• January 31, 2023

No hongbao for red packet makers this year, Consumer

Sat, January 30, 2021 – 5:50 a.m.

Singapore

HONGBAO printers in Singapore are feeling the pressure leading up to this year’s holiday season as they grapple with disruptions caused by the Covid-19 pandemic that has suppressed the Chinese New Year (CNY) celebrations.

Given the economic downturn and uncertainty, as well as fears that viruses could be transmitted through physical exchange, many companies have scaled back their volumes of physical Hongbao printing. This is compounding the general decline of the industry as companies become more climate conscious.

Caston and Craftwerkz, both design and production companies that specialize in red packages, felt the crisis. More than 80 percent of their products are related to CNY, the rest are products like planners and greeting cards.

Caston co-founder Mr. Alvin Tan said the company had printed up to 40 million red packets every Christmas season for the past five years but had “only produced over 20 million” this year due to lower order volumes.

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OCBC, one of Caston’s long-time customers, said in a statement that red package printing in Singapore and the region has been reduced by about 20 percent as safer management measures for Covid-19 and shifts are introduced towards greener E-Hongbao .

While banks and financial institutions make up the bulk of Caston’s clientele, airlines have also been a source of business in the past. However, with the aviation sector one of the hardest hit by the pandemic, Caston’s orders from airlines have dropped to zero this year.

While at Craftwerkz the demand for “high-end versions” of red packages from customers of luxury brands has been largely constant, and some even increased their budgets to “outperform” the competition, there has been a 20 to 30 percent decline in demand for mass market Hongbao who make up a large part of his orders.

“April, when Singapore was locked, is usually the main month for our meetings with the banking industry,” said Shirley Siow, co-founder of Craftwerkz. “And because of Covid, people were much more conservative with their orders this year.”

Ms. Siow also noted that despite many last minute inquiries, Craftwerkz had fewer orders to take due to the lower suggested prices and the risks of taking orders due to economic instability and interruptions in the supply chain.

“Value-added processes” in Hongbao printing are usually carried out in Singapore, Malaysia and China, depending on quality and speed requirements, Craftwerkz explained.

However, capacity has been reduced by the Malaysian Government’s Movement Control Ordinance and the current logistics landscape in China’s shipping industry, where demand has exceeded its shipping capacity, particularly through the implementation of Covid-19 security measures.

Switts, a corporate gift provider that also makes red packages, recently received numerous inquiries about its Hongbao. One situation that owner Stacy Chiang has speculated could be due to small businesses failing to secure their regular overseas orders.

“Last week we got maybe 30 calls a day,” she said. “It’s really impossible to speed everything up.”

Mr. Tan also faced rising costs and delays due to the pandemic. “We need to book the shipping containers early and their prices are up 70 percent,” he said of importing their products from China, where Caston has a manufacturing facility.

Aside from the huge spike in costs, the company may not even be able to secure shipping. Even then, deliveries keep getting delayed, he said.

With Caston confirming its orders with customers months before they shipped, it was forced to pay the additional costs. “It has been very difficult this year,” said Mr. Tan.

The gritty news this year is an extension of the physical Hongbao’s decline over the years. E-Hongbao, which allows users to send red packages through electronic money transfer, has become increasingly popular.

The Monetary Authority of Singapore has encouraged Singaporeans to adopt it this year, both as a preventive measure against Covid-19 and as part of their shift towards environmental sustainability.

In response to customers’ desire to reduce their carbon footprint, Hongbao printers in Singapore have adopted environmentally friendly practices.

Caston, Craftwerkz and Switts all offer the option to print on FSC paper that is certified as responsibly harvested. At both Caston and Craftwerkz, more than half of their customers demand the use of FSC paper.

Craftwerkz has also seen more customers for reusable alternatives to plastic packaging, and Caston encourages customers to put quality over quantity as many customers have unused Hongbao to save.

Despite the industry’s downtrend, Hong Kong printers are confident that their trade has a role in Singapore’s culture. “E-Hongbao is just another choice,” said Mr Tan.

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