Chinese New Year: A Growing Ecommerce Opportunity

Ronald Wu

March 7, 2022

Spring Festival—also known as Chinese New Year—is a growing opportunity for brands. Between the rise of online shopping and the spreading popularity of the week-long celebration, we’ve seen staggering revenue increases for brands who invest.

Spring Festival, a changing tradition driven by the rise of ecommerce

Traditionally marked with shopping—as buying new items is seen as an embodiment of a brand-new start in the new year—Spring Festival is an important period for brands. Top selling products vary from festive food, seasonal flowers and accessories, to clothes, furniture, and electric appliances.

Spring Festival usually falls between late January and mid-February, aligning with the start of the Chinese Lunar calendar. What you might not realise about Spring Festival is that this week-long holiday is growing into a promising ecommerce opportunity, comparable to Singles’ Day.

This year, Pattern has leveraged its expertise on local marketplaces, such as Tmall and JD.com, to take advantage of the changing Chinese New Year shopping behaviour, helping some of its brand partners achieve 500% year-over-year sales growth during the period.

The switch to celebrate online

During the Chinese New Year, historical retail sales rose for more than a decade until the COVID-19 pandemic struck in 2020. The pandemic disrupted not only the country’s economy, but also a traditional custom of the Chinese—those who move from the countryside to cities for livelihood returning to their hometown during the Spring Festival to reunite with families. The Chinese government called for its people to stay put during the festival's celebrations to fight the pandemic, resulting in less need to buy festive foods and gifts. That is, until ecommerce turned the tide.

The revenue results of an online celebration

At the Spring Festival in 2021, while still adhering to the stay-put call, the Chinese government joined hands with some local online marketplaces and logistics companies to initiate an online Spring Festival shopping event that ran for 30 days and eventually brought in RMB 906 billion (USD 140.2 billion). As a benchmark, the 2021 Single’s Day raked around RMB 965 billion (USD 152 billion) in sales value. These encouraging results rallied the administration and business community together to create the second edition of the month-long shopping event for 2022’s Spring Festival.

Driven by the government-business joint effort, physical retail sales during the 2021 Spring Festival period also saw a noticeable rebound, as official data shows that total revenue made by key companies in the retail and catering categories stood at RMB 821 billion (USD 127.1 billion) during the 2021 Spring Festival, rising 28.7% year over year and 4.9% higher than pre-pandemic sales in 2019.

The growth momentum continued in the 2022 Spring Festival. During the first five days of the Spring Festival holiday, the People's Bank of China’s clearinghouse platform processed online payment transactions worth RMB 4.2 trillion (USD 660.3 billion), rising 11.6% year-over-year. Leading Chinese marketplace JD.com also announced that its turnover during the first six days of the holiday increased by more than 50% year over year.

The “non-stop” fulfilment surge

Before the pandemic, China's logistics and express delivery sectors tended to grind to a halt during the Spring Festival week, so orders were expected to be dispatched more than a week before the holiday. Things have changed since 2021, as industry players started responding to the government’s call to provide “non-stop” fulfilment services during the period to enable Chinese shoppers to “stay put, buy online.”

The effort yielded a remarkable result, as official data showed China's postal industry collected and delivered a total of 660 million parcels during the 2021 Spring Festival week, which was a 260% increase on a year-over-year basis. During the 2022 Spring Festival week, we even saw some 749 million parcels being handled by the country’s delivery sector, as Chinese marketplaces have worked with logistic operators to ramp up the scale of non-stop fulfilment services.

While Chinese marketplaces still reserve this non-stop fulfilment service to the most highly competitive brands on their platforms, Pattern has helped our partners secure this offer. Thanks to the fulfilment advantage at this Spring Festival, we saw some of our partners yield exciting results of more than 500% in sales growth compared with the same period last year.

The ongoing benefits of Spring Festival

Thanks to the convenience of the ecommerce ecosystem, the hottest selling items are getting more and more diversified. For example, in 2021 Alibaba found that the sales for floor-sweeping robots, window cleaning robots, and floor washing machines increased by 100%, 300% and 1,800% respectively, year-over-year, as younger shoppers often bought such gadgets as a gift for parents.

