Tag Archives: doing business in China

Image source: PRN Asia

With the usual cocktail of eardrum-shattering firecrackers, mass migrations, food-centric family gatherings and endless song-and-dance TV programs, Chinese New Year celebrations – which started on the evening of February 8 – are only just starting to wind down.

The holiday serves as a demarcation point for both companies and individuals in China; debts must be paid before the New Year, but any work that requires long-term focus or consideration is often postponed for after the holiday. “We’ll take care of it after Chinese New Year,” is a common response to enquiries in the days and weeks beforehand.

Since so much of the country’s activities are framed by these festivities, having an understanding of this holiday and what it represents is essential for companies doing business in China.

Pre-Game the Holiday

Much in the way that new products are often launched before the Christmas shopping season in North America, the market is ripe for similar promotions in China before the Lunar New Year. This is the time of year when people tap into the money they have saved over the course of the year to buy gifts to take home to their families. Some of them have not returned home in years. As with most Chinese holidays, a huge emphasis is placed on food, both with the nianyefan meal on New Year’s Eve and as a form of gift for friends and family. Beyond food, expensive gifts are popular as a way of conveying respect to the recipient, while the gift-giver gains “face”, or status, in being able to provide such a fine gift. Children are the lucky recipients of yasuiqian, aka cold cash in red envelopes, a tradition that leaves adults feeling rather deflated by the end of the holidays, depending on how many kids they know.

The lunar new year – which falls in January or February – conveniently is always preceded by the Christmas rush in the West, so companies need only tweak their campaigns accordingly to approach the Chinese market at the peak of shopping season.

Timing in all of this is key – New Year’s Eve and day are the biggest days of celebration, but the holiday extends for 15 days, ending with Lantern Festival. Work may officially resume seven days after New Year’s Eve, but many take additional time off to travel to their hometowns, and business activities don’t really begin to normalize until the full holiday has passed.

TV Takes Over

As a result of the urban exodus, the means by which companies usually try to reach audiences – the internet, email, press releases aimed for media outlets – can all fall on deaf ears as urban office workers head back to their hometowns. But while many lose their high-speed internet connections, few are the moments in China when one is not in close proximity to a television, including on all forms of transportation.

Television, as has been discussed, is still a viable medium for capturing an audience through loud, splashy ads. It is the constant background of family gatherings – in fact, the tradition on New Year’s eve is for families to gather around the TV for over four consecutive hours of entertainment in the form of galas, with state broadcaster CCTV’s being the most famous of the bunch. To give a sense of scale, CCTV’s performances this year included Celine Dion singing a duet in Chinese with diva Song Zuying.

While CCTV’s gala, known as the “Chunwan”, runs ad-free, the airtime surrounding the event is a different story. With the potential to reach up to 700 million potential viewers, the 10 minutes before the Chunwan commences are what China’s famous angel investor Cai Wensheng went so far as to refer to as a “barometer of the economy” determining which industries are profitable. This year, while the nation’s populace may have been taking a break from their computer posts, Internet companies still did their best to stay on their minds with an onslaught of TV advertising.

Unexpected Factors

Even the best-prepared companies cannot always anticipate factors that will influence buyers’ decisions during the holiday. In Beijing at least, there were two big ways in which New Year was celebrated differently this year compared to last year for a uniquely Chinese reason: the government. In 2013, authorities asked people to light fewer fireworks to help deal with the capital’s burgeoning pollution problem, and people heeded the call. The Wall Street Journal, via Xinhua, reported that people purchased 45% fewer fireworks than last year.

Also notable was the news that purchases of expensive hard liquor, or baijiu, were down in the wake of pledges to cut back on the expensive government banquets that often feature copious drinking. Even with stores discounting the prices of the most expensive brands of baijiu, at over USD 200 per bottle, Moutai still remains outside the reach of many consumers.

Holiday Exports

China is an established factor in the global economy, but soft power exports in recent years have increasingly factored in the day-to-day lives of citizens of other countries. With a huge uptick in the number of Chinese studying abroad or working overseas, as well as rising numbers of Chinese who can afford to travel abroad recreationally, Western companies are seeing an opportunity in holidays like Chinese New Year. This year, Harrods in London sold snake-themed gold bullion, Louis Vuitton offered snake monograms, and Mercedes Benz even launched a snake-themed smart car.

While bringing Western holidays to China certainly has seen commercial success, more companies are seeing the value in embracing the holidays already important to the Chinese, a trend we can expect to see continue through the Year of the Snake and beyond.

Author Caroline Kilmer is a member of the PR Newswire Asia team.