The Surprising Effect Chinese New Year Has On Business

Posted by: Xplor, Inc. on Friday, February 8, 2019


This year, February 5th marked the beginning of the Chinese New Year. Unlike the New Year’s Day celebrated on January 1st, this is the most important holiday in Chinese culture and the official holiday lasts for a week. Unofficially though…the holiday has lasting effects for over a month. For businesses in the promotions and event industry (such as Xplor, Inc.), this is a big deal! Getting ready for the Chinese New Year means planning months in advance, and even then, sometimes having to come up with quick solutions at the last minute. How can a single holiday affect our business so much? Read on to find out!

To understand how Chinese New Year brings the promotions industry to a screeching halt, first we need to dive into what this holiday is all about. Chinese New Year, also known as Lunar New Year or Spring Festival, is based on a traditional Chinese lunisolar calendar (phases of the moon and time of the solar year). The most important part of this celebration is to dedicate time for family reunion. People often visit relatives and friends, do some shopping, watch traditional Chinese New Year events, launch fireworks, and plan for the coming year.

Before the official start of the holiday on New Year’s Eve, many people begin to prepare their homes for visitors or start their journey to visit family members. Some business, factories, and other places of work begin to shut down in advance of the first day of the holiday. The official public holiday lasts for seven days, during which lion dances and performing troupes are commonly seen in public places in some part of China. Other possible sights include operas and dragon dances, which are similar to lion dances but with distinct dragon costumes instead.

However, even after the end of the public holiday, most people continue to observe the occasion for another eight days or longer. This is partially because on the fifteenth day, the Yuan Xiao festival, or the Lantern Festival, takes place. However, because hundreds of millions of people have traveled back to their hometowns, which can be a long and arduous journey, they are slow to return to regular life.

So what does this mean for businesses in the rest of the world? We all know the familiar phrase, “Made in China.” According to The Economist, China’s share of global manufacturing output by value is nearly 25%. Combining China with Southeast Asia, you get 50% of the world’s goods being made in that region. So a nationwide shut down on a production, for up to a month, is a really big deal! Here’s a breakdown of what happens:

  • In December, manufacturers begin taking final orders. There is no guarantee that the products will ship before the New Year begins.
  • A week or two before the New Year, suppliers start to wind down operations.
  • Quality during this time can suffer as suppliers rush to complete orders.
  • Payments must be made prior to the first day of the holiday, as all financial institutions will be closed for the full seven days of the public holiday. However, it is important to not put down a deposit for goods to be filled after the New Year, as some companies having financial difficulties shut down for good over this time.
  • When the New Year starts, all production comes to a halt. All factories and businesses are closed, without exception. Workers begin to head for their hometowns, if they have not already.
  • Once the seven-day public holiday is over, many business and factories remain closed. Workers have not yet returned, and many employees simply do not ever show up again even once their workplace is officially open.
  • Once businesses are finally open, employers need to hire and train new employees to replace those that did not return after the holiday. Quality can suffer during this time due to a rush to begin filling orders and an understaffed/untrained workforce.
  • Once orders are filled, bottlenecks can occur in the shipping and logistics area, as everyone is beginning to send out their goods at the same time.
  • After a few weeks, everything gets back to normal!


So what does this mean for Xplor, Inc.? While we are primary an events company, promotions have always been and still are a large component of our business. For every event we host, we love to include swag bags and giveaway items to help make the experience more memorable. Our suppliers in China by far have the best variety of products for the best prices, and we rely on our partners to help make every event special.

Due to our years of experience in the promotions industry, we are aware of how the Chinese New Year affects production and plan carefully for this disruption every year. But not everything can be planned! Last minute trips, a great new swag bag idea, an urgent marketing promotion—there are lots of reasons that we might need promotional items during this time. That’s why working with the experts at Xplor, Inc. is so important! For all of our clients who have needed promotional items during this time, we’ve handled any issues that have come up, every step of the way. Because we have a vast network of contacts and years of industry experience, we are able to provide solutions and get the job done in a fraction of the time it would have taken our clients to do it on their own!

Not everything is about business of course. The Chinese New Year is an important and treasured holiday in Chinese culture. The Xplor, Inc. team sends best wishes for a Happy New Year to everyone who celebrates this fascinating holiday!


There are no comments posted. Submit your comments below.

Leave a Comment

Scroll Down