Coronavirus: Chinese consumer sentiment still reeling from pandemic, hitting hopes of ‘revenge shopping’

More than half of Chinese households plan to increase savings and cut back on spending following the Covid-19 pandemic, a new survey shows

Results show that consumer sentiment is still recovering from crisis and quash hopes of a quick rebound in the world’s second largest economy

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China's economy shrank for the first time in decades the first quarter as the coronavirus paralysed the country. Photo: AFP

Published: 2:00pm, 27 Apr 2020Updated: 10:29pm, 27 Apr 2020

A quick consumer rebound in China, or what some describe as “revenge shopping,” is unlikely to happen in the second quarter as more people focus on saving over spending following the coronavirus outbreak, a new survey shows.

More than half of Chinese households planned to increase their savings and cut back on spending after the outbreak was contained, while 40 per cent would maintain normal shopping patterns and 9 per cent would buy more, according to the survey of 28,000 people by researchers from China’s Southwestern University of Finance and Economics.

The study, which was released last week but conducted between late February and early March, surveyed users of Alipay, a popular mobile payment application developed by e-commerce company Alibaba, which also owns the South China Morning Post.

The survey results, which suggest Chinese are reluctant to spend even as the pandemic is brought under control, chimes with financial data published by the People’s Bank of China earlier this month.

In the first quarter, household savings rose 6.47 trillion yuan (US$913.4 billion), up 6.6 per cent from a year earlier and roughly equivalent to 70 billion yuan flowing into savings accounts every day during the period.

Hopes that Chinese would quickly resume their usual shopping habits after the coronavirus was brought under control were pinned largely on economic data released after the 2002-2003 severe acute respiratory syndrome (Sars) outbreak.

Retail sales growth in 2003 fell from 7.7 per cent in April to 4.3 per cent in May, when the outbreak was at its worst, and bounced back to 8 per cent in June when the virus was contained.