In the opening of 2020, the world was startled with the emergence of a new virus which originated in China. It then spread across and beyond Asia in a matter of weeks. By end of January, just a month when the first cases of COVID-19 were detected in Hubei province in China; the virus had recorded a death toll of 213.
The World Health Organization then declared a global emergency with regards to rapid spread of the outbreak. Travel bans, lockdowns, and precautionary measures, including checking of temperature in airports, malls, office buildings, and events and availability of sanitizers and alcohol in these venues—were put in place.
But more than the fear of contacting the disease, Asians are also scared of the outbreak’s effect in their day-to-day lives and financial security, according to the recent study released by Kantar.
According to their report, 60% of people across Asia are worried for their financial security, while a lesser 46% are concerned that they will contact the disease. Thirty four percent (34%) of Asians are worried that the outbreak, which infected almost a hundred thousand people across the globe by first week of March, will push economies to the brink of recession.
The United Nations reported that there is a $50-billion drop in worldwide manufacturing exports in February alone.
Drop in travels, increase in online shopping
The Kantar study, based on online survey of 3,000 consumers across six countries in the region including Singapore, Indonesia, Philippines, Korea, Japan and Thailand, showed that people are adjusting their lifestyles to reduce the risk from COIVD-19. Travel industry has been hit the hardest, as more people cancelled travel plans especially around Asia. Over half (59%) of the respondents said they decided to travel less to stay safe. Fifty two percent (52%) on the other hand said they are less likely to eat out and avoided socializing outside their house. Instead, they liked to spend their time streaming contents, hosting get-togethers at home and ordering food.
While there are sectors negatively affected by the outbreak, there are also which attained growth during the last two months. Based on the Kantar survey, there is 32% increase in online shopping, in South Korea having the highest increase at 41%. Online grocery platforms and food delivery services gained the highest increase, resulting in many providers having to adjust their strategies, as decrease of 35% in retail outlets was experienced, according to Kantar’s report.
Hygiene and health categories, apparently saw the biggest rise, with 48% of people saying they are buying more personal hygiene items, and 45% says they buy more health and nutritional items to improve their immunity. Additionally, there is increase in purchases of home cleaning items.
Furthermore, consumers said that they buy less of alcoholic beverages, luxury items and meat and seafoods.
The study highlights that consumers now heightened their focus on products and services that are safe to use, as well as brands that enhance health and wellbeing.
Opportunities in the Adversity
According to Kantar, food and beverage safety has emerged as key brand demand with more than half of consumers surveyed attributing food safety as the biggest need. And while the travel sector has been hit the hardest, consumers are still willing to spend if the sector offers promotions and deals.
Market intelligence agency Mintel on the other hand sees opportunity for brands as consumers want the ‘feel-good factor’ during this uncertain shift in their lifestyle. According to them, some of the biggest winners during the last recessions were luxuries such as premium skincare and sparkling wine.
“They are products that no one actually needed, but that did a great job of lifting people’s moods in tough times,” according to Mintel’s blog.
For instance, in China, 79% of surveyed consumers think grooming routines are a good way to reduce stress.
It is still uncertain how the progression, or rather the downturn of this outbreak will go in the following months, which will depend on the vigilance and response of governments all over the world. However, just as with other disruptions and glitches in the industry, this time also calls for retailers to rethink their strategies based on the consumer needs and new opportunities that could arise from the situation.
First published in Philippine Retailing 2020 Q1.