Last week marked the Lunar New Year celebrations and the ushering in of the year of the Tiger. With each new year comes a new meaning and new beginnings, a timely message as the world continues to recover from the pandemic and usher in a new normal.
So what might this look like for Southeast Asia’s payments sector?
Off to a fierce start
Given the volume of people who celebrate Lunar New Year (LNY) worldwide, it’s no surprise that sales figures beat the Christmas holiday season.
For comparison, in the five days from Thanksgiving to Cyber Monday last year, online sales in the US were projected to total about US$39 billion. In 2021, Chinese retail sales during the Lunar New Year totalled over US$129 billion.
This is a massive opportunity for retailers to drive sales and win new customers for the rest of the year.
Sellers keen to seize this opportunity often get creative with Lunar New Year sales and auspicious discounts featuring the number 8, the luckiest number in China, driving shoppers to purchase and transform retailers fortunes for the year ahead.
But once the discounts have ended and the celebrations are over, the question all sellers will be asking is: what will consumers be spending their hard-earned money on?
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Consumer behaviour during LNY
The tradition of giving hongbao (auspicious red packet) to wish prosperity and good fortune to the recipient was revolutionised in 2014 with the invention of digital e-hongbao, which became famous when WeChat allowed users to send virtual red envelopes of money to their contacts.
Now, seven years later, about 80 per cent of survey respondents say they prefer to send digital e-hongbao to physical envelopes.
This soar in popularity was well-timed. In the past, LNY has prompted vast masses of people working away from their hometowns to travel back to celebrate. The world’s largest annual migration means that as many as three billion trips would be made each year across China.
But the pandemic and national lockdowns changed things dramatically in 2020, 2021 and for many this year, too, with restrictions in Southeast Asia.
However, for those who could make it home to celebrate, festivities centred around gathering with family and friends to eat were plentiful. In fact, according to a survey ahead of LNY last year, around 77 per cent of Chinese respondents said they planned on buying food for the 2021 holiday.
About half of the respondents decided to buy alcohol or wine. Beyond this, many choose to give a gift with e-commerce supporting those who are still social distancing. According to Alibaba’s Spring Festival Consumption Report 2021, tech products such as sweeping and window cleaning robots exceeded 300 per cent YoY.
Customising payments is the key to cashing in
Research conducted in 2018 in China, India and Indonesia asked consumers to identify the main obstacles which prevented them from using online services to their fullest extent.
The number one obstacle, singled out by 76 per cent of correspondents, was language, and even today, lack of language localisation continues to be an issue across digital platforms.
But localisation can’t stop at language localisation alone. According to PPRO’s research, most consumers will abandon a transaction if they reach the checkout and cannot pay with their preferred payment method.
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To ensure maximum consumer acceptance and the best possible conversion rates, merchants must ensure that their site offers a range of familiar and trusted local payment methods. And with so many local payment methods in APAC and new ones emerging every day, this couldn’t be more true.
To serve today’s Chinese consumers, at a minimum, it is best practice to accept all three of the most popular Chinese payment methods: UnionPay, Alipay, and WeChat Pay.
LNY celebrations may be coming to an end for another year. Still, to realise roaring success in the year of the Tiger, merchants must think local first and tailor their payment offering to their customers, wherever they may be.
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Image Credit: toa55
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