Criteo, the commerce media company, has released 2022 Chinese New Year (CNY) insights to enable retailers to forecast consumer demand and ensure that they can tap onto the same trends for 2023.
Starting from January 2022, retail sales performed above baseline levels (average during 18 – 31 December 2021) until a week before CNY 2022 (February 1), reflecting positive purchasing momentum in consumers. In Southeast Asia (SEA), retail sales peaked at 27% on 25 January, a week before CNY, signalling that consumers in the region continue to shop for festive needs close to CNY and expect retailers to be able to meet any last-minute demands. Retail sales in the Greater China region (GCR) increased by 40% compared to last two weeks of December 2021.
Consumers would have already been familiar with e-commerce shopping due to the pandemic and the increase signifies their comfort levels with diversifying their purchase options. CNY 2022 saw consumers in SEA utilising other platforms besides physical shopping for their festive needs. In the GCR, app sales saw a significant increase two weeks before the event while SEA realised double-digit increases in all site types, with desktop sales recording the highest uplift.
In SEA, desktop sales saw an increase of 58%, app sales also increased by 29%, and mobile web sales rose by 30%. GCR, on the other hand, experienced a desktop sales rise of 50%, app sales up by 120%, and higher mobile web sales (+57%).
The share of mobile transactions performed slightly higher than the base period during the one-week window before CNY 2022 (12% increase in SEA, 9% increase in Singapore, 10% increase in GCR, 19% increase in Vietnam).
Retail categories continue to record improved sales performance in 2022:
Fashion performed above baseline on the way to CNY 2022, SEA’s highest increase was 24%, GCR was 34%, Singapore was 37% and Vietnam was 41%.
The food and groceries category doubled before CNY 2022, showing a notable uplift compared to the average during the last two weeks of December 2021. The highest increases occurred two weeks before the event for both GCR (103% increase) and SEA (86% increase).
The health and beauty category saw an 86% increase in SEA and a 103% increase in GCR; electronics saw a 30% increase in SEA and a 60% increase in Vietnam; and items in the home and garden category saw a 94% uplift in GCR.
“Chinese New Year is anticipated to bring about a surge in consumer spending and retailers must be prepared to capitalise on this opportunity. Brands and retailers have had a front row seat to the changes in consumer behaviour and needs over the past few years and will do well to act on these insights,” said Taranjeet Singh, Criteo's MD, Southeast Asia and India.
“As we approach this festive season, it’s imperative for brands and retailers to consider adopting a refreshed advertising strategy that will enable them to maximise outreach to their target audience across different platforms.”
Criteo noted that consumers are concerned about inflation and rising cost of living in 2023, giving rise to the savvy shopper who will be finding ways to get the best bang for their buck. The company named five trends that retailers should take note of:
- Consumers are heading online to search for the best deal despite the return of in-store shopping. According to Criteo’s research, consumers are taking the hybrid path of purchasing and want the best of both worlds; while returning to stores, they still rely on retailer websites and mobile applications to supplement their shopping experience.
Four in five consumers experience a significant improvement or some improvement in searching online for products which they intend to buy, indicating that consumers appreciate relevant and personalised advertising and ultimately ensuring greater reach from new and existing shoppers.
- Consumers will still purchase items they love. Consumers have no choice but to spend more on non-negotiables like mortgages or food, but a majority are still purchasing the goods and experiences they want most.
- Consumers are now planning ahead and thinking of what to buy in bulk to maximise their spending power and make use of cost savings.
- Consumers believe that deals should not come at the expense of quality. Though saving money is top of mind, shoppers still want great products that are made to last.
- They want more from brands than just discounts. Alignment with a brand’s values and loyalty programmes are strong motivators for shoppers to make a purchase right now.
With these insights in mind, retailers should keep these best practices in mind to maximise consumer traction for CNY 2023:
- Commerce media is being positioned as the 4th wave of digital advertising and has the power to reach and engage consumers where they’re actively browsing and buying. As such, emerging environments such as retail media will continue gaining traction in 2023.
While retail media refers to the advertising placed on a retailer’s e-commerce site or app by a brand to influence the customer at the point of purchase, commerce media is more inclusive and incorporates elements from retail media, performance marketing, and brand marketing.
- Savvy retailers know that they will need to continue expanding their media offerings to own their end-to-end customer journey, and marketers will keep investing in retail media because it works.
- A seamless hybrid shopping experience. If retailers can provide consumers with a smooth shopping experience, they will create loyalty and trust. Some measures include introducing innovative and practical customer services, such as BORIS (buy online, return in-store); this easy return policy is a top reason why consumers decide to purchase a product when shopping online.
- Appropriately targeting ads to target audiences. Retailers may ensure a greater reach from new and existing consumers by optimising data and analytics on their websites and apps, allowing for targeted ads at the point of purchase, subsequently influencing sale convergence online.