Chinese New Year is the single most important holiday of the year in Chinese culture: Families gather for a variety of festive holiday meals—and spend heavily on all manner of holiday foods and other celebratory products for a holiday that stretches for weeks.

We expect retail and food service sales to hit ¥1.1 trillion (around $156 billion) this year, from January 24 to 30—the statutory holiday designated by China’s State Council. Retailers, brands and online platforms are pulling out all the stops to create and promote Year of the Rat themed products and promotional campaigns. (Note the character for “mouse” and “rat” are the same in Chinese, so both mice and rats can be used as holiday icons.)

E-Commerce Platforms Offer Various Promotions Before the Chinese New Year

In addition to festive meals at home and at restaurants, Chinese consumers shop for a range of holiday merchandise, decorations, gifts, new clothes and even haircuts.

E-commerce platforms such as Alibaba’s Taobao and JD.com have rolled out an estimated ¥10 billion (around $1.4 billion) in price cuts to drive holiday sales, according to information supplied by Alibaba and JD.com, both of which are calling their respective promotional campaigns “New Year Goods Festival” (年货节).

Taobao’s New Year Goods Festival ran January 6 to 10 and offered a variety of promotions, such as ¥30 (around $4.3) off orders above ¥300 of apparel and bedding products, as well as 60% off Dr. Marten shoes.

[caption id="attachment_102329" align="aligncenter" width="650"] New Year Goods Festival promotion on Taobao
Source: Taobao[/caption]  

JD.com’s New Year Goods Festival lasted longer, from January 6 to 17. The promotions covered a wide range of categories, including apparel, footwear, grocery, computers and phones. Consumers were offered ¥99 (around $14) off orders above ¥199 (around $29) of Coca-Cola products, as well as ¥100 (around $14) off orders above ¥1,299 (around $187) for UGG products. JD.com also offered free delivery to Hong Kong and Macau, which is important as sellers in China usually need to pay more delivery fees to these regions due to Hong Kong and Macau being separate customs territories.

[caption id="attachment_102330" align="aligncenter" width="650"] New Year Goods Festival on JD.com showing Hong Kong and Macau delivery options
Source: JD.com[/caption]  

Both Taobao and JD.com leveraged livestreaming to promote their New Year Goods Festivals, with Taobao livestreamers broadcasting all day, while JD.com promoters were online in the evenings when most people were off work.

[caption id="attachment_102331" align="aligncenter" width="500"] Livestreaming promotions for the New Year Goods Festival on JD.com (left) and Taobao (right)
Source: Taobao/JD.com[/caption]  

Retail Sales During Chinese New Year Golden Week Could Reach ¥1.1 Trillion

Retail and food-service sales during the Chinese New Year period grew steadily from 2011 to 2019, climbing 8.5% in 2018 to hit some ¥1 trillion (about $145 billion), according to Ministry of Commerce statistics.

We expect this year’s retail and food-service sales to climb to around ¥1.085 trillion ($156 billion), an increase of around 8% over 2019. Informing our estimates are recent retail-sales growth rates and the prediction from the State Information Center, a governmental policy making think tank, that retail sales will rise 8% year over year in 2020.

In 2019, we estimate total annual consumer goods retail sales were around ¥41.2 trillion, implying the 2019 New Year period accounted for around 2.4% of the country’s total sales for the year.

[caption id="attachment_102332" align="aligncenter" width="700"] Source: Ministry of Commerce of the People's Republic of China/Coresight Research[/caption]  

Marketing Opportunities for Brands

Chinese New Year offers a great opportunity for brands to market products, especially by leveraging holiday-themed products and promotions. This year, we saw brands such as Mango and Nike incorporate mice and rats into sweater and shoe designs for the holiday.

[caption id="attachment_102333" align="aligncenter" width="650"] Mango’s Mickey Mouse sweater shirt (left) and Nike’s rat-shape shoes (right)
Source: Mango and Nike[/caption]  

Korean beauty brand Etude House also launched a Tom & Jerry collection to celebrate the Year of the Rat, including lipstick, eye shadow and face cream.

[caption id="attachment_102334" align="aligncenter" width="400"] Etude House Tom & Jerry campaign
Source: Etude House[/caption]  

Premium beauty brand SKII also released a special Mickey Mouse edition of its Facial Treatment Essence in the honor of Year of Rat. The festive edition came with a red bottle printed with Mickey mouse.

[caption id="attachment_102335" align="aligncenter" width="450"] SKII’s Micky Mouse edition
Source: SKII[/caption]  

Pepsi and Adidas used campaign films featuring family reunions and friends partying together for the holidays, both tapping into celebrities such as singer Eason Chan and actress Zhou Dongyu. The Adidas video got 29,523 likes and was shared 27,466 times as of January 14.

[caption id="attachment_102336" align="aligncenter" width="650"] Pepsi (left) and Adidas’(right) New Year campaign
Source: Weibo[/caption]  

Key Insights

Chinese New Year is one of the most important holidays of the year in China. Retail sales for the week-long holiday have grown steadily from 2011 to 2019, and we estimate total spend will climb around 8% to $156 billion in 2020. Online retailers and brands rolled out a variety of promotions and new products to tap into the massive annual sales opportunity.