Published December 20, 2022
How does Chinese New Year affect shipping and the promotional products industry?
To better understand the effect of Chinese New Year on the manufacturing of promotional items, it is important to look at the various factors that come into play.
Chinese New Year is a time of celebration, joy and festivity; however it also brings a unique challenge to the promotional products industry. The manufacturing of promotional products slows down during this festive period due to a variety of reasons, including the government’s labour laws and the traditional customs that are observed by the Chinese.
This can have a significant effect on the production of promotional items, from mugs to keychains, which can have an impact on businesses who rely on them for marketing purposes. To better understand the effect of Chinese New Year on the manufacturing of promotional items, it is important to look at the various factors that come into play.
Overview of Chinese New Year
Chinese New Year is a major Chinese festival that marks the beginning of the year according to the Chinese zodiac. The next Chinese New Year festival, beginning January 22, 2023, marks the beginning of the Year of the Rabbit in the Chinese zodiac.
Since the Chinese calendar is lunisolar, the Chinese New Year occurs on the new moon that marks the start of the lunar new year season, which may fall in January or February in the Gregorian calendar.
Chinese New Year is a time for family reunions and gift giving, a festive season that is celebrated in many countries. It is also a major holiday in countries such as China, Hong Kong, Macau, Taiwan, Singapore, Malaysia, Thailand, and the Philippines.
It has also become a popular occasion for cultural and tourist activities in other parts of the world. In fact, in 2022, the Chinese tourism industry generated nearly 290 billion yuan during its celebration.
Suppliers and distributors attend the promotional product industry's largest event, PPAI. Photo credit: PPAI.
Overview of promotional products industry
The promotional products industry is a multibillion-dollar industry, with many businesses relying on promotional items for marketing purposes. In 2021 alone, the promotional products industry’s annual sales were estimated at 21.2 billion US dollars.
These products are used to build brand awareness, establish an identity and create a connection with customers. Promotional products are manufactured by companies that specialize in designing, customizing and sourcing these products.
Promotional products include a variety of items such as pens, custom socks, t-shirts, mugs, water bottles, calendars, bags, keychains, magnets, clocks, puzzles and more. These items are distributed to various businesses, organizations and individuals for the purpose of advertising.
Impact of Chinese New Year on promotional products industry
Chinese New Year is a time for celebration, followed by a festival and customary rituals. This is a traditional time for Chinese people to visit family members, wish each other well and give gifts.
Since Chinese New Year is celebrated between late January and early February each year, it is also a peak season for manufacturing. This is due to the Chinese workforce, which comprises a large percentage of the country’s population.
As of June 2020, China had the world’s largest manufacturing workforce with over 112 million workers. Chinese New Year is a paid holiday and Chinese workers are not allowed to work during this time. Chinese New Year makes a significant impact on the production of promotional items since many of the workers who produce them are Chinese.
Government regulations and their effects
The government of China has a set of labor laws that regulate the manufacturing that takes place in the country. This includes the manufacturing of promotional items and other products that are exported to various countries around the world.
During Chinese New Year, these labor laws are strictly enforced, as most Chinese workers are given a holiday. There are limitations to the number of hours a worker can work, which means that production slows down.
There are also restrictions on the number of hours worked during a single shift. Many of the manufacturers who produce promotional products for export use Chinese labor for production.
This means that during Chinese New Year, the production of promotional products slows down. This can have a significant effect on businesses who rely on these products for marketing purposes.
Traditional customs and their effects
As Chinese New Year is a time for celebration and festivity, many traditional customs are observed. One of these customs is the giving of red gifts, which is associated with good fortune and luck.
As such, many manufacturers of promotional items produce red items during this time. This increases the supply of red items, which can lead to a drop in prices and a reduced profit margin for businesses that rely on these items for marketing purposes.
Another custom observed during Chinese New Year is the gifting of money, which is given on the first day of the Chinese New Year, known as New Year’s Day. This custom is observed by both employers and employees. As a result, there is a higher demand for paper money during Chinese New Year.
What effect does Chinese New Year have on shipping?
The Chinese New Year is a major holiday for Chinese culture, but it can also have an effect on shipping for those who do business overseas, since 28.4% of all manufacturing happens on Chinese soil as of 2022.
During this period, many factories and suppliers close their doors for a few weeks, leading to delays in the production and shipping of promotional products or other goods. According to DB Schenker, international freight forwarder, global carrier schedule reliability is down to 34.4% and there is an average delay of vessel arrivals of 7.3 days.
This is due to a few main factors: increased demand on shipping and ports due to front-loading and back-loading by companies who depend on Chinese-made products to ship during the shutdowns, recent shipping container shortages, and a shortage of truck drivers and port workers returning to the work after the Chinese New Year celebration.
Some companies may also charge higher shipping fees during this time due to the high demand. It's important to plan ahead and be aware of the potential delays before you start working with overseas suppliers.
Make sure to give yourself enough time to get your orders in before the holiday and understand that the holiday may cause a few extra days of shipping time. That way, you can avoid any unexpected delays or extra costs.
The Chinese New Year is an important part of Chinese culture, and it can have an impact on your business. With the right planning and understanding, you can make sure that your promotional products arrive in a timely manner and without any extra costs!
How organizations can be prepared for Chinese New Year
Businesses that rely on the manufacturing of promotional items for marketing purposes during Chinese New Year can take a few steps to prepare for the festive season.
First, businesses can source promotional items from manufacturers who are located outside of China so that they remain unaffected by the labour laws and customs associated with Chinese New Year. There are several comparably-priced options that are made in countries like India, and some quick-ship items that are Made in the USA.
Alternatively, businesses can plan their marketing activities before Chinese New Year to ensure that they have enough promotional items to last them through the festive season.
Chinese New Year is a time of celebration, joy and festivity. However, it also brings a unique challenge to the manufacturing of promotional products, including a slowdown in production due to government regulations and traditional customs. This can have an effect on businesses that rely on these products for marketing purposes.
Organizations can be prepared for Chinese New Year by sourcing promotional items from manufacturers outside of China or by planning their marketing activities beforehand.
Read more about alternatives to Chinese production of promotional goods in our blogs Why Companies are Sourcing Swag from USA Sock Manufacturers and Why Choose Made in USA Custom Sock Manufacturers.