Shopping malls look to cash in on Lunar New Year

Published: Sunday, Feb. 9, 2014 - 12:00 am
Last Modified: Sunday, Feb. 16, 2014 - 8:52 am

Shopping malls across California are eagerly greeting the Lunar New Year, holding sales and other events to mark the landmark Asian holiday that once passed unnoticed by major retailers.

From Los Angeles to Sacramento, retailers and mall operators are hoisting paper lanterns, passing out red envelopes and organizing lion dances to ring in the Year of the Horse. The festivities are a calculated move to generate sales and foot traffic during the typical post-Christmas lull. But the trend is also driven by the state’s changing demographics and the rising influence of China.

“Everybody has one Christmas, but we have two,” said Sean Ilami, sales manager at CH Premier Jewelers inside Westfield Valley Fair, here in the heart of Silicon Valley.

Business for the Lunar New Year holiday, which began Jan. 31, is up at least 20 percent compared with a regular week, according to management. The holiday is celebrated for about a week, but customs vary by culture.

“After they get cash from red envelopes, they spend it,” Ilami said. “It’s an excuse to buy something new.”

Stuffed with money, red envelopes are commonly presented to family members – especially children and the elderly – during the new year and other significant life events.

Asian consumers, whether they’re tourists from out of the country or living in the United States, often splurge on luxury goods. Newly affluent Chinese are flocking overseas to shop because of heavy tariffs levied on Western brands at home. Couple that with Asian American residents of the Bay Area, many of whom command six-figure salaries in the booming high-tech industry, and it makes for a market that is irresistible to retailers.

“Knowing our demographics, celebrating the holiday makes sense,” said Matt Ehrie, district vice president at Westfield, echoing the sentiment of other mall owners in the state.

Valley Fair officials have decked out the mall with red lanterns and large signs reading “Celebrate the Lunar New Year,” complete with a horse and the Chinese character for happiness, “ xi.” A fashion show and lion dance was held Feb. 1. But a more elaborate celebration, featuring traditional dancers and music, was planned Saturday for the mall’s luxury wing that includes European fashion icons Louis Vuitton and Burberry.

About a third of the nearly 2 million people living in Santa Clara County are Asian, according to the 2010 U.S. Census. In Cupertino and Milpitas, Asians command majorities of 63.3 percent and 62.2 percent, respectively. Statewide, Asians make up 13.9 percent of the population, compared with 5.1 percent nationally. Sacramento has 85,503 Asians, which represents 17.8 percent of the population.

The Chinese affinity for luxury goods reflects history, when the Middle Kingdom was semi-colonized by the West during the late 19th and early 20th centuries, said Beverly Bossler, professor of Chinese history at the University of California, Davis.

“China had always seen itself as the center of power, but suddenly it found itself threatened,” Bossler said. “That’s why Western brands have so much cachet, because they come from these powerful, modern countries. This won’t change until Chinese products get worldwide recognition.”

More than 700,000 Chinese tourists visited the Golden State in 2012, spending a total of $2.1 billion, according to Visit California, the state’s nonprofit tourism arm. Those figures are expected to rise sharply, with 1.1 million projected visitors by 2015. The Chinese spare no expense, shelling out an average of $3,000 per person on luxury goods, according to an analysis by TaxFree Shopping, a company that processes tax refunds for foreign travelers.

American retailers have “woken up and realized there’s 1.3 billion Chinese people on the planet,” said Ira Kalb, professor of marketing at the University of Southern California and owner of a consulting firm. “There’s a huge market.”

Bloomingdale’s at Westfield San Francisco Centre is hosting a pop-up store with Asian-inspired gifts such as the “Year of the Horse Little Red Bag” for $24. Sales associates have distributed red envelopes containing gift cards in denominations of eight, a lucky number in Asian cultures because it sounds like “generating wealth” in Mandarin. Godiva Chocolatier has also hopped on the bandwagon, crafting fruity chocolates geared toward Asian tastebuds.

In response to this new customer base, malls up and down the coast have gone on a spree of hiring Mandarin-speaking associates. Stores are now accepting UnionPay, the preferred credit card of mainland Chinese guests.

Still, the events are drawing plenty of non-Asians to malls, with many hoping to experience the excitement once found only in Chinatowns. San Francisco Centre, for example, has hired celebrity chef Martin Yan to perform a 10-minute noodle-making demonstration.

Sacramento’s Arden Fair mall held a lion dance for children on Feb. 1, attracting 250 people, said Jamie McDaniels, senior marketing manager. During the hourlong event, children learned how to perform the traditional dance, which is intended to ward off evil spirits.

“With the diversity in Sacramento, we try to organize cultural events that are both educational and entertaining,” McDaniels said.

A limited edition $80 watch with an image of a galloping horse by Swatch has been well received by many non-Asians, according to Andrew Schwafel, manager of the Valley Fair Swatch.

“They see it as a collectible, something unique,” Schwafel said, noting that the store has sold roughly 80 of the watches to date.

“Chinese culture is becoming a big part of American culture. It’s hip and cool to have these Chinese things,” Kalb said.

But history tells a different story. When the Chinese first arrived in California during the Gold Rush of 1849, they were nicknamed “yellow peril” and greeted with hostility. Anti-Chinese sentiment soon reached fever pitch, and the federal government banned immigration altogether, enacting the Chinese Exclusion Act of 1882.

The recognition of the Lunar New Year, 150 years after widespread discrimination, is long overdue, say community leaders.

“I look forward, but I have not forgotten about history,” said Frank Kwong, past president of the Chinese Benevolent Association of Sacramento, one of the original Chinatown organizations established to protect the interests of Chinese Americans.

Shopper Lisa Tan, resting on a sofa at Valley Fair last week, said she was surprised to see the Lunar New Year decorations.

“It’s absolutely awesome to acknowledge the Chinese community here,” said Tan, 26. “We celebrate St. Patrick’s Day, so why not Chinese New Year?”

Ultimately, retailers hope shoppers – whether they’re Asian or not – will open their pocketbooks after they gawk at the cooking demonstrations and lion dances.

“The shopping malls and stores are looking for reasons to create an event and have a sale,” said Kalb, the USC marketing professor. “It started with Black Friday, Cyber Monday and now, Chinese New Year.”

Not everyone is convinced. Jane Hu, who grew up in China but now lives in San Jose, said the holiday is about spending time with family, not shopping – at least for leather handbags.

“It’s a marketing gimmick,” Hu said. “It will work, but just not on me.”

Call The Bee’s Richard Chang at (916) 321-1018. Follow him on Twitter @RichardYChang.

Read more articles by Richard Chang

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