holiday by thinking about the cultural nuances and platforms the consumer would best engage with. This customer-driven approach is key to delivering a successful localised marketing campaign and establishing brand loyalty in the Chinese market.

 

Author

Hannes Ben, CEO & Founder of Locaria

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