Consumers in Crisis:
Understanding the effect of the Coronavirus on China Consumers
A Machine-Learning Generated Industry Report
The Coronavirus crisis has created mayhem in China in 2020. At the time of writing there have been more than 74,000 recorded cases of the virus in China and over 2000 deaths. Over 80 cities and five provinces are on complete lockdown and even Beijing and Shanghai are experiencing restrictions in movement of people.
Experts are downbeat on the economy. Morgan Stanley forecast growth in Q1 to fall to 3.5% and a poll undertaken by the Chinese Academy of Social Science (CASS) of 1,295 firms, found that 43.9% expected their business to lose money in 2020.
The retail landscape for the the rest of the year is unclear. Business leaders only have partial visibility of the situation and need the latest China consumer insights in order to create a strategy to sail their business successfully through a tough time.
Re-Hub have worked together with Machine Learning Consumer Insights company, Zectr, to create this 24 page AI-powered industry report.
Key Insights from this paper include:
- Consumers are pessimistic about the future and expect that they will have to wait for around 4.75 months for the situation to return to normal.
- China consumers believe it's extremely important for brands operating in the country to demonstrate their support for China at this tough time.
- Overall consumer demand is not expected to change, with respondents only expecting a 17% change in their budget from 2019.
- Large divergence in demand for different segments and categories:
- Young Professionals (Tier-1 white collar workers) will be resilient in their spending but will be less likely to pay for categories such as travel.
- Silver Foxes (retired consumers with lower incomes) are expected to spend less in general but could increase spending on categories like packaged goods.
- Tasteful Cosmopolitans (mature with higher incomes) are usually heavy spenders on luxury items, but will curb this if the crisis goes on too long.
- Fashion Forward Moms (white-collar mothers) will spend less on clothing and cosmetics if the situation does not get better quickly