Another observation is regarding the synergy between Spring Festival and other significant holidays or events happening in the period. The 2022 Spring Festival week coincided with the Winter Olympics in Beijing, resulting in sales of ice sports gear and ski equipment on Tmall increasing by 300% and 180% respectively, year-over-year. In 2021, Valentine’s Day fell in the middle of the Spring Festival week, and JD.com observed that the demand for jewellery, beauty, watches, and other gifts rose significantly during this period. For example, the amount of women’s karat gold necklaces and yellow gold pendants sold increased 6.2 times compared with the same period in the previous year.

How to tackle the opportunity with Pattern

To exploit the thriving opportunity from Spring Festival, brands need to have a strong team of industry experts in the local market to stand out from the stiff competition from local and overseas players.

Pattern can accelerate your marketplace business around the world—we partner with brands through a unique model where we purchase our partner’s stock and sell it for them on online marketplaces, such as Tmall, JD.com, Lazada, Amazon, Shopee, Coupang and eBay.

Not only is Pattern in the top 5% of authorised Tmall Trade Partners, we also have boots on the ground. Pattern has a local team in China providing brand partners with a comprehensive service that help them protect their brand, drive growth, and scale distribution.

Interested in tackling the Chinese ecommerce opportunity? Get in touch and learn what we can do for your brand.

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Sept 27, 2022

Global Ecommerce Weekly News: 27th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon drives renewable energy push with 71 new projects Amazon is planning to add 2.7 gigawatts of clean energy capacity through a couple of new projects as the company attempts to use 100% renewable energy by 2025. The ecommerce business will soon have a total of 329 renewable energy projects, generating 50,000 gigawatt hours of clean energy, which is equivalent to powering 4.6 million US homes every year. [Read more on Reuters](https://www.reuters.com/business/sustainable-business/amazon-drives-renewable-energy-push-with-71-new-projects-2022-09-21/) Amazon launches Prime Early Access Sale Amazon is launching a new 2-day shopping event for its Prime members only, beginning on the 11th of October. Across 15 countries, Prime customers will have access to the shopping event, with thousands of deals on offer globall, ranging from fashion to electronics to essentials. The event has the purpose of giving Prime users the chance to spread the cost of items over the winter months, 6 weeks ahead of Black Friday. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/26/prime-early-access-sale/) --- Other Marketplace News --- Shopify unveils new localisation tool Shopify is launching a new localisation tool, called Translate & Adapt, which works with Shopify Markets to offer localisation for sellers who are looking to expand into new markets. The tool translates a user’s online store into different languages, including product pages and information pages. Merchants are also able to create different shipping terms for each market using the new tool, which allows international expansion and offers a more localised consumer experience, unveiling new potential. [Read more on Ecommerce News](https://ecommercenews.eu/shopify-launches-new-localisation-tool/) Etsy is set to invest hundreds of millions into its marketing platform Etsy CEO claims that the company is on route to spend more than $570 million USD on marketing this year. Even during a time of macroeconomic pressure, inflation and rising interest rates, the company is preparing itself and its sellers for the upcoming holiday season and is focused on retaining interest from buyers. [Read more on Yahoo News](https://uk.news.yahoo.com/etsy-600-million-on-marketing-ceo-154054219.html) --- Other Ecommerce News --- Meta looks to cut costs by 10% in the coming months Meta employees are facing job redundancies as the company plans to cut its costs by 10% over the next few months. Meta reported a 22% YoY increase in costs and expenses, totalling over $20 billion USD. The cuts are expected to come in the form of job redundancies as a result of department reorganisations rather than formal layoffs. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/22/meta-to-slash-costs-by-10-over-coming-months/) DHL teams up with Quadient to offer smart locker deliveries in the UK DHL and tech company, Quadient, have partnered to offer smart lockers parcel pick-up throughout the UK. The new contactless, secure locker stations will give recipients more choice and flexibility to receive their parcels at a time and location best suited to them. The partnership plans to install 500 locker stations across the country by the end of 2022. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/21/dhl-partners-with-quadient-to-offer-smart-locker-delivery/) The online fashion market is set to be worth nearly $170 billion USD in 2025 The European online fashion retail market is set to grow 50% by 2025, with an online turnover of $170 billion USD, which is 33% of the retail branch’s total. Cross-border marketplaces prove to be the largest drivers of this growth, with online websites and apps like Vinted largely pushing the market’s online growth. Zalando recently became the largest cross-border fashion retailer/marketplace, responsible for 11.7% of the online market’s share. [Read more on Ecommerce News](https://ecommercenews.eu/online-fashion-market-worth-e175-billion-in-2025/)
Sept 26, 2022

