Christmas in the UK is already in full swing.
The UK remains a global shopping destination and traditionally sees a significant influx of tourists during the Christmas season. Retailers naturally plan a lot of spend around this, with extra staff and extra marketing. But this year it makes sense for those retailers to save a little for another holiday period just a few months away: Lunar New Year.
Chinese Tourists are Nowhere Near Back to Pre-Pandemic Levels
Chinese tourists have long been recognized as some of the highest-spending visitors in the world, with an affinity for luxury goods perfectly matched to the UK’s reputation as a shopping mecca. Prior to the pandemic they were the second-highest spenders in the UK after Americans and generally spent more per trip. But their return to our shores after the pandemic has been far slower than Americans’ — flight bookings are down around 50% of pre-pandemic levels.
This means that marketing spend aimed at these high-spending visitors over Christmas is likely to get less return than usual.
Instead, it makes sense to focus some money on a holiday that generally sees quite a few Chinese tourists abroad – the Chinese New Year, also known as the Spring Festival.
The Importance of Chinese New Year for Shopping Tourists
The Chinese New Year or Spring Festival is the most well-known and celebrated of the various Lunar New Years. It falls on a different date in the Gregorian Calendar every year as it is based on the lunar cycle. In 2024 it will fall on Saturday February 10 – and kick off the Year of the Dragon.
It’s hard to overstate the importance of Chinese New Year. A similar festival has been celebrated for well over 2000 years, far longer than any Christian holiday. The travel period surrounding the holiday is the world’s largest annual migration, with hundreds of millions of people travelling to see family both within China and abroad. Many also use the week-long public holiday period to go abroad.
Each year is associated with a specific animal from the Chinese zodiac, and 2024 marks the Year of the Dragon—a particularly auspicious and celebrated year.
To understand the impact of this shift, it’s crucial to recognize the importance of Lunar New Year to Chinese consumers. Beyond the cultural and familial significance, the Lunar New Year is a prime time for shopping. Many individuals receive red envelopes filled with money as a traditional gift, providing them with additional spending power. Much as gym subscriptions spike around January in the UK, shopping spikes for the Chinese during Chinese New Year as people look to start the new year off fresh with a new wardrobe, pair of shoes or earrings. As a result, shopping during this period is not merely a leisure activity but a cultural norm.
It is unlikely that travel next year will be back to the pre-pandemic peak. But it will be further along than it is this Christmas.
Harnessing the Year of the Dragon: Strategies for Retailers
So how do you harness the year of the dragon? Here are four ideas you still have plenty of time to implement.
- Thematic visual merchandising: Let Chinese shoppers know you know how important this week is and create some visual merchandising to display throughout the period – just as you would for Christmas. Incorporating dragon motifs and symbols associated with the Chinese zodiac can create a visually appealing and culturally resonant shopping environment. From storefront displays to in-store decorations, embracing the Year of the Dragon theme can attract attention and convey a sense of celebration.
- Get culturally competent: Chinese shoppers are a world away from American consumers. They are less likely to see their purchase as a simple transaction and more likely to ask very specific questions about materials and the like. Having staff knowing Mandarin or Cantonese isn’t essential, but make sure you have a good translation app installed on all staff phones, for example from Microsoft or Google, and make sure they have practised using it. Having information printed in Chinese characters is also a great idea.
- Make sure you accept a variety of payment methods. WeChat Pay, a mobile payment solution from the ur-“everything app” WeChat, has become the norm for transactions within China — so make sure you can accept it and display that fact! However you can’t rely solely on WeChat Pay either. Like most other international tourists, many Chinese tourists still get a large amount of cash out for their shopping and food and beverage (due to exchange controls, privacy of purchase issues on their cards and bank accounts, card cloning fears and more), so make sure you can accept cash at all your tills too.
- Partner with Chinese Influencers: Chinese consumers are very reliant on online recommendations from both their friends and Chinese influencers. Consider collaborating with an influential Chinese influencer to really amplify your visibility to this market. These individuals often have a significant following and can effectively promote Lunar New Year campaigns to their audience.
In conclusion, retailers should be proactive in adapting their marketing strategies to align with the shifting trends in Chinese tourism. By recognizing the significance of the Lunar New Year and the allure of the Year of the Dragon, retailers can create a shopping experience that resonates with Chinese visitors, ultimately driving sales and establishing a lasting connection with this valuable demographic. As the Year of the Dragon approaches, London and other UK destinations have the opportunity to become a preferred destination for Chinese tourists seeking a unique and culturally enriched shopping experience.
Sacha Zackariya is CEO of ChangeGroup International Plc, the world’s third-largest international bureau de change. As an expert in tourism, retail and finance, he wrote Leading Travel & Tourism Retail to help retailers overcome their most difficult trading period and get back on track. Zackariya has devoted himself to understanding tourist and retail behaviours and how this impacts where, when and how tourists spend money. He has lived and worked in more than 10 countries and cultivated deep relationships with leading brands, retailers, landlords, airports, governmental authorities and NGOs.