As China has yet to fully recover from the covid-19 outbreak, a poll covering more than 1,000 respondents across the country shed light on the coronavirus’ impact on Chinese consumers’ mindsets and behaviors.
The poll, run on March 9 and 10 by scholars from Peking University’s Guanghua School of Management and Central University of Finance and Economics in a partnership with the research section of news app Pengpai (The Paper), found that most of the 1,097 respondents, with an average age of 33.8, still exhibited a reasonable and optimistic attitude during the outbreak.
Penned by Guanghua professors Peng Siqing and Shen Qiaowei as well as Doctor Yao Kai, a report detailing the poll results revealed that consumers were more willing to spend their money on health protection and fitness while also showing a tendency to donate to anti-outbreak causes. They were able to tolerate moderate price soaring during the outbreak, but expressed expectations for products of higher quality, stable prices and incomes, more efficient social governance as well as friendlier treatments from people overseas.
SECURITY TRUMPS VANITY
More than 80 percent of consumers increased their spending on personal protective equipment (PPE) such as masks and disinfectants, including 53 percent that did so “a great deal.” However, spending on health supplements and medicines saw no obvious increase.
Meanwhile, people bought more nutritional food to increase stocks during lockdowns and boost immune systems. More than half of respondents also claimed they had learned some new skills and fitness routines during the outbreak, including the abilities to work from home and use video conference.
However, people drastically cut spending on non-essential products, notably luxury products, clothes and makeup.
“The outbreak pushed people to seek a sense of security at the expense of vanity,” said a report released after the poll, adding that this trend will continue and the luxury industry will suffer a huge blow as long as the outbreak is not completely under control.
As for entertainment, more than 60 percent people confessed a lack of self-control and playing too much games or social-network apps. Some 40 percent said they couldn’t help eating too much.
Also, some 86 percent agreed that every individual should contribute to the society and 71 percent had made donations during the outbreak. Crucially,more than 88 percent agreed that every one should have the right to voice their own opinion.
More than half of respondents had “huge or obvious” concerns such as substandard or counterfeit health protection products, potential infection in crowded public places and supply shortage of protective products.
Prices of protective gears and recommended medicines soared considerably at the start of the outbreak, with respondents put the increase at around 40 percent.
According to the report, early March, when the poll was conducted, saw prices of protective masks and gowns increase many folds worldwide. In comparison, a 40 percent price increase in China was mild and was soon under control thanks to timely government crackdown as well as better production output.
Meanwhile, food delivery and daily food products such as vegetables, eggs and milk saw a 25 percent increase in their prices, possibly due to heightened logistic costs during lockdowns. Price increases for daily consumables and services such as barber and household cleaning were all under 20 percent.
Analysis of the results also revealed that consumers were more likely to tolerate greater price increases when their regions were in more severe outbreak conditions. In Wubei, the center of China’s outbreak, locals’perceived price increase was over 50 percent while residents in Shandong and Jiangsu, two lightly-hit provinces, felt prices rose by 30 percent.
The poll showed that people in general would invest more in health and insurance even after the outbreak. While sales in most categories will bounce back to pre-outbreak levels, luxury products might continue to suffer.
Specifically, 58.7 percent said they would increase spending on fitness, 40 percent would buy more protective gears and 33.4 percent would invest more in health supplements. Some 38 percent were willing to increase medical insurance.
As for eating habits, 55 percent said they would use communal chopsticks and spoons, instead of personal ones, to scoop portions from serving dishes to their own plates even when having meals in public, and 82 percent would buy or eat less wild animals.
Meanwhile, 46 percent and 44 percent would increase party celebrations and travels respectively, and this increase was actually outweighed by decrease. Spending on entertainment and restaurants remained largely unchanged.
Some 39 percent would reduce purchases of luxury goods.
The report noted that respondents’ overall spending wills in early March had not fully recovered since nationwide lockdowns were not completed lifted off, echoing another research conducted almost at the same time that found 60 percent of stores were still closed and 78.7 percent of businesses that resumed operation claimed there were no customers at all.
Despite government efforts to push for work resumption and support for businesses, the report stressed that firms seeking to resume operations still faced many problems, such as inadequate market vigor and consumers’ fear of going out. As a results, sales performances were staggered and less than ideal.
Meanwhile, the global pandemic is bringing new uncertainty and China’s consumer spending in April and May might still be plagued by negative growth or low positive growth before a full recovery.
THE GOOD & THE BAD
March saw the dramatic contrary between China’s gradual control of the outbreak and the coronavirus’ rapid spreading overseas. While nearly 70 percent respondents at the time were confident that China would get domestic outbreak under control within three months, 64 percent did not think that the global pandemic would be in check.
Some 62 percent were confident in China’s post-outbreak economy, but a consider proportion were not that confident.
While 83 percent believed that China will make progress in handling public health affairs, only 38 percent were confident in local officials’sense of responsibility and governing abilities.
Meanwhile, 44 percent had worries about foreigners’ attitude toward Chinese people after the pandemic.
In terms of incomes, 80 percent were confident about retaining their jobs and had no debt worries, but many, notably those with a monthly income of 6,000 yuan and below, thought that their incomes throughout 2020 will be reduced. Those with more earnings were less worried.
The report called for further supply-side reform to boost spending upgrade as the outbreak effectively forced consumers to put more emphasis on health and quality. Firms should improve their products and services accordingly and win back consumers’ trust with quality and honesty, especially when people are alerted to and detest shoddy and counterfeit goods as well as specious slogans more than ever.
Promote a more healthy, civilized consumer culture and lifestyle. Some Chinese consumers still cannot rise above petty jealousy, vanity and competition when it comes to making spending decisions,and covid-19 is bound to make them value quality far more than quantity. Government policies should steer the public toward better spending habits and guide businesses to change accordingly.
More efforts should be made to stabilize employment and boost consumers’ confidence. Chinese consumers’ confidence is right now relatively stable and higher than their overseas counterparts’. However, the outbreak is still ongoing and its full impact on the society and economy has yet to come. The report stresses the fragility of consumer confidence in the face of a global crisis, calling for strengthened efforts to stabilize employment, the capital market, prices, supplies as well as people’s incomes.
(Disclaimer: Views expressed in the above article belong solely to the authors)