Ying SongandSumeet Saksena

Four coronavirus-driven Chinese consumer trends that will last even after the epidemic has subsided

The outbreak has hastened the transition to e-commerce and accelerated the use of artificial intelligence and robotics

People are flocking to local stores and pickup points instead of patronising centralised shopping areas and are showing more interest in food safety and health

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A child wearing a protective face mask rides a scooter next to closed shops in the deserted shopping and residential area of Sanlitun in Beijing, on February 26. Photo: EPA-EFE

Ying SongandSumeet Saksena

Published: 1:00am, 4 Mar 2020Updated: 2:17am, 4 Mar 2020

Given the strict limits on movement put in place in China to control the spread of the coronavirus, many consumers are hunkering down at home. Most public consumption locations, such as shopping centres, department stores, restaurants, cinemas and sports arenas, have been closed.

This has brought about a drastic reduction in overall commercial activity compared to the same period last year – a nearly 25 per cent drop in retail sales during the first week of the crisis and more than 40 per cent in the second week. Based on the impact of severe acute respiratory syndrome on China’s retail market in 2003, it’s estimated that total retail sales in the first quarter of 2020 may drop around 5 per cent.

There have also been changes in the kind of items people are buying and how they’re buying them. Current spending is mainly on physical goods, while spending on services, such as entertainment, health care and education has largely stopped. In addition, consumers are focused on food supplies and other necessities. Optional goods, like clothing, cars, home appliances and electronics, have essentially become unsellable.

Presumably, general consumption will pick up again once the immediate crisis has passed, but several important changes are likely to persist in the long term.

People shop in a supermarket in Beijing on February 2. During the coronavirus epidemic, Chinese consumers have been largely buying essential goods, with spending on services like entertainment and education in decline. Photo: EPA-EFE

First, China will see even more online shopping. While the country is already an established leader in e-commerce, as people have stayed at home during the coronavirus epidemic, demand for online shopping has become even more critical.

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