Chinese New Year will kick-off on Friday, starting a fortnight of festivities, travel and gift giving, as Chinese communities on the mainland and around the globe welcome in the Year of the Dog.
However, it is not only red packets that are handed over during the celebrations.
With consumer tastes evolving rapidly, and disposable incomes on the rise, giving quality and appropriately packaged gifts is becoming increasingly important.
While it’s essential to carefully customise your product, this gift giving tradition presents immense opportunities for boutique Australian products looking to grow their brand and expand into China. China’s retail sector, worth nearly 37 billion yuan ($7.5 billion) in 2017, is growing healthily, and the market for luxury goods alone was up by 20% last year, according to the latest statistics.
Get business news first
Sign up to SmartCompany’s daily newsletter
These opportunities are particularly ripe for quality Australian foods, wine, lifestyle and agricultural products, which are already highly sought-after.
So, here’s how to ensure your brand stands out as a gift of choice during China’s biggest and busiest festival.
Understanding China’s gifting culture
The Chinese have a saying: “courtesy demands reciprocity”. Gift giving has deep historic roots, steeped in Confucian values and complex social etiquette.
Gifts play a key role in maintaining relationships and social harmony, upholding ‘face’ and demonstrating ‘guanxi’ (personal relationships). Gift giving allows the giver to demonstrate respect for their elders and superiors, as well as to show their commitment to maintaining close relationships with family and friends.
Gift giving during the Lunar New Year is central to the culture of the festival. Typically, people offer their elders gifts to show prosperity and provide health and wellbeing for the year ahead, while offering those younger than oneself red envelopes (containing money).
Businesses looking to market their brand to new year shoppers need to understand how and when gifts are given, and which gifts are culturally appropriate.
It is customary to start with the most senior member of the family, and to present gifts in private. Except for the number four, even numbers (of an item or set) are appropriate, and you should also pay close attention to colour.
Packaging and presentation are essential
Suitable packaging can make or break an international consumer good in the Chinese market.
Unless packaged, presented and promoted in an attractive, culturally appropriate, and unique way, Chinese shoppers may opt for home-grown brands instead.
The use of red and gold, symbolising good luck and fortune are heavily emphasised. Large decorative boxes with multi-packs of product are given to demonstrate generosity, abundance and status. This can range from an eight-pack box of imported UHT milk (suitably packaged in red), to a thick display box with elaborately presented ginseng and wellness products.
Getting the subtle balance between cultural appropriateness and overt commercialism is essential.
China’s savvy consumers have been known to mobilise on social media, to share the ‘most ugly’ designs of ‘foreign brands with Chinese features’. Popular contenders have ranged from Chinese zodiac embossed underpants to cosmetics containing a mismatch of symbols from different festivals.
On the contrary, brands that take an authentic, high-quality and culturally nuanced approach have experienced great success. Take Penfolds Wines. The company’s tastefully presented Chinese New Year gift packages sold 8000 cases within 20 days prior to the start of the Year of Monkey in 2016.
Nestle’s world famous Kit Kat range has also launched an exclusive limited edition Lunar New Year gift set for several years running, as a convenient option for Australian Chinese to send to family overseas or offer as gift. Whilst the modern twist on traditional flavours was interesting, the gift boxes for the Year of Rooster in 2017 were attractively packed, and the product was carefully priced (at $68 a box) to use auspicious numbers.
And chocolatier Godiva has cleverly customised their chocolates for the New Year to resemble money, with flavours inspired by Chinese teas.
Don’t overdo it
These examples demonstrate an important insight for businesses seeking to enter or expand in the Chinese market: When it comes to customising your offering, don’t overdo it.
Typically, the (discrete) inclusion of New Year’s symbols (such as the animal zodiac) and auspicious colours (red and gold) on packaging for food or beverage products is more acceptable than featuring these elements on other luxury goods.
It’s important to find a tasteful nuance. Just as you wouldn’t gift everyone on your Christmas list a reindeer-themed present, when marketing your product for Chinese shoppers it is crucial not to overdo the Chinese New Year theme.
Chinese consumers are increasingly attuned to product quality, authenticity and originality.
Focus on customised products that play to Australia’s reputation for clean, green and organic — think tastefully presented hampers of health products, quality ‘Australian made’ beauty products, teas, boutique foods and confectionary.
And remember, it takes time to grow your business in China. There are multiple elements to consider, ranging from market entry, to understanding the operating environment, sales and marketing and building relations.
Before we know it, the Chinese New Year 2019, and the Year of the Pig, will also be upon us.