Chinese New Year offers fast track growth for brands and retailers

A pioneering study of Chinese domestic life has revealed unique insights into the next wave of growth in the Middle Kingdom.

WPP researchers spent time with extended families during the one time when Chinese people relax together for a long period – up to 15-days of New Year celebrations. Combining ethnographic research and cultural insight from brand consultancy Added Value and data analysis from BrandZ and CNRS-TGI China, the study unlocks year-round brand and retail opportunities for marketers engaged with the Chinese market.

The study, conducted in 2011, did not focus on consumers in Beijing, Shanghai and Guangzhou, but rather on Nanjing and Weifang. These are more commonly known as tier two and tier three cities – urban areas of around 8.5 million which are enjoying rapidly rising spending. Such cities are crucial for any brand wishing to win the hearts of Chinese consumers.

The new research offers a compelling portrait of family life, reflecting people’s efforts to reconcile tradition with their expectation for the future in a fast changing world. It is complemented by photojournalist Cecilie Østergren’s intimate images of families shopping, preparing food and celebrating.

The 4,000-year-old New Year holiday – which starts on Monday 23 January – remains a deeply embedded part of Chinese culture. Nonetheless very little research has been undertaken on the subject, as Chinese people are less than eager to allow researchers to enter this very intimate celebration and family reunion.

The BrandZ China study shows that brands which employ culturally relevant ways to enhance holiday celebrations will strengthen their bond with customers, offering dividends in the short and long-term. David Roth CEO, The Store WPP, EMEA and Asia said, “For anyone interested in unlocking opportunities in China and succeeding in the next wave of China’s growth, understanding the Chinese New Year is a master key. Evoking past traditions is vital but as China changes it’s important to be forward looking in how this is used and communicated and not nostalgic. Getting the right balance will be the determinator of success.”

Those retailers and manufacturers that strive to enhance the New Year experience and create a more pleasant shopping experience will succeed. Retailers, however, need to demonstrate that they are genuine.

While consumers are prepared to spend more in the New Year period as they are becoming more affluent, value remains an integral part of any shopping decision. Categories such as alcohol and traditional Chinese medicine were found to be more relevant than others during the New Year period.

Chinese New Year, the study concludes, offers enormous untapped potential for brands and retailers.

Markus Dunke Research Manager at Added Value China said: “What is becoming clearer as China’s growth continues is that those brands who succeed in the tier two and tier three cities will succeed in China.”

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