Kayla Marci

February 11, 2021

How retailers strategized for Chinese New Year 2021

Travel dropped significantly ahead of the Chinese New Year holiday. How were retailers' online products and promotions impacted?

Following last year’s disruption by the pandemic, travel ahead of the Lunar New Year holiday dropped 60% from 2019 and more than 20% YoY. This made it even more crucial for retailers to nail their online offerings and promotions.

Want to see how our state of the art Market Intelligence Platform can pinpoint the optimal time to promote future Lunar New Year collections, along with the sweet spot for pricing? 

Reach out to one of our dedicated Retail Specialists.

In the meantime, read on to discover the key findings from our analysis of the Year of the Ox in fashion. 

Growth was cautious

Like Singles Day, Chinese New Year (CNY) is an essential event in Western brands’ calendars that continues to grow. In previous years, retailers have ramped up investment in capsule collections to court the wealthy Chinese consumer. However, with last CNY being one of the first major events impacted by coronavirus, retailers market-wide were more cautious dropping products for 2021.

The number of new CNY arrivals saw a slight incline of 7% vs. last year – a significant difference between 2020 and 2019, where products increased 45%. COVID also caused last year’s remaining collections to be discounted deeper, eating into retailers’ margins. By the end of February, leftover Year of the Rat merchandise was slapped with an average discount of 38% – higher than for the same period in 2019, where remaining Year of the Pig products were marked down at an average of 33%.

Luxury dominated

Unsurprisingly, luxury and premium brands continued to invest heavily in CNY products and advertising. 39% of the items arriving this year were from high-end brands with Gucci, Kenzo and Fendi offering the largest assortments. With the Asian consumer so influential in luxury, Gucci tapped into nostalgia featuring the character Doraemon. The luggage in this range landed the highest price points in both the US and the UK. In comparison, arrivals were scattered across the mass market.

& Other Stories collection was only available on its Chinese and Korean sites, while Monki opted out of a launch altogether. Just as bags commanded the highest price point, the lowest prices were also in this category due to Superdry and Herschel Supply Co. The event is luxury’s time to shine with only 10% of CNY items this year priced below $50. Yet, with the economy still reeling from the pandemic, this presents itself as an opportunity for more purse-friendly items in the mass market next year, especially with a return to normalcy unknown.

Investment switched to comfort

For many years now, accessories and tops have been the backbone of CNY collections, accounting for over half of the products – this year was no exception. However, breaking down by subcategories reveals a shift towards comfort-orientated products with a greater emphasis on T-shirts and sweatshirts this year. Accessory arrivals grew YoY, yet this was driven by handbags. Jewelry, a riskier investment, noted a 50% decline. Outerwear was more prominent in retailers’ collections than in the past three years, with jackets at Armani and adidas reacting to the wider trend of consumers wanting to be outdoors. Underwear and socks declined YoY – items to keep in mind for low-entry gifting options. 

Chinese New Year 2021

Last year, we predicted retailers would opt for more palatable versions of the ox with nostalgic cartoons and cow-related motifs. Many brands took this route with Kate Spade featuring Clarabelle Cow and milk cartons while Moschino, Marc Jacobs and Coach dropped products with cute, retro cow graphics. Taking over from its predecessor, Rita the Rat, Tory Burch introduced its own cuddly character, Ozzie the Ox.

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Key promotional themes

Or should we say “pro-MOO-tional” themes? Bovine motifs were at the forefront of retailers’ collections and featured prominently in email campaigns in cartoons or more traditional interpretations. Outside of the animal-themed merch, traditional red and gold graphics were present, along with oranges and blossoms.

Despite retailers taking a more active stance on racial injustice and D&I, only Modern Citizen used this time to call attention to the issue. In its February 9th email, it stated celebrating the culture of this holiday is “particularly poignant and necessary this year as prejudice and discrimination escalates against the AAPI community.”

Best practices for targeting the Chinese market 

As more promotions become digital-first, brands need to redefine their strategies in lieu of physical events. Ensure you have people signing off ranges and promotions who are culturally in tune and aware with a deep understanding of the traditions and superstitions. Revisit our unEDITED podcast episode with Ashley McDonnell, Account Executive at Google, discussing how important it is for brands to be respectful of cultural codes during CNY and the different ways luxury brands have tapped into the lucrative Chinese market.

We’d like to wish everyone celebrating Lunar New Year a very happy and prosperous year ahead!