The Chinese New Year (CNY) is like Christmas, New Years
Eve and your own birthday all merged into one major
holiday. It’s the time of the year when the factories shut
their doors and the workers go back to their hometowns to
spend some quality time with their friends and relatives.
They eat, drink and wish each other luck for the year ahead.
Sounds great! However, for importers the Chinese New
Year is not a reason to celebrate. It’s the cause of major
delays, frustration and missed deadlines.
The Chinese New Year is not going anywhere, and those
hard working Chinese workers certainly deserve some time
off. However, with some foresight and planning, delays can
be avoided. That’s what we’ll look into in this weeks blog
post. I begin with an introduction to the three phases –
before, during and after the Chinese New Year.
Phase #1 – Before the Chinese New Year
While the Chinese New Year is still a few weeks away by the
time I’m writing this (it starts on January 31th) the
implications of the coming holiday can be felt months in
advance. Some suppliers stop accepting orders as early as
December, and by the time we’re in January it’s close to
impossible to start production. Certain suppliers are also
going on holiday leave earlier than the official CNY date.
Some suppliers might even be reluctant to participate in a
price research and offer quotations, since they are
expecting price increases from their material and
component subcontractors after the Chinese New Year.
Phase #2 – During the Chinese New Year
Forget about importing anything from China during the
CNY. The store is closed and it’s not a matter of negotiation.
All Chinese factories are empty and no production is
scheduled for the whole duration of the CNY. That’s pretty
much all there is to say about this part.
Phase #3 – After the Chinese New Year
The Chinese New Year wouldn’t be that bad for importers if
the suppliers started producing at full capacity on the
opening day. However, as with anything that involves
Importing from China, the situation is not that simple. Most
suppliers have at least a few orders waiting to enter
production and new orders have to wait until these “pre-
CNY” orders are completed.
Another major headache is the fact that many of the
migrant workers simply don’t return to the factory after the
end of the Chinese New Year. It’s hard to find qualified
personnel for most manufacturers and this is a huge issue
for small manufacturers who rely on a few or even one
head engineer. Hiring and training new workers can take
months. Therefore quality issues tend to be more common
in late February, March, April and May.
How to avoid delays and when to place an
order
For an importer, the Chinese New Year is an event that has
large implications on any purchase made from December to
April. Unfortunately, many small businesses are not aware
of this holiday and place their orders way too late. The
result is that plenty of small businesses miss important
deadlines, something that is disastrous for seasonal
products. Outdoor furniture and bikinis tend to be quite
hard to sell in September.
An order intended for the spring and summer season shall
be placed in November at latest. Keep in mind that “placing
an order” is not the same thing as start sourcing suppliers.
If you’re still at a stage where you must go look for a
supplier for products to sell during the coming spring and
summer season you better begin the sourcing process as
early as July or August. Yes, that’s 6 months before the
beginning of the Chinese New Year!
Scams related to the Chinese New Year
If a supplier is deciding to go out of business, they’ll
probably pack up and leave around the time of the CNY.
While many importers assume that running a factory in
China is a hugely profitable enterprise, this is not really the
case. Most manufacturers are struggling with razor thin
margins and thousands of factories shut their doors every
year. Even more are on the brink of bankruptcy.
A supplier that is about to go bankrupt is dangerous,
because they no longer have a reputation to take into
consideration and are much more likely to scam any
potential buyer that approach them. Especially since many
of them have creditors to pay off. This means that payment
frauds and other scams (i.e. Loading containers with brick
stones rather than the product you ordered) are more
common compared to the rest of the year.
Important dates
Unlike the western New Years Eve, which always occur on
the same dates, the Chinese New Year begins and ends and
various dates in the Gregorian calendar (that’s the one that
starts on January 1st and ends on December 31st). The
earliest possible date is January 21 and the latest possible
date is February 20. Below I list the CNY dates for the
coming ten years:
2014: January 31
2015: February 19
2016: February 8
2017: January 28
2018: February 16
2019: February 5
2020: January 25
2021: February 12
2022: February 1
2023: January 22
Each Chinese year has a zodiac that follows a 12 year cycle.
2014 is the year of the wooden horse. What does this mean
for your company? Absolutely nothing. It’s business as
usual as soon as the dust settles and the production lines
start running.
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nice

Nice Research & update. Thanks for the info

OP, what happens to exchange rates during the holiday?

Exchange rate remains the same..

really good info to know. insight into the inscrutable oriental mind. who knew.... thanks ihedinobi2 for sharing this. bookmarked

trekkie:
really good info to know. insight into the inscrutable oriental mind. who knew.... thanks ihedinobi2 for sharing this. bookmarked

You're welcome, bro. I thought of you when I saw it. And remembered that I have business people following me. I'm glad you find it useful.

Good post. Duration?