Measuring the impact of the

coronavirus on China’s
consumption
Kantar’s nationwide consumer survey on their changing
behaviour and attitude during outbreak.
The quick spreading of coronavirus has totally changed China’s usually
busy and cheerful Lunar New Year period: people were required to stay
at home, inter-city transportation has been largely reduced, international
flights have been cut down to minimal, almost everyone has cancelled
their travel (unless they were already overseas), visiting friends, and out-
of-home activities. Schools are not opened and teachers have to teach
their classes through livestreaming, even forcing sports teachers to
teach kids to work out at home. Governments at all levels urged
companies and stores to postpone re-opening businesses by at least one
week and encouraged people to work from home whenever possible.

To understand how this is changing Chinese consumers’ behaviour and

attitude during this time, and how they might resume/change their
spending once the pandemic is over, Kantar launched a nationwide
survey from Feb 6 till 9 through WeChat. The survey managed to collect
more than 1,000 samples, including nearly 200 from the worst-hit Hubei
Province. The sample is representative to mainstream consumer profile.

1. Outbreak’s impact by industry; possible level of rebound of

each industry

We asked consumers about the coronavirus disease’ impact on their

spending on 24 industries, and how likely they would resume, or
increase/reduce, their spending on these industries when the outbreak is
over. We then categorize the 24 industries into different types.
Among all industries, we can see out-of-home dining, OOH entertainment
and travel have been hit worst because people cannot leave home:
about 75% surveyed consumers have cancelled all planned spending
related to these industries, another 17% reduced their spending. To
these industries’ relief, the potential level of rebound spending is also
sizable: 82% respondents said they will resume their cancelled OOH
dining spending once the outbreak is over, 78% will resume their
cancelled spending on travel and 77% resume OOH entertainment.

Four industries – advanced epidemic prevention, basic epidemic

prevention, drugs and nutritional supplements – sold out their stocks in
some parts of China. It appears that consumers will continue to stock up
these products even when the outbreak is over. We also noticed the
unmet demand for supplements is significantly higher in Hubei Province
than the rest of China.

Some seemingly distant industries have become collateral damage of

the outbreak. For example, due to reduction in OOH dining and
friend/relative visiting, 57% surveyed consumers have cancelled or
reduced spending on liquor. The same is true about cosmetics (reduce +
cancel=56%) and apparel (reduce + cancel = 67%). But data also
showed the rebounding spending in these industries are also relatively
strong.

The outbreak has also increased people’s spending in some industries,

such as food and beverage (40% respondents spent more), household
cleaning (48%), medical/life insurance (38%, significantly higher in Hubei
than rest of China during the outbreak). Consumers’ demand for these
industries will continue to be robust after the outbreak.

Overall, luxury might experience the biggest negative impact from

coronavirus in both short- and middle-term: 61% surveyed respondents
reduced or cancelled their spending on luxury; after the outbreak is over,
21% said they would continue to reduce – higher than any other
industry. This might be related to more fundamental changes in people’s
attitude towards how/why they buy (details to follow in the article).

2. Outbreak’s impact by retail channel; possible level of rebound

of each channel  

During the outbreak, many new and emerging retail channels

experienced explosive growth, because 1) all consumers are required to
stay home as much as possible; 2) many shops are closed for an
extended period; 3) most families need fresh groceries to cook at home.

Among all surveyed consumers, 55% have bought from e-commerce

platforms (Tmall, JD.com, Taobao, etc), very close to supermarket, which
is the No.1 retail channel mentioned by 58% respondents. Online-to-
offline channels, such as Ele.me, Meituan, Dingdong Maicai, which
connect stores with consumers at home, are mentioned by 35%
respondents – almost the same as hypermarkets (34%). Since so many
people are staying at home, the residential complex community WeChat
groups became a key information source platform. Surprisingly, it
emerged as a new group purchasing channel (mentioned by 35%) as
well as neighbours would join to launch group purchases.

