Lunar New Year: Australian Business in the Year of the Dragon
With the Lunar New Year in the swing of a fortnight of festivities, travel and gift giving, Australian businesses have a rare opportunity to capitalise on the auspicious new lunar year, the Year of the Dragon.
Leigh Howard, Chief Executive of Asialink Business at the University of Melbourne - and one of Australia’s leading voices on international business, says understanding the major trends, events and cultural practices in the region will prove pivotal for success.
"There’s a lot more opportunity on offer in Asia, and that means there’s a lot more that businesses need to know to be successful. Diversification is a key theme, with Southeast Asian markets clearly being a growing priority for many Australian exporters. China remains an attractive consumer market, and the Lunar New Year period sees a massive spike in consumer spending,” Mr Howard says.
“Businesses that lack understanding and knowledge of the environment, the culture, governance and regulations are setting themselves up for failure,” he adds.
Five things to consider when doing business in the Year of the Dragon:
● Understand cultural drivers and the link to business: Maintaining harmony is crucial in Chinese business culture. Face means a lot to Chinese people; some say it is even more important than money. Maintaining harmony and avoiding conflict is key in working with Chinese counterparts. It is crucial to build relationships first. Remember a relationship is not a one-off thing but an ongoing process that needs to be nurtured. Make sure to reach out and stay connected with business partners – if you’re doing this remotely try WeChat.
● Understand the consumer base: Chinese consumers are drawn to Australian products primarily due to their association with the perception of being clean, organic, safe, and authentic; attributes that have gained the trust of Chinese consumers. Chinese millennials and Gen Z prefer to browse offline in brick-and-mortar stores but proceed to actually purchase those products online. Preferring to “see the real thing” but opting for online simplicity keeps the hybrid, omnichannel shopping experience alive and well in China. Consider cultural elements to your branding or marketing campaigns, Ensure the cultural elements are used in a way that is respectful to Chinese culture, history and people. This is where brands can get it wrong.
● Digital and social marketing landscape: Influencer marketing is an important pillar in digital and social marketing operation for brands and is now being integrated with live streaming. Brands use KOLs and KOCs to better engage with Gen Z, both within China and with overseas Chinese communities. 5G mobile internet technology has underpinned explosive growth of short video content on social media platforms, led by Douyin (the Chinese version of Tik Tok) and Kuaishou. WeChat is also a critical marketing channel. Digital marketing in China is a specialised field, and it is recommended to always speak with professional digital marketing agencies.
● AI bringing new challenges: The potential for generative AI to disrupt industries isn’t new, but its impact, including the way in which Australian businesses interact with the region, emerged as a key theme last year. Businesses have been grappling with the impact and application of these new technologies since ChatGPT brought their potential into the public consciousness at the end of 2022. Supply chain resilience, climate change and sustainability also remain front of mind for many businesses engaging with our region.
● Think long-term: Businesses need to do their homework and market research. It is essential to have a dynamic go-to market strategy in place before talking to stakeholders.
A dynamic strategy will have the ability to pivot as consumer preferences and the ecosystem shifts. China does not stand still and neither can your strategy.
For businesses an online model should be considered a short-term approach with General Trade being the long-term goal. Businesses need to consider the strength of their value proposition, the strength of the brand itself, and the necessary resources and commitment for a long-term business strategy.
Beyond the new year, a focal point of 2024 will be the major elections taking place in Asia, says Howard.
“Indonesia will be the first major Asian democracy to head to the polls on Valentine’s Day, followed by voting for South Korea’s parliament in April and Indian general elections by mid-year.”
“In contrast to other parts of the world, these elections are anticipated to deliver political continuity, allowing businesses to reaffirm their long-term commitment to the region.”
“Coupled with economic instabilities witnessed in China last year, Australian businesses are vigilantly watching opportunities in these markets,” he adds.
Since 2013, Asialink Business has helped thousands of Australian organisations and professionals seize opportunities in Asia.
As Australia’s National Centre for Asia Capability, we equip leaders, entrepreneurs and employees with the insights, capabilities and connections to succeed across Asia. Asialink Business offers commercially focused solutions. We enable organisations to optimise their business with Asia by providing customised country, market and industry-specific support.
Asialink Business is supported by the Department of Industry, Science and Resources. It is part of the Asialink Group hosted by the University of Melbourne.
To find out more visit www.asialinkbusiness.com.au
