When it comes to consumer spending the Chinese New Year – or Lunar new Year – is the equivalent of Christmas as hundreds of millions of Asian families come together to celebrate the festivities.
Marking 2024 as the Year of the Dragon, the so-called Spring Festival starts on February 10 and will result in a roar of consumer spending – even more so than usual given the pent-up demand from the years of Covid restrictions.
Key beneficiaries include travel, tourism and hospitality operators. Retailers – especially luxury ones – see a sales as consumers seek auspicious goods that symbolise prosperity and good fortune.
The tradition of exchanging gifts and red envelopes (hongbao) results in a booming business for companies specialising in gifts and souvenirs.
The period is also synonymous with elaborate feasts and family gatherings and thus elevated demand for festive food and beverages. The owner of Penfolds, Treasury Wine Estates enjoys a surge in demand for its upmarket lines such as Grange Hermitage.
“The Lunar New Year of the Dragon is broadly recognised in the industry as a key milestone marking the revival of tourism and related sectors between China and Australia,” says Joshua Zhou, co-founder and managing director of the Chinese- focused commerce house Aumake (ASX:AUK).
“It’s also seen as a symbol of rejuvenation and vigour.”
According to the Australian Retailers Association, 1.4 million Australians – 5.5 per cent of the population – identify as having Chinese ancestry.
(The festival is celebrated by many other Asian cultures including Vietnam, Malaysia, South kore and the Philippines).
Chinese visitor numbers to Australia have been increasing with the resumption of group travel, as well as more airlines resuming direct flights after China abandoned its zero Covid mandates 12 months ago.
“This year’s Lunar New Year will likely be the biggest in a number of years, with a large influx of tourists and migrants arriving in Australia in the past year,” Australian Retailers Association chief executive Paul Zahra told The Australian.
“Restaurants, hotels and travel-related businesses especially stand to benefit as they are directly linked to the festivities and the traditions of family gatherings and travel.”
The Australia China Business Council notes the improved diplomatic relations between China and Australia, marked by personal meetings between Anthony Albanese and Chinese President Xi Jinping.
“There is genuine anticipation around reconnecting with long-term partners, colleagues and suppliers that highlights that the success of our trade with China is built on the enduring relationships from people-to-people engagement,” says ACBC CEO Tom Parker.
As a provider of Australian goods and services to the Asian market (notably China), Aumake is a notable beneficiary of the festive period.
The Parramatta-based Aumake sells its own-branded products in China, including health supplements and wool and skincare items.
Aumake operates its eponymous social ecommerce marketplace platform, which connects Asian influencers and consumers with quality authentic Australian and New Zealand brands. This increases engagement with users and customers and allows the offerings to be reviewed transparently.
Aumake is also partnered with HK Huibeijia Brand Manage Co (HKH), which operates both online and physical stores across China. The latter includes 30 flagship stores, with access to up to 1000 more.
In November the company entered a non-binding agreement with the Hunter Valley-based Petersons Wines.
The idea of the tie-up is to offer premium tourism experiences for the Asian market, complemented with co-branded wines. Aumake also proposes a Hunter Valley marketplace to facilitate bookings (including customised tours) and showcase the region’s charms.
The company already is partnered with Grand Australia International Pty Ltd (GAT), which provides customised group and private tours for Chinese tourists in Australia.
“After enduring the pandemic for three years, Aumake meticulously developed a new business model in the second half of 2023, re-assembling its team with innovative strategies and prospects,” Zhou says.
“Combined with the improving trade relations between China and Australia and the increase in sales of milk formula and health products, this is expected to significantly boost Aumake’s resurgence and growth after the Dragon Year’s Spring Festival.”
“gong xi fa cai” (Happy New Year!)
This article was developed in collaboration with Aumake Limited. Aumake limited is a sponsored partner on The Executive Edition.
The Executive Edition may hold interest in it’s sponsored company at the time of publication.
