Western companies who are already engaged with Chinese suppliers will be familiar with having to deal with the huge annual impact of Chinese New Year (CNY).
There can be enormous disruption to supply chains during the period immediately before and after the actual New Year (which lands this year on February 11) as workers across China migrate back to their home towns for an extended holiday. It is always a huge management challenge for Factory Bosses to ensure that their work teams resume normal capacity at the end of the Holiday Period as they know that a significant proportion of their staff will not return; workers deciding to stay in their home towns or finding better-paid opportunities elsewhere.
Most factory workers sign up for an annual labour contract, beginning and ending at CNY time. Many factories experience an absentee rate of over 20% when business resumes, and gaps need to be filled as quickly and efficiently as possible.
This year might well be different as travel restrictions remain in place to try to control the Covid virus. The traditional week-long holiday for many Chinese companies is being extended both before and after CNY in an attempt to lower and spread out the inevitable congestion on trains and buses. This might mean that it could take until early March for normal supply chains to be back in full swing.
SoDa has considerable experience, both in China and the West, of Chinese New Year disruption and we would be happy to give you our opinions and insights which we hope will reduce the negative impact.
During this holiday period, it is still a good opportunity to promote brands since end users are searching on mobile phone everyday, China social media, online shop like Tmall, Taobao JD also has huge traffic even though delivery has to be arranged after Chinese new year.
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