As the Chinese New Year slowly approaches, the online retail business leading up to this event will face their busiest time.
The Lunar New Year in China is the equivalent of Christmas in Western countries and other parts of the world.
With the festivities in full-blown, many companies in China will be shutting down for a week or more, and workers will be taking time off for a long holiday, resulting in a big impact on the country’s global order fulfillment. This means a serious logistical situation for your e-commerce business.
Unless you’re living under a rock, with no Wi-Fi and all, you know that China is one of the major forces in today’s world economy and a very significant trading partner for many nations.
So, if this Sleeping Giant dozes off even just for a couple of days during the Lunar New Year, this could extremely affect the global supply chain, with your business from home (importing from China) taking the brunt of it all.
The Lunar New Year is commonly known as the Spring Festival in China. It is an annual fifteen-day celebration of the arrival of spring and the start of a new year on the first moon of the lunar calendar.
This event is the most important holiday ever celebrated in China and is also widely observed in other Asian countries like South Korea. Marked by many beloved traditions, such as decorating windows with red paper cuttings, the official dates of the holiday vary from one culture to another.
The Lunar New Year holiday kicks off with a feast of symbolic dishes that bring luck and fortune and culminates with a lantern festival.
The Lunar New Year is a showcase of the rich Chinese culture and their traditional background. It is the time of the year when families get together and enjoy a “Golden Week” of celebrating and relaxing.
It becomes customary to buy new things, gift others and travel to commemorate the fresh start of the new year. Therefore, it comes as no surprise that retail sales for goods during the Lunar New Year shoot up.
If you’re running an e-commerce business, this 2024 fair could mean boosted sales and lucrative deals. On that account, we suggest you get ready in time.
Did you know that revenue from retail sales during the Chinese Lunar New Year in 2021 reached more than $115 billion?
Without a doubt, this once-in-a-lifetime event opens so many rewarding opportunities for e-commerce businesses out there to increase their earnings—well, only if you can prepare in time before the festivity rolls in.
E-commerce businesswise, here are the good and the bad of China’s much-loved Spring Festival.
As mentioned, during the Lunar New Year, the entirety of the Chinese business association will shut down. They will momentarily halt their operations, which means you might need to find other factories to source products or wait it out until CNY is over.
This will create chaos in your orders and purchases, with all your shipments on hold without a clear restart date. And, since your suppliers from China are on vacation, you can also expect delays in updates and communications.
Chinese manufacturers will begin production slowdowns by the end of January 2024. In early February, which is a few days before the beginning of the Lunar New Year, workers will leave factories. A day before the festivity, all employees would have already left work by then.
Another thing to bear in mind is that these manufacturers typically unload their excess inventories by the end of the year before they start making new products.
This will prove really challenging for e-commerce businesses needing products during that period. Your supplier might send the goods, but that would be 15 days or more late. With sold-out inventories and no products shipped your way, you will be experiencing a terrible stockout and inconvenience your precious customers in the process.
Though not every region in Asia celebrates the Lunar New Year, it is still a pretty big deal throughout the Asian communities. The Chinese business network during the New Year is massive.
In 2018, China's consumer spending pulled in around $146 billion over the Lunar New Year holidays—a whole lot more sales than Thanksgiving weekend in America. This is a good reminder that China represents a pivotal growth market, which e-commerce businesses can really benefit from if they get their marketing kicks right.
In recent years, Chinese shoppers have also grown an appetite for high-quality, luxury goods. This means their disposable incomes are huge and continue to increase.
Well, if you learned a thing or two from China business conference, you can avoid stockouts and delays if you take the time to plan the event and perfect this guideline.
The first thing that you need to do to avoid interruptions in your online store business is to understand how the lunar calendar works.
Celebration days vary from year to year, and every year, the Chinese government will publish the dates for this cultural celebration sometime in November.
The 2024 date of the Spring Festival is scheduled to begin on the 10th of February. This means you need to prepare your goods weeks before this date, considering your consumers will make the purchase ahead of spending time with family.
In a nutshell, you need to pay attention to the dates, as they will speak volumes about whether or not you will repeat your superb online sales in 2023.
Don’t hesitate, and be upfront about any potential issues that you might have with your mainland Chinese suppliers.
Inquire about possible delays and ask when operations will be back to normal. Then, afterward, work together towards overcoming these problems.
Supply chain transparency is really important in building trust between suppliers and customers. By being transparent, you’re making a huge step towards it without being blindsided.
So, before the 10th of February comes knocking, we take it that you and your team already know what to expect.
On the contrary, you can perfect your inventory level and keep a "safety stock" to ensure seamless operation. How?
Go back to the previous year's inventory and sales data. Check the goods that you already have in your warehouse.
The thing is, don’t go around in panic and buy impulsively just because factories are closing up for the Lunar New Year.
Avoid having stale inventory by ensuring your sales and inventory numbers match up with your statistics before ordering a buffer.
While your Chinese supplier is on shutdown, you might want to consider having a temporary local supplier. With a backup in place, you can avoid disruptions and get products out on time, regardless of demand increases or regulatory issues.
Although this might be costly, you can sustain customer satisfaction and ensure reliability by meeting demands and deadlines. However, finding a temporary supplier can be a real challenge.
In any case, make sure to understand your contractual duties first before making the switch. If your current supplier operates in other locations, you can ask to transfer to another site.
But if you don’t want to switch vendors, you have to arrange workable delivery choices. Some overseas companies still run operations, even amidst the Spring Festival, so they might be able to meet your delivery schedule demands
Though not as chaotic as Single’s Day, the Lunar New Year is one of the most important festivities in China. This is a holiday that could last for days, even accounting for weeks of traditional celebrations.
So, as you prepare your e-commerce business for this event, it’s best to come up with a strategy that will cover the entire week of the Spring Festival. Be specific with your targeted demographic and offer a wide range of products. This is the perfect arrangement, considering the “impulse buys” happening in the Golden Week.
By now, you probably realize how significant the Chinese Lunar New Year is to the global Asian communities… and to your e-commerce business.
Missing the opportunities at this big event is a huge mistake! Get started with your astonishing sales agenda by hiring a virtual assistant who can support your online store, all the way from order processing to inventory management.
Remember, the Lunar New Year begins on the 10th of February, so you might as well book a consultation today before it’s too late.
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