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Are brands still able to capitalize on Chinese New Year?
The year of the snake shows adverse results
Fashion
January 24th, 2025
January 24th, 2025
On January 29, the Year of the Dragon will come to an end, and according to the lunar calendar, the Year of the Snake will begin. As one of the most significant celebrations in China, Lunar New Year represents a crucial opportunity for the luxury market to boost sales through dedicated capsule collections and targeted marketing strategies. This New Year is no exception, even though in 2024 luxury sales in the country faced challenges due to various factors: from the phenomenon of luxury shame to measures implemented by the Beijing government against displays of wealth by prominent influencers, some of whose accounts were banned on national social media platforms for having a negative influence on national culture; as well as the country's economic slowdown caused by a real estate crisis that led to low consumer confidence. In such a scenario, brands recorded very low revenues in China, especially Kering, which reported losses of over 15% in the third quarter. Nonetheless, Lunar New Year remains one of the most important shopping periods in China: according to the Global Times, the 2024 festival saw online retail sales soar to nearly 800 billion RMB (approximately $112.4 billion) by February 17, an increase of almost 9% compared to the previous year. Meanwhile, during the recent Mid-Autumn Festival, despite brands' efforts to appeal to VICs—such as Armani's traditional tea sets or Fendi's designer lanterns—sales did not recover, and the country no longer supported the exponential growth of luxury brands as it had in the past. Despite the numerous warning signs, fashion houses continue to invest heavily in campaigns dedicated to the new lunar year, hoping to energize the market and capture at least a portion of ultra-wealthy consumers who could drive spending during the celebrations. But is this seduction truly effective?
Feeling deeply cherished by Burberry once again as I take part in the 2025 Lunar New Year collection campaign. Embracing the spirit of renewal and togetherness with Burberry, I’m ready to welcome a new chapter filled with infinite possibilities in the upcoming Year of the Snake. pic.twitter.com/h0XAuUPVx2
— ؘ (@zzhangjingyi) December 2, 2024
The year 2025 presents a markedly different scenario for Lunar New Year sales. In a post-COVID world, China has been heavily affected by low international tourist numbers, prompting the central government to recently expand the list of visa-free countries to boost tourism. According to the South China Morning Post, bookings for Lunar New Year weekend have increased by 200%, with an impressive 452% surge from South Korean tourists. However, Hong Kong’s retail sector has already shown signs of slowing. Retail sales in November declined by 7.3%, marking the ninth consecutive month of decline, with total revenues of 31.7 billion HKD ($4 billion). Furthermore, the Hong Kong Retail Management Association revealed that nearly 60% of businesses anticipate further declines compared to last year, due to more cautious spending habits by both residents and mainland Chinese tourists, who often prefer shorter stays. Yet, it is not solely a tourism issue: according to DaoInsight, one of the challenges for Year of the Snake sales is the presence of a zodiac animal that is more challenging to market. As Yimin Wang notes, much like in the West, the snake in China often carries negative connotations. For this reason, many brands this year have opted to focus on tradition rather than the snake's symbolism itself. However, it is worth noting that, according to analysts like Makoto Li, Chinese consumers do not place much emphasis on the zodiac animal of the year, as demonstrated by the continued success of Bulgari's Serpenti collection, which once again launched snake-inspired products this year, reaffirming that well-executed luxury design transcends any negative connotations.
