We Shop All Year, but E-Commerce's Real Showdown Is Over "New Year Goods"

You may already be drowning in e-commerce New Year sales. And yes, this shopping festival is even more ferocious than Singles' Day ("Double 11") and Black Friday.

E-commerce ads for "New Year goods" (nianhuo, the food, gifts, and supplies people stock up on for the Lunar New Year) once again cover the subway, buses, video sites, and the screens inside elevators.

On the home pages of Taobao, Tmall, and Juhuasuan, the words "Alibaba New Year Goods Festival" hang prominently on red-themed pages. JD.com's Spring Festival sale spans food, fresh produce, wine and spirits, maternity and baby products, beauty, computers, digital gadgets, phones, and home appliances. Amazon, long criticized for moving slowly in China, launched a New Year goods fair at almost the same moment under the theme "Celebrate Chinese New Year Worldwide." Fresh-food e-commerce players such as Benlai Life, Tiantian Fruit, and Xiachufang have also joined the melee under all kinds of New Year banners.

The bustle building toward the Lunar New Year looks like a replay of Double 11. E-commerce companies large and small are once again moving together at the same moment. This time, though, no single player owns the home field. Instead, in the holiday mood, every one of them has hung out the "New Year goods" sign.

Judging by when the ads appeared, Alibaba moved first. Half an hour after Double 11 ended, Alibaba CEO Zhang Yong announced to the media at the Water Cube that Taobao would hold a New Year Goods Festival. A little over a month later, Jack Ma formally launched it at the Rural Taobao summit in Yan'an.

Taobao's official New Year campaign began warming up on January 14, started formally on January 17, the Laba Festival, and ended on January 21. JD.com promoted its sale everywhere, from TV and outdoor ads to online media.

"In December I traveled to a lot of places, first-, second-, and third-tier cities. I found that buying New Year goods for the Spring Festival is a pain point consumers share. Wherever consumers have this need, we provide a solution," Xiong Qingyun, vice president of JD.com Group and head of JD.com's marketing center, said at a media briefing for the Spring Festival sale. "This year we are pushing it as a strategy."

In fact, the Spring Festival has always been a sales peak for e-commerce. During last year's Spring Festival, JD.com's orders in North China alone grew 60%-70%. SF Express Select said its sales during the New Year goods season ran at about four times normal levels.

Compared with Double 11, this looks like a moment when consumer demand is even more concentrated. Whether it is supplies for the holiday or gifts for visiting relatives and friends, Spring Festival spending that used to be scattered across offline shops seems to have been crowded onto websites. What we want to know is whether these e-commerce companies are meeting demand or creating it. How, for example, did the "New Year goods" you ended up buying get into this shopping festival in the first place? And for a young consumer, are the New Year goods they have in mind still the same thing their elders have in mind?

What Do E-Commerce Companies Mean by New Year Goods?

As the first to move, Alibaba built this New Year Goods Festival mainly around rural products. In the festival's first 11 hours, the Yuanfeng Apple Cooperative in Luochuan County, Shaanxi, sold 180,000 jin (about 90 tonnes) of apples, equal to a full year of the area's online apple sales. Traditional regional New Year specialties such as Guizhou local products, Gannan navel oranges, and chili sauce also sold briskly under the theme "New Year, More Flavor."

After the festival's five-day main event ended, Taobao's New Year goods section rolled out five more "New Year flavor" markets, themed around farm-made goods, gifts from time-honored brands, global food, hometown reunion dinners, and trendy gear.

Alibaba spent the better part of a year preparing the festival. Sun Lijun, general manager of the Rural Taobao business unit, said in an earlier interview: "We don't want to define the New Year Goods Festival as a holiday for selling goods, but as a way to change how ordinary Chinese people celebrate the New Year." The line echoes the way Tmall invented Double 11 in the name of a holiday for single men and women. By now, hardly anyone even calls it Singles' Day anymore.

JD.com and Amazon put imported goods on their New Year lists. "When we talk with consumers, especially in first-tier cities, they still have strong demand for global-shopping products during the Spring Festival," Xiong Qingyun said. "They hope to buy some imported food for the holiday, and even take some back to their hometowns. So food and baby products all become part of Spring Festival shopping."

