As the world becomes increasingly interconnected, understanding and respecting cultural nuances is crucial for successful global business operations. One such cultural celebration that significantly impacts business in China and many parts of Asia is the Lunar New Year, also known as the Spring Festival, or Chinese New Year.
For those not familiar, here is a guide to understanding the significance of this holiday and its impact on businesses looking to plan any external outreach around this time.
Understanding the significance
The Lunar New Year is the most important traditional festival in China. Celebrated for 15 days (or sometimes more), the festival brings families together, symbolizing renewal and the ushering in of good luck and prosperity. Businesses, schools, and government offices shut down, as millions of people travel across the country to reunite with their families.
Outside of China, many other Asian cultures also celebrate the Lunar New Year. In Korea, the festival is called “Seollal” where younger family members must bow to their elders as a sign of respect and gratitude. As for Vietnam, it is called Tết Nguyên Đán and is the most important holiday of the year of which special meals are prepared for. Similar practices also exist in Indonesia, Mongolia, Singapore, Malaysia and Thailand – particularly in their respective Chinese communities.
Impact on Business Operations
- Temporary Closure of Businesses: Companies based in China typically close for an extended period during the Lunar New Year. Many close their offices a week or even longer before the festival and only resuming the operations at least two weeks after, disrupting the regular business cycle. Large international businesses tend to have some staff on hand during the holiday, but it’s likely certain services will not be available. In Singapore, the Lunar New Year is recognised as a national public holiday, and most local business will be shut for at up to 2 days. Many people also take this time to travel, and it’s not uncommon for the regular business cadence to be disrupted in the week before and after the Lunar New Year.
- Supply Chain Disruptions: Many factories in China shut down or operate with limited staff during the holiday season. This can lead to delays in production and affect the supply chain. Companies must communicate with their Chinese suppliers well in advance to prepare for possible disruptions.
- Logistical Challenges: The Spring Festival travel rush, also known as 春运or chunyun, is the world’s largest annual migration. Millions of Chinese return to hometowns from major cities where they work or study. The mass migration of people during the festival creates logistical challenges, affecting transportation and delivery schedules. Many companies avoid planning for events around this time, unless it ties in directly with Lunar New Year.
- Consumer Behaviour Changes: Chinese consumers tend to prioritize spending on gifts, travel and festivities during the Lunar New Year. Pay attention to tradition and culture when launching products, and take New Year customs and taboos into account. For example, it’s considered inappropriate to press for the repayment of debts during the celebration.
Strategic Planning for Non-Chinese Companies
- Early Planning: Non-Chinese companies should plan well in advance, considering the lead time required for approvals, coordination and logistics. This is compounded by the fact that the Lunar New Year is typically in February – which means the period between the English New Year and the Lunar New Year typically does not see the launch of any major events or campaigns. Most companies in markets that celebrate Lunar New Year will hold off on most major launches or decisions till after Lunar New Year.
- Clear Communication: Maintaining open communication with regional partners is crucial. Understanding their holiday schedule and planning together for any potential disruptions to goes a long way in communication your consideration and respect, eventually help building strong relationships and foster collaboration.
- Marketing and Sales Strategies: Tailor marketing campaigns to align with the festive season, offering promotions and products that resonate with the celebratory mood. Engaging with consumers through culturally relevant content can enhance brand perception during this time. However, it is crucial that any communications that tie into the Lunar New Year is vetted by people who are familiar with the cultural practices in their respective markets. This needs to be done on a country level, as there are local sensitivities between countries.
- Employee Morale: If your company has a presence in a market that celebrates the Lunar New Year, consider acknowledging and celebrating the Lunar New Year with your local employees. This can boost morale and strengthen the sense of community within the organization as well as sense of belonging and inclusion. Different countries will have their own practices, so it’s always best to check in with local teams on what should be planned. For example, in Singapore and Malaysia, there is a dish unique to these markets called “Lo Hei” that is a must for any Lunar New Year celebration.
Successfully navigating the complexities of the Lunar New Year requires a proactive and culturally sensitive approach. Companies that take the time to understand the significance of the holiday and plan strategically will not only minimize disruptions but also build stronger relationships with their Asian counterparts. If you’re unsure, speak to your in-market agencies to help you navigate the cultural nuances!
Adapting to the rhythm of the Lunar New Year can open doors to new possibilities and long-term success in the dynamic Asian market.
And from all us at Cognito, we wish everyone a Prosperous New Year ahead!
Kinki To is an account executive in Hong Kong