In an effort to stand out, many brands have chosen to focus on folklore and craftsmanship, abandoning the traditional approach to merchandising. As highlighted by JingDaily, product differentiation is increasingly essential, particularly in China’s highly competitive luxury market. However, many consumers view the cultural rebranding efforts of fashion houses as hollow exercises in style, especially given the growing disinterest in the West. Last year, as noted by the Global Times, consumer habits during the Spring Festival demonstrated a clear preference for goods and services reflecting traditional Chinese culture. For instance, wearing Hanfu—the traditional clothing of the Han ethnicity—to celebrate Lunar New Year was a significant trend, while on some e-commerce platforms, searches for terms like "New Chinese Style" and "Song Brocade" (a traditional silk craft) increased by 683% and 2,058%, respectively, between January and February. Millennials and Gen Z, in particular, are showing a growing sense of national identity and a preference for products defined as "China-Chic", such as traditional clothing, accessories, and gift boxes, fueling a new wave of consumption tied to local culture. Speaking with Makoto Li, the journalist revealed that premium brands in the "New Chinese Style" category—like Labelhood—continue to break daily sales records, even outperforming leading international brands like Lemaire. An emblematic example is Uma Wang, who collaborated with Labelhood on a Lunar New Year capsule collection, quickly selling out qipao priced at nearly 10,000 RMB. Strengthening their "reverse marketing" strategy, Labelhood hosted a Lunar New Year pop-up at Harrods for the third consecutive year, achieving remarkable success: all items, most of which were made in China, sold out. With this new wave of cultural nationalism, many brands have had to adapt, particularly in anticipation of the new year's festivities. Among the main considerations, Li emphasized that "perhaps Chinese consumers are no longer enamored with international brands and are now more inclined to invest in domestic ones."
Among the various campaigns dedicated to the Year of the Snake, some brands have taken a more thoughtful approach than in previous years, including tributes to Chinese craftsmanship. Loewe, for example, after celebrating monochromatic ceramics and jade in recent years, delved into the cloisonné technique (also known as Jingtai Blue in China), collaborating with master Xiong Songtao to create pendants featuring the snake, monkey, and auspicious clouds. Similarly, Burberry, leveraging its global ambassador Zhang Jingyi (one of the most prominent actresses of the moment), managed to attract positive traction on social media, with the hashtag "Burberry 2025 CNY collection" garnering over 18 million views on Weibo, as reported by JingDaily. Not all brands, however, received positive receptions on Chinese social platforms. Discussions on Xiao Hong Shu and Weibo emphasized that these limited-edition launches often feel redundant, especially at a time when there is a need for authentic initiatives that are culturally mature and designed for an audience that is now accustomed to (if not oversaturated with) marketing and thus more skeptical. DaoInsight mentions Ami and Tiffany’s as examples of brands with “low-effort” campaigns, given their minimal integration of snake motifs into their collections. Undoubtedly, there is a sense of "product saturation": a simple detail featuring the zodiac animal of the year is no longer enough to win over consumers willing to make significant investments. As fashion curator Pooky Lee told WWD, "Borrowing well-known folklore about snakes can create resonance and communication, but it must support the brand’s positioning and merchandising strategy to truly work."
Just like in courtship, too much can be counterproductive, and third-quarter data is telling: LVMH and Kering are on a downward trend, Hermès and Chanel are holding steady, and the Prada Group is miraculously reporting growth, even though the luxury market seems to be turning into a barren desert. It is evident that brands are trying to capitalize on every opportunity to drive sales, but the lukewarm reception from consumers makes it necessary to rethink their strategies. As Lisa Nan, editor of JingDaily, highlights, the key lies in balancing traditional elements with an innovative approach, avoiding tired clichés. After all, Lunar New Year, with its symbolism of luck and family, remains a central moment for Chinese consumers, who prefer jewelry and accessories tied to the zodiac sign of the year. For those who authentically incorporate these references without falling into banality, success still seems assured. However, despite brands continuing to invest resources and energy into celebrating the new lunar year, in China—as Makoto Li noted—young people’s interest in the Spring Festival continues to wane over time. Li argues that there is a fundamental gap in Western understanding of the Chinese holiday, highlighting a lack of cultural competence among luxury fashion houses. Perhaps, in such a delicate period for the luxury market, it is time to rethink priorities and explore new forms of engagement, going beyond traditional New Year capsules. After all, if the attraction isn’t there, maybe it’s time to change the relationship. This seems to be the case in fashion as well, where several signals suggest a renewed focus on the U.S. clientele, especially with Donald Trump’s new term as president. Will the next capsules flooding our feeds be dedicated to July 4th?
