Ushering in the Year of the Rat, Lunar New Year in 2020 marks a day of festivities that is becoming increasingly popular in Australia and New Zealand, which represents both opportunity and hazard for small business owners.
Also known as Chinese New Year, Lunar New Year can have a considerable impact on small business owners.
Recognised as China’s most important holiday, it celebrates the beginning of a new year on the traditional Chinese calendar and is celebrated in many places around the world.
This year, the celebration starts on January 25, which falls on the Australia Day long weekend, while the official holiday lasts a week (January 24-30).
There’s a clear market for small businesses embracing this cultural celebration, with more than one million Australians with Chinese heritage, according to Australian Small Business and Family Enterprise Ombudsman Kate Carnell.
In New Zealand, there’s also a significant population of people with Chinese heritage, numbering in the hundreds of thousands.
“Chinese New Year presents a huge opportunity for small businesses,” said Carnell.
“Tourism Australia figures show that in previous years, more than five million Chinese tourists travelled overseas during the Lunar New Year, and more than 200,000 visited Australia.”
But, many warn that celebrations can last a month, impacting trade.
This is because some businesses close in major Chinese cities – from offices, banks and factories, while millions of workers travelling to celebrate with their families.
There can also be disruptions to normal business activity in other countries, especially those with strong Chinese cultural affiliations throughout Southeast Asia.
One online retailer has capitalised on the Chinese New Year by stocking specific products now purchased during this period, bolstering sales.
Online party store The Party People reports a 15 percent increase in overall sales for products in the Chinese New Year category.
But there is a downside.
“We’re also impacted by China shutting down over that period, with various companies closing for different periods of time, making it a little challenging to source product during this time,” said the business owner Dean Salakas.
The extended shut-down for celebrations can cause havoc for SMEs working with factories in China or other countries where Lunar New Year is widely celebrated.
Clothing wholesaler Exodus Wear, which launched in 2009, manufactures in China.
But it has had to set up a back-up factory in Pakistan as the impact of its Chinese factory shutting down for four weeks is too great, explains founder Elyse Daniels.
“While the official holiday is only for a week, the factories allow workers travel time to and from provinces,” said Daniels.
“The other issue is that many workers decide not to come back after the holidays, so this adds to the lead time.
“We basically have to write off a whole month.”
Scottish Pacific import finance spokesman Craig Michie says it can be a challenging time for importers and exporters, but with preparation, small business owners can minimise disruptions.
SMEs should prepare early in the following ways, Michie says, providing the following tips: