Top 5 Sectors to Watch During China’s Lunar New Year 2024

Published on: January 31, 2024

Chinese New Year, also known as the Lunar New Year or Spring Festival, is a monumental celebration observed by over a quarter of the world’s population. It’s not only a pivotal event in the Chinese calendar but also one of the lengthiest, traditionally spanning about 15 days. During this time, many businesses in Greater China shut down, allowing people to spend time with family and partake in festivities.

The date of Chinese New Year is determined by the lunisolar calendar, usually falling between mid-January and mid-February. In 2024, the celebration commences on February 10^th, marking the transition from the year of the rabbit to the year of the dragon.

Amidst the traditional symbols of the festival — red envelopes, lanterns, fireworks, and customary foods like noodles and dumplings — certain product categories experience a surge in sales. Here we explore 5 sectors that typically see significant growth during this festive season.

Top 5 Sectors During Chinese New Year:

1. Health Supplements: A Trend Towards Wellness

In recent years, health and wellness have become a growing focus in China. The health supplement industry achieved a staggering US$17.8 billion in 2022, and is forecasted to reach around US$59.6 billion by 2027.

In a 2023 survey by the National Bureau of Statistics, China Post, and China Central Television, healthcare products ranked as the 3^rd most popular category among Chinese youth aged 18-35, just behind tourism services and tech gadgets. This demographic’s shopping choices are heavily swayed by social media giants like Xiaohongshu, Weibo, and Douyin, which play a pivotal role in shaping their views on health maintenance.

As Chinese New Year approaches, gifts that promote health, such as high-quality vitamins and supplements, gain immense popularity, particularly for the older generation who place a premium on wellness. A survey conducted before the 2023 Chinese New Year revealed that over half of the participants planned to gift health-related products, spotlighting the sector’s growing significance in gift-giving traditions.

2. Beauty: The Glamour of the Festive Season

Positioned as the world’s 2^nd largest consumer market for cosmetics, China’s beauty and beauty care sector is set to grow by 4.84% between 2024 and 2028, potentially reaching a market volume of US$85.01 billion in 2028. Skincare, claiming a 51.9% share, leads this growth.

In response, beauty brands are launching limited edition products for the Lunar New Year, with a specific focus on Chinese consumers born in the 1980s and 1990s. This age group is a powerhouse in beauty consumption, with women under 40 in China investing over US$141 monthly on cosmetics in 2020, representing nearly 70% of the total market.

The Lunar New Year is a prime opportunity for launching themed collections. The 2024 Year of the Dragon sees brands opting for safer marketing strategies, likely influenced by previous missteps. Instead of taking risks, international brands are focusing on tried-and-true tactics, leveraging the dragon’s symbolic association with luck, prosperity, and wisdom.

3. Toys: A Time for Joy and Giving

Chinese New Year is a prime season for gift-giving, especially for children. China’s burgeoning population of 256 million children under 15 makes this a lucrative time for toy brands, often marked by special promotions.

China’s toy market, valued at US$20.9 billion in 2023, is forecasted to reach US$47.4 billion by 2032, growing at a CAGR of 9.3% from 2024 to 2032. Significant growth has been observed in various categories, including IP-licensed toys, exploratory toys, puzzles, and plush toys. Post-Covid-19, traditional toys such as plush figures and anime garage kits have recorded growth rates of 15.6% and 10.9%, respectively. In toy shopping, factors such as educational value, entertainment, and the appeal of IP-licensed products are key consumer considerations.

For instance, LEGO’s Lunar New Year-themed sets, which celebrate Chinese culture and folklore, merge entertainment with education, allowing children to learn traditional tales through play. Their popularity among Chinese consumers is largely due to their cultural relevance. Their cultural relevance greatly contributes to their popularity in China.

4. Wine: A Toast to Prosperity

China’s burgeoning wine market, the world’s 2^ndlargest in terms of revenue in 2022, is a sector to watch. Despite lower per capita consumption compared to global averages, China’s wine demand is growing rapidly. In 2022, the average consumption was 1.12 litres per person, a steady increase from a decade earlier. Red wine is particularly favoured, accounting for about 95% of total wine consumption in China.

Imported wines are often seen as a symbol of sophistication and quality among Chinese consumers and are popular at business functions and as gifts. In 2021, over two-thirds of wine consumed in China was from New World regions. Chinese New Year, a time for celebration, often features wine, making it a popular choice during the festival.

5. Luxury Goods: The Height of Festive Splendour

China is currently the world’s 2nd largest luxury market, and is expected to grow in the next decade, with luxury consumption in the country predicted to make up between 35–40% of global luxury spending by 2030. The purchasing power of Chinese consumers is rising, and luxury brands are responding.

Many luxury brands have launched Lunar New Year collections, often featuring elements of the current zodiac animal, merging tradition with modern luxury. This fusion of tradition and modern luxury is epitomised by top fashion brands creating Chinese New Year capsule collections for 2024.

The trend of personalised luxury goods around Chinese New Year is anticipated to grow, underscoring the importance of this market segment.

Key Takeaways

Chinese New Year not only represents a time of cultural celebration but also presents significant commercial opportunities in various sectors, including health supplements, beauty, toys, wine, and luxury goods. These categories consistently demonstrate robust performance during the holiday season, underlining the festival’s influence on consumer habits and market dynamics.

As Chinese New Year continues to evolve and impact global markets, understanding and leveraging this festive period is crucial for international brands. WPIC Marketing + Technologies specialises in navigating these cultural nuances and market dynamics. Our expertise in driving market growth in China and across Asia can help your brand capitalise on this lucrative period.

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Top 5 Sectors to Watch During China’s Lunar New Year 2024

Top 5 Sectors During Chinese New Year:

1. Health Supplements: A Trend Towards Wellness

2. Beauty: The Glamour of the Festive Season

3. Toys: A Time for Joy and Giving

4. Wine: A Toast to Prosperity

5. Luxury Goods: The Height of Festive Splendour

Key Takeaways

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