Chinese New Year and Marketing Opportunity

The Chinese New Year Travel Rush, known as ‘Spring Movement’ (春运 Chunyun), usually begins 15 days ahead of Lunar New Year’s Day and lasts for about 40 days (usually from mid-January to late February).

This year an estimated 450-500 million Chinese citizens are expected to travel to their home towns to spend China’s biggest and longest holiday with their families.

This huge holiday presents a great opportunity for savy marketers tapping into the largest consumer market in the world. The mass uptake of transport orientated advertising, e-hongbaos, Chinese tourists making trips overseas and novelty items that cash in on ‘the year of the Rooster’ are not to be under-estimated in a country prioritizing this time of year and the unique Chinese cultural practices surrounding it. For international brands it is important to stay ontop of these trends.

Advertising on public transport

CNY sees the largest mass migration of human beings on the planet, it is the longest and highest annual period of transport usage anywhere in the world. In 2016, it was estimated that Chinese travelers made around 2.9 billion trips in total during the 40-day period.

This widespread use of public transport, particularly the bullet train network, represents a huge opportunity for advertisers. The modern CRP train network now boast digital screens, placed in the back of seats. Digital ads are screened between content played with interactive QR code based ads encouraging users to scan and interact. Whilst on long journeys across China (which can be up to 15 hours), there is a relatively captive market with a lot of time on their hands.

Metro systems in the larger cities see increased usage as they effectively act as the major transport hubs. The metro in both Beijing and Shanghai are now implementing LED ad boards which are built into the tunnels and spaced out correctly to create moving, digital displays. The footfall and exposure will be much higher at this time of year.

Vehicle usage increases by four times on the roads so large physical billboards are erected at busy intersections, although this is costly it certainly results in high levels of traffic, if you excuse the pun..

E-Hongbaos

‘Hongbao’ is the infamous ‘red envelope’ that is traditionally presented at this time. It is an envelope filled with cash and reflects good will and prosperous fortune for the year ahead.

In the digital age e-versions are now hugely popular with Alipay, the largest third party payment system in China encouraging users to send their red envelopes via their APP. Users then receive the money into their account. To incentivize users last year Alipay gave away millions of dollars in free prizes for users who used their e-hongbao service.

WeChat are also hot on their heels with their e-wallet service. Users send hongbaos via personal chat or they can be posted in a group with a random or equal allocation of the total figure shared to everyone who opens it. It has not surprisingly been a way of motivating users to engage with brands on the social network by sharing their posts and attracting followers.

This is such a popular phenomenon that Alipay are now launching a ‘Pokemon Go’ style augmented reality game where users interact with the physical world and locations around them (based on GPS) to locate hongbaos. This presents huge opportunites for O2O, that is online to offline based marketing and vice versa.

E-commerce, users with spare time shop online.

Alibaba, the largest e-commerce player in China have developed the largest e-commerce infrastructure in the world. This includes reaching to smaller 2nd and 3rd tier cities. In the run up to CNY shoppers will order to deliver to their homes in more rural areas and the smaller cites. Alibaba will typically see an increase in orders before the festival begins, with the improved road network, delivery fleet and internet penetration rate China has become more connected than ever before. Digital ecommerce facilitates shopping for consumers across the country, not just those in the large, 1st tier cosmopolitan cities. This also benefits cross-border ecommerce which has become the key infrastructure for sales for international brands. With large families giving gifts in the form of hongbaos e-retail also typically spikes just after the CNY period.

Chinese Tourists

Then of course with this being the longest holiday there is the opportunity to travel. Ctrip, the largest travel provider in mainland, reported there will be 6 million outbound trips this year. Catering for Chinese visitors at this time is important, many destinations now offer special New Year dinners and events in hotels and destinations around the globe.

The most popular destinations for tourists are South Korea, Thailand, Japan, US, Singapore, Australia and Indonesia. The focus still tends to be on Asian countries that are closer and more convenient in terms of location. Having said this, as disposable incomes keep rising you expect to see the Chinese middle class choosing luxurious destinations further away in the western hemisphere.

 

‘Year of the Rooster’ products

This is the year of the Rooster, many novelty product variations around this sell very well. Limited editions versions or packaging is a good move. Features and games based around this theme can also be launched to drive traffic online and up-promote Rooster related content. The symbolism of each animal is important with the Chinese being associated with an animal from birth based on which year they were born. Special offers or rewards for those born in this animal year remain popular with brands.

 

To conclude it is important to capitalize on such seasonal trends as CNY. The Chinese greatly appreciate such tailored marketing whilst the mass movement, travel trends, hongbao culture and large gatherings of families in their home towns can be tapped into by savy marketers operating in China.

Benji is a digital specialist based in Shanghai, for more information see his website here.

