Stay in the loop
Sign up for event alerts, as well as insights from our experts.
Chinese New Year, also known as the Spring Festival or Lunar New Year, kicks off today with celebrations that can last for weeks. It’s celebrated by 2 billion people in China, Korea, Singapore, Vietnam, other Asian countries, and communities worldwide.
Given the sheer amount of people who celebrate, it’s no surprise that sales figures beat those of the Christmas holiday season. For comparison, in the five-day period from Thanksgiving to Cyber Monday last year, online sales in the US were projected to total about $39 billion USD. In 2021, Chinese retail sales during the Lunar New Year totaled over $129 billion USD.
The smartest retailers don’t overlook Lunar New Year.
But, given the ongoing pandemic, what do Year of the Tiger celebrations have in store for businesses? What will consumers be spending on? And how can companies make the most of the surge in e-commerce activity? Let’s take a look.
Consumer behaviour during Lunar New Year
One of the biggest Lunar New Year traditions is the giving of hongbao, a red envelope containing money, wishing prosperity and good fortune to the recipient. Digital e-hongbao became popular in 2014 when the super app WeChat allowed users to send virtual red envelopes of money to their contacts. Now, seven years later, about 80% of survey respondents say they prefer to send digital e-hongbao to physical envelopes.
In the past, Lunar New Year has prompted huge masses of people working away from their hometowns to travel back to celebrate. The world’s largest annual migration means that as many as three billion trips would be made each year across China.
As you know, the pandemic and national lockdowns changed things dramatically in 2020 and 2021. So what can we expect for 2022? COVID will continue to hinder travel, but the Chinese Ministry of Transportation estimates that 1.18 billion trips will be made this year. And while that’s less than half from years previous, that still translates to revenue for travel and transportation companies.
Once people make it home to celebrate, there’s no shortage of festivities centered around gathering with family and friends to eat. According to a survey, around 77% of Chinese respondents said they planned on buying food for the 2021 holiday. About half of the respondents decided to buy alcohol or wine.
Gift-giving is also a popular way to celebrate, with e-commerce supporting those who are still social distancing. According to Alibaba’s Spring Festival Consumption Report 2021, tech products, such as sweeping and window cleaning robots exceeded 300% YoY.
Customising the checkout is the key to cashing in
Research conducted in 2018 in China, India and Indonesia asked consumers to identify the main obstacles which prevented them from using online services to their fullest extent. The number one obstacle, singled out by 76% of correspondents, was language.
But localisation can’t stop there. According to PPRO’s own research, most consumers will abandon a transaction if they reach the checkout and cannot find a payment method they know and trust.
To ensure maximum consumer acceptance and the best possible conversion rates, a site must offer a range of familiar and trusted local payment methods. For China and surrounding countries, this couldn’t be more true.
So which payment methods should merchants accept to reach Chinese consumers? The best practice is to accept all three of the most popular Chinese payment methods to reach all Chinese consumers effectively: UnionPay, Alipay, and WeChat Pay.
To learn more about how Chinese consumers prefer to pay, download our latest Payments and E-commerce report on Asia Pacific.
Browse the latest in the world of payments