Top 5 Ways to Prepare for Peak with Google Ads

Peak season is almost upon us and with all signs pointing to it starting earlier than ever, with Christmas gifting searches now ramping up in August and September, it’s time to start preparing for peak. In this article, we’re sharing our top five tips for planning and preparing for peak season with Google Ads and the strategies required to get your Paid Search ready so you can drive success over this crucial period.

1. Go Early

In 2021, gifting search terms started increasing in popularity in August. The general trend is that people are looking, researching and weighing their options early, so it’s best to start your Paid activity early to ensure that you’re capturing that early research traffic. This will help drive revenue alongside aiding those consumers who are in their research phase.

From 2020 to 2021, spend during Cyber Week actually only rose 2% but in the weeks leading up to it, it increased by 16%. However, Cyber Week is still the biggest period during the latter half of the year, accounting for 23% of all online spend by consumers over peak. Being prepared and starting early will help you to maximise your time during this period.

2. Get Ready for Privacy Changes

 According to Google, 48% of global consumers have stopped buying or using a service due to privacy concerns. Privacy is front of mind when consumers are shopping online and we know that Google is phasing out 3rd party cookies in 2023. This is going to make it much harder to track users online and it’s something that brands need to think about this now – waiting isn’t an option.

From a Google Ads point of view, you want to ensure you have set up the Google Ads tag across your site and have enabled ‘Enhanced Conversions’, which ensures all conversions are tracked and allows you to monitor other actions such as ‘Add to Cart.’ This is relatively easy to set up, especially if you use ‘Google Tag Manager’.

It’s also vitally important that you build up your first-party data during this time as this is data you own and it can be used when targeting consumers that have provided your brand with their email address. Pattern’s own experience shows that by segmenting and using first-party data, you can see a 10% improvement in revenue and ROI.

3. Ensure Consumers Can Discover your Brand

A full-funnel approach is now more important than ever as consumers become more discerning and have more choices than ever of where to shop.

Pattern has seen success with Google Ads’ ‘Discovery Campaigns’ (image-based ads that appear on Google platforms such as Gmail and the Google app), which have driven success both from a traffic and revenue perspective.

The performance of these campaigns is significantly enhanced by adopting a segmented and nuanced approach to first-party data and incorporating these into your campaigns. Other options for a full-funnel approach include YouTube and testing bidding on keywords that are more representative of the research phase. (e.g. ‘best baby clothes’ for a baby clothes brand)

4. Get Moving with Performance Max

Earlier this year, Google announced that they were moving away from Smart Shopping and launched Performance Max. This is a new campaign type that incorporates features and placements from Smart Shopping but expands them onto other platforms such as Gmail but also alternative creative options, such as images and videos.

Since Google has already started automatically upgrading Smart Shopping campaigns to Performance Max, expect to see some fluctuations in the first 2 weeks following the switch over but results generally seem positive. We recommend upgrading sooner rather than later to limit any potential impact to peak period.

5. Flight Budgets Accordingly

Peak period will be even more competitive than in 2021 and you’ll need your budgets to support this period, we recommend boosting budgets in October to start capturing that early peak traffic. As we enter November and the Cyber Period, start early and make sure you are capturing those consumers looking for early bargains, ensuring you are being nimble in your optimisations and reacting to the data that you are seeing.

