Happy New Deal
International brands are increasingly gearing their product launches and promotions around the Chinese New Year. Is there an easy formula for positioning and adapting a brand correctly for Chinese consumers?
Chinese New Year – celebrated last week to usher in the Year of the Monkey – is the most important traditional festival in the Chinese culture. It is also a huge annual event in consumer spending. This year’s seven-day holiday recorded total retail and restaurant sales of RMB 754 billion (approx. USD 115 billion) in Mainland China, up 11.2% from the same vacation period in 2015 (source: Ministry of Commerce). Gift giving and personal grooming (tradition has it that you are supposed to wear head-to-toe new clothes to bring in the New Year) are the two major areas of where the money goes during the holiday season.
Despite a smoothing out of wine sales throughout the year as everyday consumption becomes more important, Chinese New Year remains the peak season for wine sales in China. Wine is increasingly consumed as part of the festive meal and a gift of wine (usually red) remains a very appropriate toast to the recipient’s health and prosperity.
Based on some of the feedback I’ve been seeing from friends, and also social media, it seems that the social “rules” about what to buy for Chinese New Year are changing for wine (and possibly other products too). Here are some observations:
Looking tasteful goes a longer way than just looking expensive
Instead of looking solely for prestige or social superiority, I am increasingly seeing the Chinese middle classes – the rapidly expanding driving force of the country’s consumption market – looking for tasteful, quality wine gifts (product plus packaging) that communicate their personal integrity, and these wines don’t necessarily need to have a prestigious label.
Ahead of Chinese New Year, Penfolds released a special “Max’s Promise” gift box to celebrate the Year of the Monkey. The gift box used Penfolds’ classic red colour as background, with Chinese characters 猴 (meaning “monkey”) pieced together by golden fortune-bringing numbers such as 2, 6 and 8. The gift box was praised for its “original design bursting with festive spirit”, and it’s reported that the 8,000 cases shipped to China sold out within 20 days before the holiday season kicked off (source: Wine Business Observation). Priced at RMB 500-600 (approx. USD 75-90), the Penfolds gift box wouldn’t be “qualified” as a luxury gift (which has taken a very hard hit with the government anti-corruption campaign), but as an affordable one to most middle class gift-givers.
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