Mark Tanner
7 April 2013 0 Comments

Although China’s current Bird Flu H7N9 scare has had just 24 ‘confirmed’ infections and seven deaths, memories of 8,000 SARS infections a decade earlier still cut deep with the Chinese public. With an online population increasingly connected through social media, news of cases, such as the Weibo post of the third death by a brave hospital worker, helps fuel changes in consumer behaviour in China.

I was out and about over the busy Qingming Festival period, and noticed many more locals than usual wearing the protective face masks, especially in crowded areas such as public transport and shopping malls. Although a short-term behavioural change, it contributes to subtle longer term habits and preferences for Chinese consumers. Like with most tragedy’s there are the winners and the losers, and China’s H7N9 outbreak is no exception:

Winners from China’s Bird Flu

As we saw with the chronic pollution in January, Chinese consumers opted to shop online rather than risking their health by unnecessarily leaving their home. I expect Taobao, TMall, 360buys & co will see a spike in online transactions until this clears up.

With the increase in eCommerce sales, the goods have to be delivered. I’d expect more consumers eating in the confines of their homes, rather than crowded restaurants, which will see more food delivered. While delivery business owners are likely to see extra profits, hopefully they’ll share some of it with the poor delivery men who are more exposed to risk.

One little reported side effect of SARS, was that many Chinese who could afford a car, bought one rather than risking infection on crowded public transport. For consumers considering buying a car, an outbreak like Bird Flu could be the clincher.

Imported Foods
Although the Bird Flu hasn’t reached the scale of the 2010 Melamine milk contamination, it contributes to Chinese consumer perceptions that local food handling and standards are not as safe as overseas, leading to consumers paying a premium for imported foods which is perceived as safer.

Overseas Property & Education Providers
Similar to imported foods, the H7N9 outbreak will contribute to Chinese consumers overall perception that China is not a safe place to live compared to other countries, encouraging them to purchase a safe haven overseas. They may also be less likely to risk their precious child’s health either, sending them abroad for their studies.

Facemasks, Pharmaceutical and Sanitary Products
While most Chinese consumers wont be barricading themselves up in their apartments with stocks of instant noodles, many will take precautions buying products that will reduce the risk of Bird Flu infection.


Losers from China’s Bird Flu

High Street Retailers and Malls
The eCommerce spike will be brick and mortar retailer’s loss. The High Street retailers who also have a strong eCommerce presence will fare best.

Internet Users
Many of China’s 564 million Internet users will have noticed a slowdown in Internet usage, to a crawl in many instances over the last while. Coincidental? Maybe.

Local Food Suppliers, Educational Facilities, Public Transport Providers & Tourism Operators
Those around the Yangtze River Delta are most likely to take a small hit as Chinese consumer preferences shift away from activities that may put them at risk of Bird Flu infection.

Food & Health Authorities
May be working a little overtime until this is resolved.

Poultry Suppliers
Not just the owners of the 20,000 birds killed in Nanjing’s wholesale markets, but all poultry suppliers selling in China right down to producers of Kung Pao Chicken sauce will feel a hit as Chinese meat preferences will turn to pork, beef and other meats in the short-medium term. KFC certainly doesn’t appear as busy as it’s been in the past.

The Humble Pig
With preferences shifting from wings to hooves, increased demand for pork may see pigs enjoying the good life in rural Anhui being slaughtered a little sooner than expected.

Winners and losers aside, in the long run another bird flu epidemic is good for no one. Let’s hope the virus is contained and resolved soon.