The holidays have looked different during Covid-19, with smaller parties and less spending than in years past. From Muslims observing Eid and Americans celebrating Thanksgiving, to millions of people around the world marking Hanukkah and Christmas, everyone has had to adapt. Lunar New Year, running from February 11-26, will be the next major event affected by the pandemic.Celebrated widely in China, Korea, Vietnam, Singapore and many other Asian countries, Lunar New Year begins on the first new moon of the lunar calendar and ends on the first full moon of the lunar calendar. In the past, the event has been marked by an international travel boom, with the long public holiday allowing many people to go overseas. But with Covid-19 case numbers higher than ever and many countries continuing to restrict international travel, that is unlikely to be the case this year. Queensland University of Technology marketing professor Gary Mortimer has predicted a $1.4 billion decline in Lunar New Year-related spending in Australia alone due to the absence of short-term visitors from China. According to Statista, China recorded 169.2 million outbound journeys in 2019, up from 47.6 million in 2009. And with each traveller spending more than 12,000 yuan (approximately A$2400) on average on a single trip, and high-end travellers spending even more, luxury retailers in markets such as Australia, Europe, the US and UK are expected to be among the hardest hit by the lack of Lunar New Year travel this year. The power of Chinese shoppers“The impact is huge,” said Steven Altman, a luxury retail expert and the founder of Inspiring-i, a boutique market research consultancy based in Hong Kong.According to Altman, luxury retailers generate up to 30 per cent of their revenue from consumers outside their country of residence, and Chinese tourists account for a significant portion of this. Depending on the report, between a quarter to a third of all luxury sales are currently attributed to Chinese consumers, and management consultancy company Bain expects Chinese consumers to account for half of all luxury spending by 2025. Unable to shop in overseas luxury stores, this key demographic has started spending at home. Phil Wiggenraad, a retail analyst based in Hong Kong, noted that China was the only luxury market that grew in 2020. “The global luxury market contracted over 2020 due to the pandemic, but actually, China was the only market that continued to grow. So all that luxury spending that would normally take place outside of China has shifted into China,” he said.  “As a result, China’s share of the overall luxury market is estimated to have doubled to around 20 per cent in 2020 — with Chinese consumers of course previously having bought a lot of luxury products overseas.”     The ‘experience’ of luxury shoppingTo some extent, luxury shoppers outside of China have also been spending more at home. Kering, the owner of Gucci and several other luxury brands, recently revealed that North America made up 23 per cent of global revenue in Q3 2020, an increase of five percentage points year on year.But for the most part, local luxury shoppers have nowhere near filled the gap left by Chinese tourists. Both Altman and Wiggenraad observed that luxury retailers in Hong Kong had been badly affected by travel bans. “As much as 70 per cent of luxury sales in Hong Kong are made by tourists,” Wiggenraad said. “While brands here are refocusing on local consumers in the absence of mainland Chinese shoppers, this has been unable to offset the negative impact of the lack of visitors.” Part of the problem, according to Altman, is that — for tourists — there is an “experience” attached to buying a luxury item overseas, which retailers may have a hard time recreating for local customers. “Luxury brands need to create bespoke experiences,” he said. “Venture into the experiential, a fast-growing sector and most importantly, embrace and strengthen digital and omnichannel experiences.” Both Altman and Wiggenraad noted an uptick in brands joining e-commerce platforms that cater to Chinese shoppers. For instance, Cartier, Montblanc, Prada, Miu Miu, Alexander Wang and Balenciaga all opened digital storefronts on Alibaba’s Tmall Global last year. “I think this trend was going on before the pandemic anyway,” Wiggenraad said. “But it is true that [it] has accelerated in 2020 as global brands have been keen to capitalise on one of the few markets to have experienced growth.” An overlooked audience at homeOne thing is certain: with vaccinations only just beginning to take place and international travel likely to remain disrupted for the first half of 2021 if not longer, luxury retailers can’t afford to wait for Chinese tourists to return to their stores. Roxanne Millar, general manager of Bastion Asia, a marketing agency that helps Australian brands connect with Asian audiences, believes the upcoming Lunar New Year holiday provides an opportunity for brands to target local audiences they might have overlooked in the past. “The Asian audience within Australia is large and has continued to spend throughout the pandemic — many are unable to travel internationally and have been looking for outlets in which to spend their significant disposable income,” Millar said. “This consumer group is eager to spend but needs a reason to engage.” Producing a Lunar New Year-themed product, however, is not enough. “Brands should look at what LNY means for communities across Asia and how they can convey the meaning of these holidays through that engagement,” she said.Brands also need to consider investing in channels, such as WeChat and Red, that reach these audiences and work hard to cultivate audiences within them. “When international travel returns, it will make attracting international buyers even easier as brands will already have a strong local referral network to assist,” Millar said.