CNY: It’s not just for Chinese brands anymore.

(Hong Kong – February 17, 2016) As one of the most important festivals in the Chinese calendar, Chinese New Year (CNY), with its rich cultural connotations of family gatherings and anticipation of a new year, represents a unique opportunity for brands to not only ring up robust retail sales but also build deeper connections with Chinese consumers. The surprise in survey results released by Prophet, a strategic brand and marketing consultancy, is how much more of a branding opportunity, rather than simply a promotional opportunity, CNY actually represents. The holiday’s strong rituals give brands leverage in building long-term loyalty among Chinese consumers across regions.

The results also show that while some Chinese brands do exceptionally well during the holiday, not all do, and in fact some non-Chinese brands are beginning to catch up with the Chinese brand leaders. The poll, carried out last month, surveyed 1,000 consumers across three markets - Mainland China, Hong Kong and Singapore - regarding their attitudes on how brands participate in CNY.

In the poll, mainland respondents indicated that they are more likely to recommend brands to others (59%), try new brands (65%), or buy more from brands (64%) if those brands participate in CNY.

Prophet found the Chinese brands that do well during CNY include consumer package goods, such as Jaoduobao, Xufuji and Want Want, and dairy brands such as Yili and Mengniu. These companies understand the strong traditions associated with CNY - visiting family, gifting, and celebrating with the sharing of food, fully embracing the sentiments of this prolific time of year.

On the contrary, given that nearly everyone wants crisp, new bills at Chinese New Year to give to young newlyweds and amahs, and so visit their favorite bank to make withdrawals, it is interesting that retail banks did not show up as engaging well with customers around CNY. Why do some Chinese brands do well, while others don’t?

“In an era of expanding customer expectations and constant competitive change, brands must continually find ways to engage and delight consumers in order to win. Those that do are what we call ‘relentlessly relevant’, always seeking deeper and steadier connections with their customers,” said Jay Milliken, Senior Partner in Prophet’s Hong Kong office.

In the Prophet survey, 72% of respondents said that it was important for them to be surprised by brands’ CNY promotions. Chinese consumers clearly want to be captivated by brand campaigns.

Haier, for example, catered to consumers’ emotional needs this CNY with a campaign called “Be your parents’ companion during CNY.” Haier partnered with China Railway to decorate train compartments with QR codes. People taking the train home for family reunions could scan the QR code and watch a short video on the meaning of reunion and the unconditional love of parents. Chinese consumers related strongly to the video and were touched by it.

Meanwhile, non-Chinese brands did not miss the opportunity to promote their brands and products during this important holiday. Prophet’s survey shows that 74% of Chinese consumers across all three markets think it is important for non-Chinese brands to communicate authentic, culturally sensitive and traditional messages to Chinese audiences during CNY.

Several non-Chinese brands stood out in this regard, notably Coca-Cola. Why? Because Coca-Cola, one of the highest profile non-Chinese brands in the survey, successfully markets itself in China as being at the center of family reunions and moments of holiday happiness. In fact, non-Chinese brands are often better at building emotional connections with consumers in an authentic way. For example, Unilever’s Lifebuoy soap developed hongbao or red packets, used by family members and friends to give and receive money at Chinese New Year, from its unique anti-bacterial soap paper. The novel New Year’s packets, which can be used to gift money and wash hands, were sent to 270,000 target households in Shanghai. The packets increased Lifebuoy’s brand awareness in the Shanghai market by 17%, or the equivalent of US$830,000 in free impressions.

As non-Chinese brands bring to CNY innovative storytelling that delights and engages Chinese consumers, the message for Chinese brands is that they can no longer get along simply by offering the usual CNY promotions. If they are to successfully compete in their own markets, Chinese brands will need to become more creative.

About Prophet Prophet is a global brand and marketing consultancy that fuses insights, strategy, creativity and imagination to help clients grow better brands and businesses. We uncover deeper customer insights, build stronger brand relevance and deliver engaging customer experiences for some of the world’s most successful companies such as Electrolux, T-Mobile, GE, Keurig Green Mountain, UBS, Gatorade, Cisco, Target, and ThyssenKrupp AG. Our 300+ experts in marketing, innovation, digital and design help companies bridge the gap between strategy and execution to drive real market impact. www.prophet.com For media enquiry, please contact Hamilton Advisors Limited: Robert T. Grieves Mob: +852 9305 1810 Dir: +852 2487 8070

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