 

AMZN Crushing Mobile

As BI reports, Amazon is dominating the mobile commerce space. Oppenheimer highlighted by just how much saying …“At the end of 2014, Amazon had roughly the same number of mobile unique visitors as Walmart and eBay, in the US. As of December 2016, Amazon has more unique visitors than the apps of those two companies’ combined,”.

And outside of Walmart and Ebay, the rest of the entire retail industry is way behind to the point you could be forgiven for writing them off entirely in the future of mobile commerce:

amzn-mob

So we have an Amazon dominated mobile commerce landscape in the near future. But long-term, perhaps as has always happened, the Internet will throw something new at us.

Chinese brick and mortar is crumbling: the future is all digital!

Benji is a digital marketing specialist based in Shanghai, he writes extensively on digital strategy in China and is passionate about providing solutions for western businesses looking to expand into the aptly named ‘mysterious orient’. For more information see his blog and website here.

Image result for crumbling wakk

Traditional retail shopping in China is in decline alongside the continued growth of e-retail, online activity and digital spending generally. Retail revenue is falling by 15% year on year whilst the digital market grows by 25% per year. Unless businesses realize that the future is all digital they will incur the costs of not developing with the times.

Many malls with mainstream brands are struggling to generate enough revenue and attract a high footfall. There are also an increasing number of ‘ghost’ shopping areas, with many of the entrepreneurial peasant class opening shops with all their family savings only to find themselves closing within a year, the human cost is high. Small businesses are always hit hardest.

It is vital for western businesses to invest in digital first and foremost, ‘clicks not bricks’ should be your new mantra. There will always be some demand for physical shopping but those stores attracting the highest footfall are also implementing successful marketing campaigns on the Chinese internet, digital will always be a key component.

So why is traditional shopping on the decline and online now the solution?

1)      Convenience

The largest urban areas are increasingly polluted, congested and affected by overstretched public services, it is increasingly inconvenient to travel to shop, especially because of the size of the country. E-commerce offers an infinitely faster process with quality platforms such as ‘Tmall’ associated with genuine brands in a market known for counterfeits. Even if users are looking for copycat products platforms such as ‘Taobao’ are renowned for selling everything under the sun too. Shopping online is simply more convenient with quality not being sacrificed.

2)      Pace of life

Fast paced, frenetic modern China is still on an upward trajectory, this is a country (especially on the east coast) growing in a spectacular way. The new wave of Chinese careerists work hard and long hours, therefore the ease of e-commerce services combined with the speed of purchasing is a key factor. Online shopping is largely facilitated by the breakneck speed of modern China, it is a response to changing consumer habits.

3)      Alibaba have developed world leading e-commerce platforms

There is the quality of Chinese e-commerce to also consider. Retail outlets are always limited by where they can locate, the space available and high rental costs. Alibaba however grew online without such burdens and developed a world leading network and series of platforms which facilitated this move to digital e-commerce. Tmall, their flagship site is hosting official branded ‘stores’, it is popular with international brands as their target market regularly shop here. ‘Alipay’ the companies payment system also facilities cross border commerce with both RMB and international payments accepted.

4)      The nationwide e-commerce infrastructure has grown

With a select number of tier 1 cities boasting the best in shopping services other tier 2 and 3 urbanites were previously left out. Now however with the growth of Alibaba’s national delivery network smaller cities are benefiting from the same range of products on offer. Physical store expansion has inevitably not grown at this same rate due to the far higher costs, Chinese stores therefore need to embrace e-commerce and utilize the range of platforms on offer to grow in the digital sphere.

5)      China’s propensity for digital

The digital revolution in China has been unprecedented, this is especially so with the uptake of mass market smartphone technology. With such a strong mobile culture it is unsurprising that users also shop in this way. With e-commerce platforms optimized for mobile, shopping ‘on the go’ is a growing trend. The new wave of Chinese consumers are growing up in a culture where they expect this type of ‘instant gratification’ and e-shopping in such a strong consumer culture is inevitably affected.

6)      e-commerce in conjunction with WeChat’s social network has a promising future

It is still early days but businesses can now open micro stores on WeChat which can be linked to their official accounts. With WeChat pay already linked to users bank accounts this facilitates incredible ease of purchase. Marrying e-commerce and social media in this way is a revolutionary step that will further promote the rise of e-retail over traditional store shopping. When one door closes another one opens.

The good news is that for every Chinese merchant stuck in the offline paradigm, there is at least one getting there online game on. McKinsey has estimated 46m new online jobs will be created by 2025 against to 31m lost. It is timely that, with the Chinese states drive to move from a manufacturing economy towards a creative and innovative tertiary economy, that such digital growth has been witnessed. China is hurtling towards the future and commercial activities need to embrace new digital solutions to grow in this changing environment.