"For the Lunar New Year, we have just added four million new overseas products," Niu Yinghua, vice president of Amazon China, told QDaily. "Many of the big brands we added were chosen after earlier consumer research into which brands people like, and brought in as New Year gifts."

Amazon's global New Year goods fair runs in three phases from the 12th to the 31st.

"The first phase focuses on household goods. We think people may buy pots, bowls, and kitchen utensils early. The second phase is mainly clothing, plus food and drinks. By then people have started browsing and looking at clothes, and we prepared different themes along the way," Niu Yinghua said.

"For Chinese New Year, consumers still like red, including in bags and clothing, so we devoted a whole day to a Chinese-red special." The last phase is a store-wide carnival, she said. "Food in particular is the top priority. Food bought near the end of the year keeps longer into the holiday. Gift boxes of food and drinks, along with Chinese elements such as Chinese teahouses, are pushed at this stage."

Suning.com's approach resembles Alibaba's. Its Super New Year Goods Festival ran under the theme "rustic New Year flavors into the city, foreign New Year flavors into the village." At a media briefing, it even had fruit, fresh produce, and wine and spirits walk a runway as models.

Benlai Life has run its "7·17 Go Home for Dinner Festival" three years in a row. By this January, every e-commerce company was running a New Year goods festival, and Benlai Life followed in mid-January. Having noticed many young people buying New Year goods early and shipping them home, it expanded its fresh-food delivery in North China from 22 cities to 43.

Peng Yu, marketing manager at Benlai Life, told us: "The Spring Festival is a very important holiday for Chinese people. We are very glad to take part in the New Year goods festival. We give consumers a lot back, and we are also happy to create festivals ourselves."

"Once January begins, the e-commerce New Year goods season begins. Mainstream domestic and foreign e-commerce companies such as JD.com, Tmall, and Amazon all work with us," Zhang Yuang told QDaily. He runs the New Year goods feature at Smzdm ("What's Worth Buying"), a shopping-guide community. "In content, there are not only traditional New Year goods but also high-demand categories such as clothing, shoes and bags, and beauty and personal care. In scale it is no smaller than big shopping festivals such as Double 12."

Smzdm's New Year goods feature gathers deals from platform e-commerce, cross-border e-commerce, and specialist fresh-food e-commerce. Besides regional specialties, products tied to traditional customs, and the appliances and gadgets people like to buy around the Spring Festival, discounted online travel products such as cheap flights and hotels also count as New Year goods.

"The scope of New Year goods keeps getting wider. Anything related to the New Year can count," Zhang Yuang said. "In the past, older people bought their New Year goods at wet markets and supermarkets: ingredients for the holiday table and gifts for visiting relatives and friends. Now that young people have joined in, both ingredients and gifts have become more varied, and they come from all over the world and from both city and countryside."

Semi-prepared-food e-commerce companies such as Weiku and Xinwei have made the New Year's Eve reunion dinner their way in. They have teamed up with restaurants that serve reunion dinners during the Spring Festival, extending pre-cleaned, semi-prepared ingredients, once limited to home-style dishes, to more elaborate New Year dishes. By using same-city delivery or encouraging customers to pick up at the restaurant, they also get around the logistics bottleneck caused by couriers' holidays.

New Year goods used to be bought by elders. How do e-commerce companies get young people involved?

E-commerce companies have all joined the New Year goods festival at once, and whatever they sell, it is at bottom a business aimed at young people. In the traditional picture, elders buy the New Year goods: dried seafood, fish, meat and vegetables, spring couplets, firecrackers, and new clothes for the holiday.

But as the idea of "New Year goods" has stretched, e-commerce companies that fold every category of goods into it are in effect treating the Spring Festival as one more moment when shopping demand bunches up. And while the big platforms ride the Spring Festival for promotions, newer e-commerce players have been changing New Year goods in the narrow sense.

"We target young people who are relatively ahead as consumers, such as students, white-collar workers, and young mothers, and we select products for them," Li Qiyuan, CEO of Chengmi, a local-services recommendation community, told QDaily.

