In 2019, retailers in China took in a staggering 1 trillion yuan (nearly $149 billion) during the Chinese New Year . The advertising press describes what happens during the holiday as a “spending frenzy” . According to one recent report, this year middle-class Chinese in tier-one cities such as Beijing or Shanghai are budgeting 10,000 yuan (roughly $1480) for spending on gifts and entertainment .
And there’s every sign that — like so much else in China — big chunks of the festivities for the lunar new year are going digital. One of the biggest Chinese New Year traditions is the giving of Hongbao, a red envelope containing auspicious money, wishing prosperity and good fortune to the recipient.
In 2019, 823 million Chinese used digital payment services to send Hongbao to friends and relatives, up from 688 million the year before . It’s no surprise at all to see the Chinese, who love innovation, taking to the idea of digital red envelopes. For merchants and payment providers, the trick is to make sure their service and their stores are ready to meet Chinese users’ needs during this busy period.
Competing payment services have even been offering discounts and promotions to users who use their digital Hongbaos . Last year, Alipay alone reported that 450 million Chinese and Southeast Asian consumers had used its “five blessings” Hongbao promotion, up 40% on the year before .
But digital Hongbao isn’t the only sign of Chinese New Year going digital. Chinese New Year is also the biggest mass migration event on the planet. Locals and expatriates travel across China — and Asia — to get back to their families in time for the celebration, making an estimated 3 billion trips during the festive period . In 2019, there was a 19% increase in the number of New Year online flight bookings , giving a massive boost for online travel booking companies.
Once they’re finally together for the holidays, the Chinese want to sit down to a festive reunion feast. And even this is increasingly a digital affair. In 2018, the Chinese e-commerce platform Alibaba reported a 218% increase in the number of online orders for “reunion dinners”. The Lunar New Year is also a bumper time for Chinese retail e-commerce. During the 2018 festive period, for instance, Chinese marketplace JD.com saw its online sales increase by 43% .
These gains are not only seen on Chinese e-commerce merchants and payment platforms. In 2018, UK e-commerce sites similarly saw orders from Chinese customers increase by 38% year-on-year during this festive period .
“Chinese New Year is one of the globe’s biggest online shopping event,” says Kelvin Phua. “The impact is felt across categories and, increasingly, outside China too. This represents a huge opportunity for online merchants across the world. To take advantage of this opportunity, they need to make sure that the shopping experience is as enjoyable and reassuring as possible for the Chinese consumers. That means, among other things, giving them payment methods, they know and trust.”