It’s not just China’s 1.4 billion population who will be celebrating the Year of the Tiger’s dawn in February 2022 – Lunar New Year is celebrated all around the world by Chinese emigrants, their descendants and local friends.
In sheer sales figures, it rivals Christmas and dwarves Thanksgiving, which is why smart retailers from both inside and outside of the nation don’t ignore it. But what can we expect for the upcoming 2022 Lunar New Year, especially with the pandemic to contend with? Let’s take a look at 2020 and 2021 (also lived under the pandemic) to leverage key learnings on where to focus your marketing efforts this year.
Despite the ongoing pandemic, Chinese consumers didn’t stop spending for the occasion in the last two years. Reports from The Chinese Ministry of Commerce show that the nation’s key retail and catering sector achieved sales of approximately 821 billion yuan throughout the 2021 Lunar New Year holiday (11-17 February, 2021), a 28.7% year-on-year (YoY) increase. Remarkably, that is a 5% uplift from the pre-pandemic Lunar New Year back in 2019. Moreover, last year’s online retail sales exceeded 120 billion yuan in the six days leading up to the Lunar New Year holiday.
Lunar New Year continues to present a huge commercial opportunity for retailers to reap its benefits in 2022. But compared to previous years, with Covid-19 cases creeping up again throughout the country, what will be the top consumer trends for the Year of the Tiger?
1. Celebrations to happen more locally
Historically, Lunar New Year triggers the world’s largest annual human migration, as hundreds of millions working away from their home towns travel back to celebrate with family and friends. The global pandemic has drastically changed this tradition and all but wiped out travel mobility following China’s national lockdown during the 2020 Lunar New Year.
However, this tradition was somewhat recovered in 2021 with migration increasing, yet still not reaching the same migration numbers from 2019. Both of the top map providers in China, Baidu and Gaode, reported that their users’ average mileage during Lunar New Year 2021 had dropped by more than 70% compared to pre-pandemic levels, indicating that people’s travel tended to be more local rather than long-distance.
Although Covid-19 transmission was well under control in China throughout the last year, recently discovered new variants such as Omicron are forcing local governments to advise against cross-province travel. We expect the travel mobility during this Lunar New Year to continue to be lower than pre-pandemic levels, meaning more shopping is likely to happen locally or online.
2. The new generation of Lunar New Year purchases
Millennials and Gen-Z are gaining purchasing power
Alibaba’s Spring Festival Consumption Report 2021 shows that Millennials and Gen-Z are overtaking their parents’ generation when it comes to making purchases for Lunar New Year festivals. Additionally, consumption trends during Lunar New Year are increasingly shifting towards tech items. Among the orders purchased during this period, the growth rate of domestic tech products, such as sweeping and window cleaning robots exceeded 300% YoY.
Healthy and more diverse gifting
Lunar New Year is one of the biggest gifting seasons in China. Traditionally, it is most popular to gift your loved ones money in red envelopes and premium food gift sets during this holiday. However, in 2021 Alibaba’s ecommerce platforms saw a significant increase in gift purchases from Chinese medicine healthcare brands (up an average of 100% YoY across three major brands) and massage guns (seven times more than in 2020).
Remote gifting for families and relatives
We are two years into the pandemic, with more inter-city travel restrictions coming and going. Combined with growing concerns over physical health, those who cannot physically celebrate with their families in-person have increasingly leaned on online shopping. In the last couple of years, health products have been an extremely popular gift option.
Alibaba has seen an increasing number of younger users, particularly millennials, buying products and services that are meant for older generations. On average, every millennial has invested in at least one product or service that is typically purchased by older generations. With young people likely to remain where they are for this year’s Lunar New Year celebration, we can expect more remote online gift purchases for their families back home.
3. Celebrate the New Year with furry friends
It’s not uncommon for pet owners to surprise their furry friends with special gifts for Thanksgiving and Christmas, and pet owners on the other side of the world do just the same for Lunar New Year. In 2020, the pet economy in China reached 300 billion yuan (approximately 47 billion USD), and is predicted to exceed 445.6 billion yuan by 2023, according to imedia Research. Lunar New Year is also becoming one of the biggest opportunities for pet owners to demonstrate their love for their animals. During 2021’s Lunar New Year festivities, Tmall, one of China’s top ecommerce platforms, saw orders related to pet New Year meals, pet clothes, and animal harnesses and leads, grow by more than 100% YoY.
A tiger like no other
The last time China celebrated a Year of the Tiger was in 2010, when the country was in a very different space economically – and, of course, there was no global pandemic. However, 2021 showed us that even lockdowns and restricted travel couldn’t blunt the nation’s desire to celebrate in the best way possible, even if that meant gifting from afar. Also with the pandemic has come a new-found dedication to fitness and health, which could resonate long after Covid-19 is a distant memory. 2022 is set to prove that regardless of what the world throws at it, China remains a huge investment opportunity during this highly anticipated holiday season.
If you’re interested in learning more about key marketing opportunities for the 2022 Lunar New Year, please don’t hesitate to get in touch with our APAC team. Additionally, we’ve created a 2022 Chinese marketing calendar, which highlights major shopping dates for Chinese consumers and key insights advertisers can leverage to bolster their digital strategies. Download the calendar here.