"I understand New Year goods as the special things people look for in the setting of the New Year," he said. "With consumption upgrading, we see users getting pickier. They buy high-end takeout and craft beer from us. Is that traditional New Year goods? No. But at a Spring Festival gathering, it is exactly what users need."

Chengmi's e-commerce service has been online for only three months. As the Spring Festival approached, many products on the platform went offline because the shops selling them closed for the holiday, so the operations team developed new items as New Year goods.

"We wanted to use the shops in the city that are still open, and sell the dishes they normally sell in their stores," Li Qiyuan explained to QDaily. "Take this Jingbajian, the eight-piece Beijing pastry set. Customers love ordering it at the restaurant. We turned it into New Year goods that you pick up directly at the store. When young people go home for the New Year, they want to bring some Beijing specialties, but something a little different. This fits well."

Once it went online as New Year goods, the Jingbajian pastry gift box sold 1,000 sets in a week. Benlai Life and other fresh-food e-commerce companies also get young people buying for their parents, but they rely on nationwide delivery: young people buy online the New Year goods their elders would otherwise have gone out to buy, and ship them home ahead of time.

Peng Yu, head of marketing at Benlai Life's headquarters, told QDaily that most people buying New Year goods on Benlai Life were born in the 1970s and 1980s, buying ingredients for their own households or for their parents. Data since the North China delivery area expanded show a clear trend of young people buying New Year goods online and shipping them home early.

Alibaba's newly released China New Year Goods Big Data Report shows that for 13.66% of orders placed during the festival, the delivery address switched from a regular address in a first- or second-tier city to a backup address in a smaller city, or even a county or village.

Three Squirrels, which started out selling nuts and snacks, relies on New Year gift packs for most of its sales. "Roasted nuts and seeds are traditional New Year goods. It used to be mainly sunflower seeds and peanuts. Now it is mostly pricier nuts like pistachios and pecans," Pan Daowei, special assistant to the chairman of Three Squirrels, told QDaily.

Its back-end sales data show one change from earlier years: an unusually large number of people are buying gift packs. Before the peak New Year goods season had even ended, it had sold more than 4 million gift packs, nearly twice the total for all of last year's New Year goods season. "After several years in this business, we can see consumption upgrading, and nuts are becoming something every group buys," Pan Daowei said. "In 2012 and 2013, people still bought piecemeal, two bags of this and two bags of that. But starting this January, we found gift packs held an overwhelming lead."

Apart from family consumption, gift pack sales mainly serve company employee benefits and gift-giving. During Alibaba's five-day New Year Goods Festival, Three Squirrels sold 500 million yuan worth of goods.

"Alibaba launched the New Year Goods Festival and concentrated when and where people buy during the New Year period. Alibaba built a stage, and merchants like us came to perform. We would sell well even without the festival; it just helps us focus our internal resources," Pan Daowei told QDaily. Beyond the feature pages on Taobao and Tmall, Three Squirrels spent tens of millions of yuan on its own ads online and on TV.

Many Couriers Go Home for the New Year, but Online Shopping Never Stops

From Three Squirrels' experience in past years, the New Year goods season accounts for 25% or even 30% of its annual sales. To ship on time, this year Three Squirrels increased its city warehouses from 4 to 11.

For merchants in the festival, pre-holiday shopping demand combined with logistics pressure makes this one of the most stressful stretches of the year.

"Double 11 is just a drill. The New Year goods festival is the real battle," Pan Daowei told QDaily. "Double 11 and Double 12 are one-day businesses. You sell 260 million yuan one day, and the next day it's 10 million, and a few days later you've recovered. The New Year goods festival is different. It runs 30 or 40 days from start to finish. It's a war of attrition."

The biggest difference between the New Year goods festival and Double 11 or Double 12 is probably delivery. By late January, many courier companies had announced their holiday schedules. That is one reason the New Year goods festival starts weeks before the holiday and ends before the year is even out.

Introducing the Alibaba festival, Sun Lijun said: "We hope to end all activities around the 22nd, so that everything can be shipped before the end of the year."

To ship ahead of the courier rush, Xiachufang, a recipe community turned e-commerce company, started its New Year goods fair on January 8, and nearly all merchants on its platform promised to finish shipping by the 22nd.

