Mark Tanner
11 March 2020 0 Comments

The situation continues to improve in China with no new cases outside of Hubei Province for two days on Monday and the lowest infection rates in China since 20 January. President Xi Jinping visited Wuhan yesterday in a major show of confidence that China has turned the corner on the coronavirus.

Mid last week, President Xi chaired a meeting focusing on China stabilizing economic and social development. The meeting underscored “unleashing consumption that had been suppressed by the outbreak and strengthening new and upgraded consumption to compensate the lost consumption on goods and services during the outbreak.”

This focus is good news for brands selling in China. Beijing is likely to have supportive regulations that will stoke consumer spending, with many predicting large stimulus measures to help push things along.

When consumer spending returns to normal, it is unlikely that behaviour will revert back to exactly the way things were. Chinese consumers have been through a lot since late January. The unprecedented measures to contain the virus, the uncertainty and weeks spent just in their homes have provided many consumers with time to reflect and also altered behaviours – some which may stick.

As we noted last week, ecommerce is likely to be one of the biggest beneficiaries due to more older consumers and lower-tier residents adopting online shopping channels when all of the other options had closed. Getting users on board and familiar with platforms is often the biggest challenge for laggard users. Similarly, more Chinese are consuming media, entertainment and gaming online. Consumers are likely to be more addicted to gaming than ever, and astute brands should explore opportunities to incorporate this into their marketing strategies.

When everything is back to normal and the kids are back to school, we expect that there will be two main threads of consumer behaviour. The first will be those who have had a bad case of cabin fever, cooped up in the apartment, and will embrace the newfound freedom – dining out more, travelling more, and being more social than ever. The other group will be those who have had become more connected to their homes: the home cooking, the family time, the in-home fitness regimes. These consumers will spend more on making their homes special, purchasing new smart appliances, furniture and even art.

China Skinny is observing other trends forming which we expect will last far beyond the virus. Consumers’ wider focus on health will reward brands even more than usual who position themselves well as clean, natural and wellness-related. At a deeper level, the publicised success of integrating Western medicine with traditional Chinese medicine (TCM) may shift perceptions around products that incorporate TCM characteristics into their proposition. With the positive coronavirus outlook, coupled with Beijing’s commitment to driving consumption, brands should start strategizing about how they can make the most of the new opportunities and ensure they are factoring in new behaviour trends. Contact China Skinny about how best to do this. Click/tap here to see this week’s most important China market and marketing news.