Surveyed consumers said they would resume their frequent visit to

offline retail channels: 36% said they would visit hypermarkets more
often, 37% said they would visit supermarkets more often. However, that
doesn’t mean the online channels will stop its growth: 42% said they will
buy more frequently from e-commerce platforms, only 8% said will buy
less frequently. About 31% said they would buy more frequently from
new retail formats, such as Hema.

It is worth noticing that though O2O enjoyed a high penetration during

the outbreak and 32% surveyed consumers said after outbreak they
would buy more often from O2O, still 17% said they would buy less from
O2O after outbreak -  higher than any other channel. O2O brands need
to think how they can retain these new consumers in the post
coronavirus era.

3. What are stay-at-home consumers doing?

This is probably the longest home-coming period for most of Chinese

people. Except for following the development of the disease outbreak,
what are Chinese consumers doing at home? Our survey captures a
snapshot of people’s home activity during this special period of time.

Understandably, watching video is the most mentioned time-killer.

Watching long video (mentioned by 58%), short video (56%), linear TV
(41%) are among the most mentioned activities. Digital entertainment is
also popular, such as playing mobile/online games (39%, male
significantly higher than female), online entertainment (online karaoke,
etc) (24%, Hubei higher than rest of China), watching live
video/livestream (20%).

It might be an exaggeration that the outbreak has turned every Chinese

into a chef, but there are 28% people cooking/baking at home (female
significantly higher than male). Also 23% enjoyed their parenting time.
Same amount (not necessarily the same group) of people are working
out at home (female significantly higher than male). Online education
was mentioned by 30% of respondents, and 26% mentioned offline
learning/reading. But as almost everyone won’t meet others for a long
time, eventually people won’t bother to take care of their skin: only 10%
would spend more time to “nurture skin”.

BTW, 54% said they are sleeping to kill time.

The outbreak has also changed people’s engagement with media. More
than 40% respondents said they have significantly spent more time on
short video apps and digital video platforms. Other media touchpoints
that are being used much longer include digital news platforms
(mentioned by 37%), social media (34%, although almost everyone is on
WeChat for long hours in pre-outbreak days), TV ads (33%) and online
music (26%).

This outbreak has also nudged/forced many consumers to try something

they’ve never used before, creating an opportunity for many new
sectors. Among all respondents, 84% tried at least one new service for
the first time, the highest being online medical consultancy (34%) and
online education (33%), followed by working from home software/app
(29%) and paying for digital entertainment service (26%).

4. Consumers’ attitude change

One of the most popular jokes during this outbreak is: “Now human
being can understand why dogs need to be walked every day!” When the
outbreak is eventually over, will, or how will, Chinese consumers change?

First of all, everyone wants to go out! The most mentioned activity for
“what do you want to do most when the outbreak is over” is “go out to
dine with others” (65%), followed by “go shopping” (58%), and “outdoor
entertainment” (55%) and “outdoor exercise/work out” (53%). “Travel”
was mentioned by 45% respondents.
Though everyone has tried their best to stock up epidemic prevention
products, 83% surveyed consumers will still stock up masks and
disinfectant. Wearing a mask will become a daily behaviour for 65%
people; 76% will pay attention to the bacteria killing feature of personal
care and household cleaning products; 63% will consider buy home
appliances for disinfecting purposes.

In our snapshot survey, under this circumstance, Chinese people’s

consumption attitude will become more conservative. There are more
people agreeing to “save up for rainy days”, “reduce unnecessary
spending” than agreeing to “enjoy instant pleasure”. People will treasure
things that money cannot buy, such as “spending more time with family
and friends”, “richer spiritual world”, “becoming a better self”.

In their attitude towards brand, people will “pay more to buy from
socially responsible brands”, “pay more for cleaner environment and
services”, “pay more attention to environmental protection and
sustainability”.

Towards the end of the survey, we asked participating consumers to

nominate brands that they liked more during the outbreak period (at
most three) and explain why. From the 375 brands nominated, we can
find that while some won consumers’ hearts because of their donation
for the fight against the coronavirus, some are nominated for continuing
to offer same high level of service/product under this extremely
challenging circumstance. We believe a friendly brand in need is a great
brand in deed. Brand love won within this special period can support a
brand’s sustainable growth.