Despite the rising cost of living, this year’s Chinese New Year sales in the region increased and Criteo’s Taranjeet Singh cites three lessons for brands that want to appeal to consumers whose spending behaviours have changed.
Rising inflationary pressures and increased cost of living are major consumer concerns that have led to changes in consumer spending behaviours. Despite this, sales during the Chinese New Year (CNY) saw healthy increases across the Southeast Asian region, likely due to the relaxation of COVID-19 rules. People across SEA finally got to celebrate with their loved ones, spending more on celebrations. Others were using the extended holiday for revenge travel, making up for the lost time during the pandemic.
Starting from January 2023, retail sales in SEA performed above baseline levels (average during Dec 18-31, 2022) until a week before CNY 2023, reflecting positive purchasing momentum in consumers. Retail sales peaked at 26% on Jan 5 and were still 17% higher than baseline nine days prior to CNY, signalling that consumers in the region continued to shop for festive needs close to CNY and expected retailers to be able to meet any last-minute demands.
Besides relying on physical shopping, SEA consumers were also using other channels for their festive needs as most of them were already familiar with online shopping due to the pandemic, signalling increased comfort levels in diversifying their purchase options. SEA saw double-digit increases in all site types, with desktop sales recording the highest uplift two weeks before CNY.
- Desktop sales saw an increase of 31%.
- App sales increased by 21%.
- Mobile web sales rose by 16%.
The share of mobile transactions performed slightly higher than the base period during the one-week window before CNY 2023. This uplift remained during the week after CNY 2023 (13% increase in SEA, 6% increase in Singapore and 21% increase in Vietnam).
Across the various retail categories, SEA continues to record improved sales performance in 2023:
- Fashion – Performed above baseline on the way to CNY 2023; SEA’s highest increase was 22% and Singapore was 22%.
- Food and groceries – Increase of 22% in SEA.
- Health and beauty – a 30% increase in SEA.
- Electronics – a 30% increase in SEA and 34% increase in Vietnam.
The current economic outlook has given rise to thrifty and savvy shoppers who are finding ways to get the best bang for their buck. If there are any lessons brands and retailers can learn from this year’s CNY shopper behaviour, it is that consumers are now more discerning in their demands and spending behaviours.
Three lessons from CNY 2023
- Consumers prefer a seamless hybrid shopping experience that combines online and in-store purchasing. According to Criteo’s research, consumers want a smooth shopping experience that creates loyalty and trust, including innovative and practical customer services such as BORIS (buy online, return in store).
- Utilise commerce media to drive meaningful outcomes and supplement consumers’ shopping journey. Consumers rely on retailer websites and mobile applications to complement their shopping experience, which highlights the importance of appropriately engaging with the right audiences. Retailers may ensure a greater reach from new and existing consumers by optimising the first party data and analytics through the commerce media platform, reaching high-intent consumers at the point of purchase, subsequently influencing sale convergence online. As such, emerging environments such as retail media will continue gaining traction in 2023. Savvy retailers know that they should continue expanding their media offerings to own their end-to-end customer journey.
- Consumers are now planning ahead and thinking of what to buy in bulk to maximise their spending power and make use of cost savings. According to Criteo's Rise of Savvy Shopper Study (Nov 20 to Dec 13, 2022), 40% of shoppers globally are buying gifts for future holidays and birthdays to get ahead of rising prices. Additionally, 64% of consumers globally are buying essential items (such as detergent and tissue paper) in bulk to get more value for their money. Despite saving money being top of mind, consumers believe that deals should not come at the expense of quality and they prize well-made products.
Marketers should keep these lessons in mind to maximise consumer traction for the rest of the year. Through commerce media strategies, brands can ensure a seamless hybrid shopping experience to build loyalty and trust. They should also leverage digital campaigns that effectively engage with audiences at shoppable moments in any environment.