What, Why and How consumers behaviour is changing in China due to the pandemic.

The COVID pandemic has fundamentally changed the world and its working as we know it. People are thinking differently, living differently, and in many ways buying differently. Supply chains have been tested. Retailers are closing their doors, and consumers across the globe are looking at the markets and products through an entirely new perspective.

The pandemic has reshaped the entire network and dynamics of the markets in these past few months and is rapidly accelerating new long-term trends in the space of mere weeks. The new habits formed now are predicted to endure beyond the crisis, permanently changing what we value; how we live and work and how and where we shop.

Consumers are worried about the impact of COVID-19, both from an economic and health perspective. People have been responding in a variety of new ways, their behaviours, attitudes, and habits have changed. They are settling into a ‘new normal’ and unlearning the conventional ways of living. People are living in uncertainty and fear as they figure out how this crisis impacts them and their families.

The highest level of fear surrounds the impact of this virus on the economy, with 88% of consumers revealing that they are worried, while 82% worry about the health of their loved ones. Meanwhile, the fear of personal job security and health is also prevailing. An increasing polarity has also been reflected in several surveys, while more people are optimistic, higher numbers are pessimistic about the economy’s recovery.

This seemingly ubiquitous lack of consumer confidence implies the challenge ahead.

Everyone has no choice but to live with the dreadful reality of COVID-19. With more and more countries reopening parts of their economies, people are yet to come with terms to step outside. Therefore, a stronger appetite for online shopping has become evident among consumers, although with variations across categories.

Slowly, Chinese consumers are regaining their confidence as the pandemic subsides, the economy is rebuilding and reopening, suggesting the majority will spend more in some specific categories over the coming months.

According to a survey of consumer attitudes in China, a significant minority, however, is less confident about the future, implying many brands would have to work harder to gain their confidence back.

Although the pandemic’s impact has varied on different degrees across the globe, some themes have become recurrent among consumers across the globe, including China.

New purchasing patterns to outmanoeuvre uncertainty

In times of uncertainty, the need for the basic essentials of life becomes the top priority. It is not surprising that personal health is on the top order for consumers in China. Their other leading priorities are personal safety, food, and medical security and financial security.

Consumers’ priorities have become centred on the most basic needs, increasing the demand for personal care and hygiene staple products, while non- essential product categories continue to slump. As ‘buy local’ trend accelerates, the factors influencing brand decisions are also changing.

Some specific product categories have suffered more than others. Most consumer brands had been to their lowest lows during the crisis, due to all over declines in the demand, particularly in categories such as alcohol and makeup.

New and evolving shopping habits

The outbreak has pushed the consumers out of their normal routines. Chinese consumers are adapting, and evolving new habits and patterns that many anticipate will continue in the long term.

Three major long term trends that are here to stay:

Conscious consumption:

Consumers are working towards being more minimalist by limiting food waste and efficient shopping habits with cost-friendly and more sustainable options. Brands must make this a key part of their strategy for maximum consumer satisfaction.

Growing love for local:

The desire to shop local is reflected in both the products that consumers buy and from where they buy it. Companies must explore new and innovative ways to connect locally- be it through customizing for local needs, highlighting local origin, or engaging in locally relevant ways.

Increasing focus on health:

Having a “health strategy” will be a strategic differentiator in the future. Consumers are worried about their safety and health which decreased their trust in almost everything as they are afraid to buy. Reason for it being the production and selling process, which is unknown to them.

Brands should not ignore this change and make it a priority to support healthy lifestyles for its consumers, employees, and shoppers. Also, although there has been a change in the lifestyle of people during the pandemic, which would definitely leave the aftermath, they have not completely stopped buying things. Therefore, it would be better for the Brands to openly promote the strategies about ‘health and safety’.

The E-Commerce Phenomenon

E-Commerce or also known as Digital commerce has been on the rise as new consumers migrate online, even for grocery shopping, a trend that is likely to sustain post-outbreak. Alibaba’s online supermarket, Hema, reported that orders were up 220% year-over-year during Chinese New Year when the virus started spreading.

One in five consumers in China who ordered their last groceries online did so for the first time, but for many other consumers aged 56 years and above, this was one in three.

The rise in digital engagement, social media marketing, e-commerce, and O2O was expected, given the extensive quarantine measures. Consumers relied mostly on online browsing and online purchases rose during the peak period of the outbreak. To encourage and respond to these trends, many goods’ companies ramped up investment in the e-commerce domain. Local brands tended to react faster in the online space, reflecting maturer digital capabilities than the existing international brands. As local brands stepped up online marketing initiatives, international brands took more cautious approaches.

This increase, as a result, generated a 15–30 percentage point incremental share of purchases across a range of categories, mostly skincare.

Conclusion

Both Chinese and multinational brands responded effectively to the crisis, and in many ways prepared beforehand for the ‘new normal’.

Given these diverse approaches, however, there was little to no sign of the emergence of a standard formula for consumer engagement during or after a crisis.

The significant momentum in e-commerce during the outbreak of the pandemic suggests that Chinese consumers are likely to rely more on online shopping in the future as well, especially for categories with strong online track records, such as makeup, skincare, and personal care.

Brands in these categories are looking forward to the coming period as an opportunity to build initiatives that could be beneficial if any natural mishap occurs again.

By Geetanjali Mehta
Team Loc-N-Apps
for similar articles visit — locnapps.com/blogs

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