3 Key Trends in the FMCG Industry during Chinese New Year 2023
Updated: Feb 3
As we near the Chinese New Year 2023, set to take place on Sunday, January 22nd, we look forward to welcoming the year of the Rabbit. The Rabbit, as the fourth animal in the Chinese zodiac, holds great significance in Chinese culture as it symbolises peace, prosperity and longevity.
This year's Chinese New Year (CNY) holiday will be unique as it is the first year since 2020 without domestic travel restrictions in China, which provides a positive outlook for various industries, including tourism, transportation and FMCG.
In light of this, we anticipate observing three key trends in the FMCG market during this significant holiday.
1. Nian Huo
Nian Huo refers to special purchases made for the CNY. Purchasing Nian Huo, as a longstanding tradition, has grown into a significant commercial opportunity in recent years as China's economy has developed and consumers look to treat themselves and their loved ones during this important festival.
Traditionally, the types of Nian Huo purchased vary from province to province and many people make sure to buy local specialities to share with returning family members who may be homesick. However, there are also certain products that are popular nationwide. These include snack foods and drinks that families can enjoy while watching TV and playing games together. According to research, 69% of consumers will purchase roasted seeds and nuts, 64% will buy snacks, and 63% will purchase alcoholic and non-alcoholic beverages as part of their seasonal shopping.
In addition to traditional Nian Huo, new trends are emerging for the 2023 Chinese New Year. There is a growing emphasis on healthy products as a core aspect of Nian Huo in 2023, as the Covid-19 pandemic has heightened awareness of health and wellness. Many people have focused on boosting their immune systems as a means of recovery after being affected by the covid. A survey revealed that 55% of respondents intend to purchase nutriment and health care products as Nian Huo, particularly for gifting. This includes items such as vitamins, ginseng, and probiotics. Additionally, Chinese consumers are also placing a greater emphasis on natural, sugar-free, and non-fried products when purchasing snacks and beverages, resulting in a 9 times sales increase for organic food compared to the previous year.
The New Year's Eve dinner is of paramount importance for the Chinese as it symbolises the joyful reunion of the family. However, the preparation of such a feast can be challenging and time-consuming. To cater for this, 3R (Ready to cook, Ready to heat, Ready to eat) food has become a popular and practical option for many individuals, especially younger generations, due to its convenience, quality, and variety of options. According to a survey conducted by iiMedia, approximately 27% of respondents have chosen to purchase 3R food for their reunion dinner. In response to this trend, both well-established restaurants and retailers have begun offering their own branded 3R food, with some localised flavours being particularly well-received by consumers, such as "bird's nest chicken," "Buddha Jumps Over the Wall Soup" and "Boiled Fish with Sichuan Pickles." Companies have also started launching 3R food gift boxes, which typically include about 10 dishes. The sales of these gift boxes on Douyin this year increased by 248% compared to last year.
2. Various shopping platforms
In the past, the primary means of acquiring Nian Huo was through brick-and-mortar retailers, given its strong CNY atmosphere. These retailers often feature traditional decorations such as red lanterns and Chinese knots, as well as background music that aligns with the holiday. Shopping venues like hypermarkets, supermarkets, and farmer's markets tend to be bustling with excited shoppers during this time.
As eCommerce continues to evolve, it's becoming increasingly common for customers to turn to online shopping for their Nian Huo purchases. Many major Chinese platforms now offer special promotions and discounts during this period, with the timing of these sales varying between platforms. For example, Douyin's Nian Huo festival runs from December 28, 2022 to January 7, 2023, while JD's festival lasts longer, from December 26, 2022 to January 28, 2023, with the company ensuring that deliveries will continue during the festival period.
In addition to being an opportunity for online shopping, the Nian Huo festival is also an opportunity for KOLs to engage with their audiences through livestreaming. One well-known example is Li Jiaqi, a top KOL in China. During the 2023 Nian Huo festival on Taobao, he held a total of nine livestreams, covering a range of products including cosmetics, snacks, electronics, and more, and the peak audience reached during these was 50 million. In a livestream focused solely on food, he even sold 900,000 packs of a Chinese brand's chicken feet.
3. Special edition for Chinese New Year
The Spring Festival presents a valuable opportunity for brands to connect with Chinese consumers by releasing special editions specifically tailored to CNY. These special editions often feature traditional Chinese elements, particularly in the colour red and/or incorporating imagery related to the current zodiac year, the rabbit. For example, the Chinese candy brand White Rabbit collaborated with Coca-Cola to release a Chinese New Year gift box, "好事成兔 (hao shi cheng tu)" which carries the meaning of good things coming in pairs, conveying well wishes to customers. Similarly, snack brand Be & Cheery promotes their CNY gift box by featuring illustrations of traditional celebrations such as having a New Year’s Eve dinner, setting off fireworks, and watching the Spring Festival Gala. It is worth noting that a significant portion of consumers is willing to pay a 5-10% premium for these specially designed Chinese New Year products.
The Chinese New Year holiday presents an opportunity for FMCG brands to connect with Chinese customers through special techniques such as festival editions and collaborations with KOLs. To effectively do so, it is essential to have a deep understanding of Chinese culture. The same applies to other traditional Chinese festivals. Our team of experts can assist in providing a comprehensive understanding of Chinese culture to help FMCG brands make a lasting impression on Chinese customers. If you are interested in learning more, please do not hesitate to contact us today.