5 Reasons Chinese New Year Campaigns Underperform

5 Reasons Chinese New Year Campaigns Underperform

11 February, 2016 - Uncategorised

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Chinese New Year has been in full swing and luxury brands hustle for the attention of Chinese consumers during one of the busiest times of the year. However, despite the continued strength of the Chinese consumer when outside of China, many brands come away with campaigns underperforming in terms of reach and sales.

Here are the top 5 issues that the industry and brands need to consider in order to really generate effective Chinese New Year campaign ROI:

1) Timing – Perhaps the biggest reason for campaign underperformance is that many brands still wait till the last minute to kick off their Chinese New Year marketing plans, in some cases only a week or two before the holiday. As a result, most Chinese media have closed editorial weeks ago, ad spaces and KOL inventory are at a premium, with the best spots all gone and Chinese consumers have pretty much bought all they need to buy for the holidays during the January sales.

2) Saturation – Even with the economic slowdown and a rocky financial year in 2015 Chinese consumers still account for nearly half of all luxury goods. Despite this importance most brands tend to throw all their Chinese marketing budget and efforts into just 2 months of the year: Chinese New Year and October Golden Week. As a result messaging at these times of year has become increasingly saturated and campaigns get lost amongst the noise and brands then get forgotten about during the rest of the year. Consistency is the solution, with continuous communication and engagement throughout the year showing the greatest return on investment. Like they say, don’t put all your eggs in one basket (or two in this case).

3) Disingenuous – Another side-effect of only engaging with Chinese consumers during Chinese New Year, a deeply cultural holiday, is that it can come across as disingenuous commercialisation. This can often do more damage to a brand then good. Every year Chinese social media is lit up with all sorts of criticism levelled at brands and their holiday offerings creating a PR nightmare and more cost to maintain brand reputation, undercutting ROI. Consistent yearlong engagement allows for holiday messages and promotions to be better received and sincere.

4) Too Broad – One size does not fit all. The Chinese consumer has become and continues to become more diverse, both in terms of demographic profile and tastes. A single generalised Chinese New Year campaign may get noticed, but it won’t resonate with all. Campaigns need to be targeted to a brands specific Chinese consumer profile rather than a generalised assumption of all Chinese consumers. More importantly however is that the dissemination of the campaign needs to be just as equally targeted. This can be difficult due to the lack of transparency with Chinese traditional, digital and social media. This raises uncertainty and the question, is the campaign reaching the right people? Solutions are out there such as as Tencent targeted digital display, social listening platforms and publications with audited readership profiles like MINT EDITION.

5) Wrong Products – Lavish large scale gifting may have gone as a result of the economic slowdown and anti-corruption campaign, but gifting is still an important cultural aspect of Chinese New Year. Yet it’s the small gifts that are the winners, after all a Chinese tourist or expat’s luggage can only carry so much back to China. Focus on big ticket items should happen after Chinese New Year when returning students, expats and affluent tourists (visiting off-season to avoid the crowds) come flush with red envelope money to purchase full price items as a treat to themselves.

For more information on how to develop effective Chinese consumer campaigns and engagement please contact Steven Bywater. E-mail: s.bywater@wei-ukconsulting.com or give us a call on +44 (0)20 7434 7353.