Jan 28, 2022
by Ann Chen, 2022
Despite the global trials and tribulations of the last couple of years, China’s economy continues to boom. In fact, it reported an 18.3% growth in the first quarter of 2021. While indications show this growth may slow down, China is still an important market that plays a huge role in the balance of US imports and exports. In 2020, an estimated $615.2 billion of goods and services was traded between the US and China. If you have business links with China, you’re probably aware that the Chinese New Year is just around the corner. Are you prepared, however, for the impact this extended holiday could have on your sales figures?
The Year of the Tiger starts on February 1, 2022, with a public holiday running from January 31 to February 6. Factories, shipping, and shops close down, so if your business relies on Chinese shipping and manufacturing, you need to start planning now to avoid delays that could affect your yearly figures. To get an idea of the impact the new year has in China, roll Christmas and Thanksgiving together and then double the effect. Then add in the world’s biggest annual migration and the issues this brings with it. As Chinese New Year is family time, 80 million or more workers leave cities and manufacturing hubs to celebrate with their families back home in rural villages. To help you prepare and prosper during this period, we’ve put together four survival tips.
Top Tips for Preparing for the Chinese New Year
1. Be prepared for delays and stoppages
In the run-up to the six days of total closure from January 31, business, commerce, and retail start to slow down not only in China, but also in other Asian countries such as South Korea, Indonesia, Vietnam, the Philippines, Malaysia, and Singapore. In China specifically, production often grinds to a total halt a week or so before the holiday officially starts. Knowing that this annual slow-down and stoppage is coming is half the battle in preparing your business for the Chinese New Year. Communicate with your manufacturers and shipping agents in China now, asking them for their production schedules and shipping lead times, as well as when their offices will be closed. Once the holiday starts, expect a total lack of communication.
2. Plan well in advance
If your business relies on supplies, parts, and products from China, get ready for the New Year as far in advance as possible. Bear in mind that you won’t be the only company doing so, which will put added pressure on supply lines. To guarantee that your orders are fulfilled, plan for a buffer period between the production end date and the time your supplier is planning on shutting down for the holidays. To survive this period successfully, ensure that you’re on top of your inventory. To do this, you’ll need accurate records of your past imports from China at this time of year. With this information on hand, you can order enough stock to tide you over during the extended Chinese New Year. Get this wrong and your customers in the US and around the world might be left waiting for their orders, a situation that’s definitely not good for future business success.
Surviving the Chinese New Year is not just a question of production rates, but stock on shelves. Shipping agents will be overloaded at this time and there’s a good chance any orders you’ve already placed may be delayed. As well as being extremely busy in early January, many shippers will take advantage of this high demand by increasing their freight rates; another good reason why planning ahead is vital. In the long term, it’s worth making every effort possible to build up good relationships with your regular shipping agents.
3. Be prepared for post-holiday hiccups
Don’t expect everything to kick back to normal on February 7. With workers traveling long distances, many may not arrive back at the same time, while many don’t return to their place of employment at all. The Chinese New Year is seen by many employees as the best time for a change of employment and, very often, little notice is given to their previous employer. Factories often have to replace gaps in the workforce at very short notice. Lower-skilled and untrained staff may end up operating production lines, leading to lower-quality products making their way into your order. This can cause you some issues, especially if you don’t have time to return products and wait for replacements; another reason to get ahead of the game with your pre-New Year ordering.
4. Make the most of the upturn in home entertainment
The Chinese New Year is normally when big-budget films have their premieres and movie houses are at their busiest. With COVID affecting much of this, the Chinese are expected to spend more on home entertainment in 2022 than ever before. Streaming movies and music, and playing games online and on consoles are going to be more prevalent. If you’re in the gaming, entertainment, and mobile device industries, be ready to capitalize on this. Be sure to tap into the advertising availability afforded by streaming and gaming and push your products for future sales. Online shopping also experiences a major increase leading up to the new year, so make sure to localize your e-commerce business for the Chinese market to capitalize on a major sale period as well. To do this successfully, use the services of BLEND to ensure your websites and marketing materials are professionally translated and localized to Chinese.