What Happened: China’s most important holiday — the Spring Festival — falls between January 31 and February 6 this year and might appear a bit different than usual. Amid the ongoing COVID-19 pandemic, this year’s festival is unlikely to prompt the world’s largest human migration (millions of people travel thousands of miles across China to their homes during the Lunar New Year), unlike years past. In fact, this holiday’s travel rush is likely to be the least busy of the past seven years, with an estimated 280 million railway passenger trips. Locals who want to travel home will confront multiple challenges, including targeted pandemic prevention and control efforts aimed at securing the 2022 Beijing Winter Olympic Games. As such, the Spring Festival certainly won’t be as lively this year. But will the economy suffer from it?
The Jing Take: In the past, locals used to pay in-person visits to relatives and friends, bringing them presents to celebrate Spring Festival. However, China’s COVID-free plan is reshaping this tradition. Since local governments and businesses have encouraged residents to stay home to minimize a virus spread and keep supply chains stable, the country’s travel economy is likely to get dampened. But this could allow other industries to flourish.
Shoppers might spend less money on presents and have more money for self-rewards. Therefore, personal care and luxury are likely to benefit from this trend. Meanwhile, the stay-at-home economy will see a boost, further fueling livestreams, e-commerce sites, and takeaway options for people reducing time outside their homes. So, if Maisons want to celebrate positive Spring Festival sales, their marketing activities should reflect those trends by doubling down on digital and personal goods.
Yet, the brands that give back to the community during this challenging time through initiatives that comfort families who cannot reunite are sure to fare very well in China this year.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.