Chinese Spring Festival, which kicks off the Chinese New Year, is the most important festival in China. Every year it celebrates one of the twelve animals of the zodiac. This year, we had the pleasure of experiencing firsthand the Chinese New Year and its many traditions. 2019 is the year of the Pig. The holiday is not only an important cultural event, but also impacts doing business across the country.
The holiday stems an ancient Chinese fable about a monster defeated by a god disguised as an old man. The monster, whose name is Nian, dislikes the color red and loud noises, which is why many of the traditions associated with Chinese New Year involve scarlet decorations and fireworks. The literal translation for New Year’s or Guo Nian is “pass over Nian” or “overcome Nian”. Today, the Chinese New Year is a family holiday, and one tradition is to give red packets of lucky money to children. In today’s digital age, you can now send red packets to friends on WeChat.
Chinese New Year is such an important holiday that it impacts how businesses are run across China. During the weeks leading up to the holiday, stores will close, and people will migrate to their home cities to visit family. As we learned in our Global Supply Chain Management class at Lingnan, this means that the manufacturing production in February is lower than any other month as manufacturing shut down for the holiday. Orders are taken in advance since most production stops during the week leading up to the holiday and during the week-long holiday itself. The order quantities depend on the use of forecasting tools, similar to what we learned back in the fall in our Analysis and Decision Making in a Global Context class.
However, China also has its highest sales in February. Businesses use the zodiac animal as a promotional tool and you see the pig celebrated in stores, offices, restaurants, and even on campus. Sometimes the ads backfire though. For example, in our Consumer Behavior Across the Global class we discussed an ad that ran during the 2008 Olympics where the zodiac animal that year was repeated three times (“rat, rat, rat”) and then the company name. Consumers found the ad so annoying that the company eventually went out of business.
We are so glad to be able to celebrate the Chinese New Year and learn more about this important cultural tradition. It has also been interesting to see how the holiday impacts Chinese businesses and consumer behavior.