#BusinessInsights: The COVID19 Impact on Consumer Trends
COVID-19 is impacting industries across the spectrum as supply chains get disrupted and consumer behaviour drastically changes in the aftermath of the outbreak. We condense insights from leading agencies like Euromonitor & Mintel to draw parallels with likely patterns that are emerging in India too.
Euromonitor International has launched an industry report, ‘The Impact of Coronavirus’ on FMCG and Service Sectors in China, sharing insights into how this epidemic will impact China’s consumers goods industries. Here we draw a few conclusions for India, based on the report.
Retailing
- With China accounting for 56% of global apparel production, the temporary halt of production capacity will pose a challenge to apparel brand owners’ supply chain management.
- As families are spending more time together indoors, there is strong potential to cultivate online shopping habits among the older generation, with apparel and beauty categories most likely to benefit. E-commerce is already one of the biggest sales channels of beauty and personal care in China and accounted for 38% of retail sales value for coloured cosmetics in 2019.
- Hence good news for the beauty sales online – worldwide & in India. With salon operators struggling with falling footfalls, it remains to be seen if, in a situation like this, the consumer will risk/prefer home salon services, a growing trend in India.
Consumer Health
Based on Novel Coronavirus Diagnosis and Treatment Plan in early 2020, over the counter drugs containing traditional Chinese medicine ingredients can be used to have certain effects in clinical therapeutics against the virus. This has resulted in an increase in demand for Forsythia, Ginseng, Houttuynia (Chameleon plant) and Radix Isatidis (Banlangen).
On similar lines, medicinal products from Ayurveda & Homeopathy will flourish especially those focused on boosting immunity.
Due to the highly contagious nature of COVID-19, disposable wipes in a portable format that contains 75% alcohol and kill viruses are in great and urgent demand amongst Chinese consumers. However, such products are not widely available for limited daily usage and are in short supply, so consumers are turning to the next best thing — personal wipes positioned with germ-killing and anti-bacterial functionalities, to improve personal hygiene. Personal wipes are expected to enjoy a temporary win or at least a slight bump in sales as a result of increased consumer demand in 2020. This will be an interesting growth area in India too.
A Report by Roger Shi of Mintel has these interesting insights
- Farmers with products in local supermarkets have been using WeChat to reach potential consumers. Fresh grocery buyers, and especially older generations can group together to bundle products for a cheaper unit price. Mintel research suggests that older consumers place a great emphasis on value for money; as a result, group buying has become more prevalent during this outbreak.
- The outbreak has exposed older consumers to the benefits of local O2O (online-to-offline) models, utilising social media tools like WeChat to purchase as a community. Companies and brands should seek to keep this momentum going once normalcy resumes by tailoring offerings to this consumer segment.
- Before the outbreak, many consumers shopped daily buying only what they needed for the next few days. Consumers purchasing as much as possible with less frequency has become the norm now for grocery shopping. However, once the outbreak is over, consumers will likely resume purchasing essential items in regular quantities.