No hongbao for red packet makers this year

Singapore

HONGBAO printers in Singapore are feeling the press-ure in the run-up to this year's festive season as they grappled with disruptions caused by the Covid-19 pandemic that has subdued Chinese New Year (CNY) celebrations.

Amid the economic downturn and uncertainty, as well as fears of viral transmissions through physical exchanges, many companies have reduced their volume of physical hongbao printing, a reinforcement of a general decline in the industry as companies become more climate conscious.

Caston and Craftwerkz, both design and production companies that specialise in red packets, have felt the pinch. More than 80 per cent of their products are CNY-related, with the remainder being products like planners and greeting cards.

Mr Alvin Tan, co-founder of Caston, said that in the past five years, the company printed up to 40 million red packets each festive season, but produced "only 20-over million" due to a lower volume of orders this year.

OCBC, one of Caston's long-standing clients, has said in a statement that it has reduced its printing of red packets in Singapore and the region by about 20 per cent, which comes as it introduces more safe management measures for Covid-19 and shifts towards more eco-friendly e-hongbao.

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While banks and financial institutions make up the bulk of Caston's clientele, airlines were also a source of business in the past. However, with the aviation sector being one of the hardest-hit in the pandemic, Caston's orders from airlines took a nosedive to zero this year.

At Craftwerkz, while the demand for "high-end versions" of red packets from luxury-brand clients has been largely steady, with some even increasing their budgets to "outdo" the competition, there has been a 20 to 30 per cent fall in demand for mass-market hongbao, which make up a large majority of its orders.

"April, when Singapore had the lockdown, is usually the peak month for our meetings with the bank industry," said Craftwerkz co-founder Shirley Siow. "And because of Covid, people were a lot more conservative with their orders this year."

Ms Siow also noted that Craftwerkz has had to accept fewer orders despite many last-minute requests because of the lower prices proposed and the risks in taking orders amid the economic instability and interruptions in the supply chain.

"Value-added processes" in its hongbao printing are usually carried out in Singapore, Malaysia and China, depending on quality and speed requirements, Craftwerkz explained.

However, its capacity has been reduced by the Malaysian government's Movement Control Order and the current logistics landscape in China's shipping industry, where demand has outstripped their shipping capacity, especially with the implementation of Covid-19 safety measures.

Switts, a corporate gift provider which also produces red packets, received a flurry of enquiries about their hongbao recently, a situation which owner Stacy Chiang speculates could be due to small companies being unable to secure their regular orders from overseas.

"Last week, we actually received maybe 30 calls a day," she said. "It's really impossible to rush everything out."

Mr Tan has also had to contend with rising costs and delays due to the pandemic. "We must book the shipping containers early on, and their prices have increased by 70 per cent," he said about importing their products from China, where Caston has a production plant.

Aside from the huge increase in costs, the company might not even be able to secure shipment. Even then, the shipments keep getting delayed, he said.

Because Caston had confirmed their orders with clients months in advance of shipments, it was forced to absorb the additional costs. "It's been very tough this year," said Mr Tan.

The grim news this year is an extension of the decline of physical hongbao over the years. E-hongbao, which allow users to send red packets over electronic fund transfer, have become increasingly popular.

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

But, galvanised by clients' desires to lower their carbon footprints, hongbao printers in Singapore have adopted green practices.

Caston, Craftwerkz and Switts all offer the option of printing on FSC paper, which is certified as responsibly harvested. At both Caston and Craftwerkz, more than half of their clients request the use of FSC paper.

Craftwerkz has also seen more clients in favour of reusable alternatives to plastic packaging and Caston encourages clients to prioritise quality over quantity, recognising that many customers are left with unused hongbao that they stash away.

Despite the downward trend of the industry, hongbao printers are confident in the place their trade holds in Singapore's culture. "E-hongbao is just one more choice," said Mr Tan.