Mark Tanner
Mark Tanner
10 February 2021 0 Comments

Nothing spoils a good trip home quite like a pandemic. In the lead-up to the Chinese New Year holiday, things were looking promising as recently as a month ago with China having had only a handful of contained outbreaks for the second half of 2020. Then an outbreak in northern China – tiny relative to most countries, but still taken very seriously in China – peaked in late January, putting a dampener on this special time of year.

With the cost of travel skyrocketing every Spring Festival, many Chinese had booked their holidays early. But the outbreaks gave the government no choice but to strongly discourage travel, allowing refunds on tickets already purchased. It even incentivised domestic migrants not to return home. For many, it was to be their only trip of the year, and often the one opportunity to see their kids who live with their grandparents. Yet train stations, bus stations and airports absolutely crammed with people are a wonderland for a highly contagious bug, so it was another Lunar New Year of staying put.

The ‘world’s biggest annual human migration‘ will be just a trickle on previous festivals this year, with just 1.15 billion trips forecasted, compared to 2.9 billion in the pre-Covid times of 2019. That has kept the price of air tickets as low as half their usual price for the period, with the average fare just ¥651.4 ($100).

This time of the year, screens are normally awash with emotional ads of people travelling back to hometowns. Not in 2021. More brands are focused on celebrating in a consumer’s ‘resident city’. Among the most effective campaigns are those connecting at a new emotional level, acknowledging feelings of homesickness, missing parents and extended families, while welcoming the Year of the Ox with a smaller circle of friends or immediate family. Here are some of the big foreign brands’ CNY ads that went viral – which were of a more traditional mould. Going forward, we can expect many brands that have logos or connections to cattle, to milk them over the next 12-months – from dairy brands to Lamborghini, Red Bull and even travel site Tuniu, restrictions aside.

In addition to ads, consumer behaviour has also been impacted by this year’s unique circumstances. Gifting and food are the two big purchases leading up to the festival, and habits for both have been affected. Much of the gifting will now be bought online and delivered remotely, missing that face-to-face touch that builds the magic during the Spring Festival.

Food, which is usually stocked up to serve visiting relatives, has obviously seen changing purchase behaviour. There have been videos circulating on social channels of massive crowds of consumers stocking up at Sam’s Club, Costco and other hypermarkets for CNY supplies – resembling the usual train station footage at this time of the year. But for many other consumers stuck in their city of residence, more and more are without the usual family rituals of preparing dumplings, spring rolls, rice cakes and other fare, leaving it to others. Sales of partly-prepared food surged 375.6% from 2020 during a massive online sale of holiday goods. Similarly, holiday meal offers on delivery platform Ele.me grew 164% from last year, with a 260% rise in the number of stores serving up festive meals for delivery to meet demand.

Food overall has been a sore point leading into this Chinese New Year. Propaganda about foreign food ‘infected with Covid’ has reduced demand from importers, in addition to stockpiles of food held up at the ports due to nucleic acid testing for Covid. Domestic producers have been unable to fill the gap, particularly with the freezing conditions in the north, meaning food prices have shot up. Certain vegetable prices in Beijing and other cities have almost doubled on last year, and pork is close to its 2019-peak.

Overall, although the CNY restrictions and food prices will impact spending and lower GDP during this traditionally explosive time for spending, Chinese consumers continue to feel more confident than most. The outbreaks which hampered new year travel have had a little over 2,000 local infections in total, with no new local cases on Sunday. Consumers have faith that their system quickly stamps out any massive outbreaks like it saw in Wuhan a year ago, which has been foundational to their relatively positive outlooks.

The team at China Skinny wishes you a Happy and Prosperous Year of the Ox, and looks forward to sharing more insights and assisting with your China strategy, branding, research, trends, new product development and other things in the year ahead. 春节快乐!

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