Overall, peak period is vital to help drive your sales and by preparing early, you will see strong results and drive success for your brand. If you want to discuss how your brand can navigate this next peak period, contact us to discuss your options with our performance team now.

Sept 20, 2022

Global Ecommerce Weekly News: 20th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon to raise pay and add extra work benefits for delivery drivers Following the rise in fuel prices and protests by Amazon workers, the ecommerce giant is raising its delivery drivers’ pay and adding more work benefits. Amazon has mentioned that it will be investing $450 million into rate increases along with an education program and a Delivery Service Partners program. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/14/amazon-to-raise-delivery-drivers-pay-and-add-more-work-benefits/) Amazon announces it will give away shipping software to merchants at no cost Amazon has recently announced that it will be giving ecommerce merchants free software to manage shopper orders on and off its platform as it extends its reach. The ecommerce giant will be ending monthly costs for sellers using Veeqo, a shipping software it recently acquired and instead offer to them a new, free shipping software. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/16/amazon-to-give-away-shipping-software-to-merchants/) --- Other Marketplace News --- Walmart unveils new virtual fitting rooms In an effort to drive clothing sales, Walmart has launched virtual fitting rooms while competitors reduce spending amid the cost of living crisis. The virtual try-on tool can be used by Walmart customers to virtually measure the clothing items and see how the products would look on them. Shoppers will now be able to see how over 270,000 clothing items on Walmart’s ecommerce site would look on their bodies. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/15/walmart-launches-virtual-fitting-rooms-to-drive-clothing-sales/?utmsource=Retail+Gazette+Subscribers&utmcampaign=2da7f0f8f8-EMAILCAMPAIGN202209150742&utmmedium=email&utmterm=0d23e2768b6-2da7f0f8f8-61040615) THG slashes sales and profit expectations The Hut Group has slashed its forecasts for 2022 as rising interest rates, inflation and energy costs take a toll on consumers. Previously, THG estimated its sales growth to be between 22-25% but after a recent evaluation, has lowered this prediction to between 10-15%. Initial predictions did not take into account the negative effects of ceasing sales in Russia and Ukraine along with the impact that the cost-of-living has had on consumer spending. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/15/thg-slashes-forecast-as-cost-of-living-crisis-hits-consumers-wallets/) --- Other Ecommerce News --- DHL and Post Office team up to provide click and collect services Through a partnership between delivery company, DHL and Post Office, a new click and collect service is to be tested at Post Offices before rolling out to over 1000 branches across the UK. Online shoppers will now have the option of choosing their local Post Office as a collection point, and DHL will fulfil the delivery aspect, opening up networks for both parties. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/14/post-office-partners-with-dhl-express-to-provide-click-and-collect-services/) US consumer watchdog plans to further regulate the BNPL sector The US Consumer Financial Protection Bureau (CFPB) has raised concerns regarding the collection of consumer data and the fast-growing nature of the BNPL sector, which includes companies such as Affirm and Klarna. The CFPB is worried that these companies could be negatively impacting consumers’ financial health and aims to put better regulations in place to ensure consumers are safe and empowered. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/16/us-consumer-watchdog-to-start-regulating-bnpl-sector/) Japanese ecommerce market estimated to grow by 6.9% in 2022 The ecommerce market in Japan, largely dominated by domestic online retailers including Reakuten and Mercari, is set to reach $194.3 billion USD in 2022, after seeing an annual compound growth rate of 5.2% between 2018 and 2021. This makes Japan the fourth leading ecommerce market globally, following China, the US, and the UK. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/13/japan-ecommerce-market-to-grow-by-6-9-in-2022/) Ecommerce brands are spending more on TikTok ads TikTok may soon be surpassing Facebook and Google as the most lucrative advertising channel, with ecommerce brands spending 60% more on TikTok ads in Q2. Facebook is still ahead as the top choice for ecommerce advertisers but only grew by 5.6% from Q1, while Google grew 20.5% in Q2, and Snap declined 10.8% in Q2. [Read more on SearchEngineLand](https://searchengineland.com/ecommerce-brands-spent-60-more-on-tiktok-ads-in-q2-387876)