TOKYO/MUMBAI/JAKARTA -- Due to its cultural and religious diversity, Asia has many major holiday and festival seasons. And as the region's incomes rise, so too does its holiday spending, creating a wealth of opportunities for businesses.
The Lunar New Year, celebrated in countries like China and Vietnam, is not the only important holiday season in Asia. Indonesia has Ramadan, while India celebrates a major Hindu festival in autumn. These holidays and festivals are often the biggest shopping seasons in the countries where they are celebrated.
Stocked and ready
In China, the biggest shopping sprees come around the time of the spring festival, which encompasses the Lunar New Year, and the National Day holidays.
On Feb. 14, four days before this year's spring festival began, Shanjing Outlet Plaza in Ningbo, Zhejiang Province, was thronged with shoppers carrying large bags. A 29-year-old man was visiting the massive shopping complex with his wife and daughter to buy clothes for the New Year holidays. He said his budget was 5,000 yuan ($800).
Many Chinese buy new clothes, along with food and other goods, as presents for their relatives before going home during the New Year holidays.
Some 20,000 shoppers visited Shanjing Outlet Plaza on that Saturday, twice as many as on an ordinary weekend. Total sales for the day came to nearly 200 million yen ($1.66 million), on a par with the record logged just before last year's National Day.
The Tommy Hilfiger store increased its stock to 7,000 items before the spring festival, up 1,000 from a year earlier. Sweaters priced at nearly $170 have been selling well, according to the U.S. clothier.
Mitsui Fudosan, which operates the plaza with apparel maker Shanshan Group and other local partners, learned a bitter lesson during the previous New Year shopping season. Some 20 stores at the complex experienced inventory shortages due to the unexpectedly large number of shoppers.
This year, rather than leave the matter up to individual stores, the Japanese real estate company took charge of inventory management. Through talks with head offices of the shops, the company has ensured that inventory levels have increased by an average 30%.
Vietnam also celebrates the Lunar New Year, locally called Tet. Consumers there tend to ramp up their spending on big-ticket items, such as home repairs and new cars, before the holiday season. Vietnam imported some 10,000 vehicles in January, up 220% on the year, as car dealerships stocked up prior to the shopping season. Toyota Motor sold a record 4,262 cars there in January.
Vietnamese shoppers also tend to buy more high-priced products in bulk than usual. In expectations of a spike in sales during the period, Sapporo Breweries doubled production at its local plant in December from the level in September. As beer consumption at restaurants also increases, the Japanese brewer has been operating the plant on weekends and producing beer products for business customers on three shifts on weekdays since the beginning of February.
Most shops in Vietnam are closed for several days starting on New Year's day. The country's first Aeon Mall, which opened last year in Ho Chi Minh City, has remained opened to cater to holiday shoppers, a decision that did not sit well with its local employees.
Yasuo Nishitoge, general director of Aeon Vietnam, said the number of Vietnamese who shop and watch movies during the New Year holidays has increased as their lifestyles have become more diversified. Sales during the Tet holidays are 50% larger than at other times of the year.
To make sure the mall stays open during this period, Aeon is paying employees a special bonus equivalent to three times their daily wage.
India's largest shopping season is the autumn Diwali Hindu festival. It is believed that buying high-priced items during the five-day festival brings good luck. Sales of jewelry and cars pick up during the festival.
Last October, Hero MotoCorp, a major motorbike maker, launched a special Diwali version of its flagship Splendor bike.
Flipkart, India's leading online retailer, offered special discounts for the festival season last year. It sold more than 2 million discounted items, including TVs and cellphones, racking up daily sales of over $100 million.
In countries with a large Muslim population, like Indonesia and Malaysia, Ramadan, a one-month period of fasting during the hours of daylight, and Eid al-Fitr, when Muslims celebrate the end of fasting, constitute the biggest shopping season.
The festival is called Lebaran in Indonesia, and retailers there roll out special sales campaigns.
This year, Lebaran falls on July 17 and 18. After fasting during the day, families members get together for lavish dinners during Ramadan, a custom that creates a rise in food sales.
In the days leading up to Lebaran, Indonesian consumers start buying new clothes and motorbikes to return home.
Consumer spending in Asia will hit $16 trillion in 2020, up 60% from 2014, according to a forecast by Euromonitor International, a U.K. research firm. That will be bigger than the figure for the U.S. or Europe. The number of Asian middle-class consumers, the main engine of growth in consumer spending, will grow to 2 billion. Combined with the wealthier consumers, nearly 70% of Asia's population will have considerable purchasing power.
In the coming years, Asia will transform itself from a global production center supported by cheap labor into the world's largest consumer market. It is a change no competent CEO can afford to ignore.