We randomly interviewed several couriers who came to deliver packages to QDaily's Beijing office. "If you want to send something, do it in the next couple of days," an SF Express courier told us, adding that delivery times cannot be guaranteed during the Spring Festival. A ZTO courier said colleagues there had already started leaving for the holiday one after another.

For merchants that rely on third-party logistics, couriers going home for the New Year are the biggest limit on Spring Festival sales. Many Taobao shops put up notices after mid-January saying "Couriers on holiday, shipping suspended." But e-commerce companies with their own delivery teams, such as JD.com, Amazon, and Suning, make staying "open through the holiday" a selling point of their festivals.

Cainiao Network, which has brought together dozens of warehousing and courier companies including Rishunshun, Wanxiang, and Xinyi, plans to deliver during the Spring Festival in more than 90 cities nationwide, though mainly for goods such as Tmall Supermarket items, large appliances, phones, and clothing.

During the Spring Festival, JD.com keeps delivering in 90 key cities and 139 "JD Bang" counties, expected to cover more than 80% of its users.

"Judging by past sales, there is a peak before the Spring Festival, and the Little New Year (the 23rd day of the last lunar month) is the highest point. During the Spring Festival itself, everyone is visiting relatives and friends, and sales drop," Xiong Qingyun said, introducing JD.com's "Buy Anytime" program for the holiday. "Consumers can buy whenever they want, even during the Spring Festival, and in the long run that will change their habits."

Amazon's New Year goods fair ends on January 31. As in past years, Amazon uses its data to forecast and stock inventory for each category and each product, and to arrange delivery and production capacity, so it can handle the strain on delivery over the holiday.

During the Spring Festival, Amazon offers no-day-off service in 20 cities including Beijing, Guangzhou, Shanghai, and Shenzhen, and at delivery peaks it will extend delivery hours to 11 p.m., depending on order volume.

Suning.com also offers a "logistics never closes" service. To promote it, Suning recruited a group of international students at universities in cities with heavy online shopping, such as Beijing, Shanghai, and Guangzhou. After training in New Year greeting etiquette and the like, they start delivering packages.

This Bustle Doesn't Belong Only to E-Commerce

Buying New Year goods is not a need that arrived with e-commerce. On the contrary, the New Year goods festivals e-commerce invented simply carry online people's habit of visiting malls and markets around the Spring Festival. Department stores, shopping centers, and brand retail stores have nearly all launched discount promotions, chasing the same once-a-year New Year goods business.

Convenience stores, which roll out seasonal products for every holiday, did not miss the Spring Festival of the Year of the Monkey either. FamilyMart launched a service taking orders for semi-prepared bird's nest and abalone delivered to the door, as well as Spring Festival-themed "Good Start" bento boxes. Since mid-January, walk into a 7-Eleven in Beijing and the clerk will recommend New Year pastry gift boxes at the checkout.

In a broader sense, the Year of the Monkey products that brands released for the Spring Festival also count as New Year goods. They range from McDonald's and KFC toys to Nike's much-mocked limited-edition running shoes themed on traditional New Year paintings, and gold-trimmed Beats headphones designed for the Year of the Monkey, which even ran ads on WeChat Moments.

Starting January 7, Apple switched the gift wrapping for purchases from its online Apple Store to red. Apple Watch also launched two special editions for the Chinese Spring Festival: 38 mm and 42 mm gold aluminum and silver aluminum cases with red sport bands.

Apple Watch Spring Festival edition

The two products are on sale only during the Spring Festival, in mainland China, Hong Kong, Taiwan, Singapore, and Malaysia. The gold Apple Watch has been out for a while, and the red band made with (RED) has long been sold in Apple stores. But this is the first time red and gold have been paired, and the pairing is clearly aimed at Spring Festival gift-giving.

In short, online or offline, retailers and e-commerce companies together create a cheerful, festive atmosphere in which almost anything on sale can be tied to New Year goods. More important, almost everyone gets swept into this spending frenzy. Some people may still stand on the sidelines at Christmas or on Double 11, but the New Year pulls far harder.

After all, "it's the New Year": the most frenzied spending season of the year has arrived.

Cover images from Flickr, Wikipedia, Globalsherpa