How does an epidemic affect consumer purchase behaviour

The country and the world have been paying close attention to the novel coronavirus outbreak in the past 2 weeks which, according to China’s National Health Commission up to 12am on 4th February 2020, has caused 20,471 infected in China (including Hong Kong, Macao and Taiwan) and 150 people confirmed infected across 23 countries outside of China*.

The impact of this outbreak has some similarities to SARS in 2003. Kantar Worldpanel China reviewed our consumer purchase data in China 15 cities back in 2002-2003 to shed light on how consumer behaviour changes might bring new challenges and opportunities for manufacturers and retailers.

The impact on the FMCG market

The first SARS case was discovered in Guangdong province in December 2002 and the first reported case outside of Guangdong happened in Beijing in March 2003. However, the major increase of infection happened in April and May 2003 and the spread of virus was contained by June.

The impact on the FMCG market during the first half of 2003 was significant especially during April and May where we observed a sharp slowdown. However, by June the market had recovered returning to similar growth rates seen at the beginning of the year. 

Categories In High Demand During SARS

The dine-out market was heavily impacted during SARS as consumers opted to dine at home instead. Culinary and instant food categories showed a noticeable sales increase in the 12-weeks ending May 2003. During this period, consumers also increased their purchase of Household Cleaning and Personal Cleaning products. 

Handwash was a very small category in China back in 2002. This category has become more and more popular since 2003 as consumers started to purchase more handwash during SARS. Kantar Worldpanel will continue to monitor and report the latest development of categories impacted by the novel coronavirus in 2020Q1. 

The impact on retailers

With the continuous spread of SARS, consumers chose to stock up mainly from the (neighbourhood) supermarkets back in 2003. Supermarkets and Convenience Stores showed a significant increase in sales during the 12-weeks ending May 2003.

2003 was the year when E-commerce started emerging in China. In May 10 2003 Taobao was launched, followed by 17 years of continuous growth, along with many other EC platforms.

With the high transmissibility of new coronavirus coinciding with the massive migration during Chinese New Year, the government’s public measures have also evolved in 2020 since SARS, when home quarantine was less mandatory in 2003. In 2020, we expect to see a large switch of shoppers spend to omni-channel purchasing and an increased share of EC retailers during this past Chinese New Year. The “No Physical Contact” new OTO/EC delivery model fits very well with consumers’ needs when advised to stay at home.

Devoted in understanding consumer behaviour, Kantar Worldpanel will continue to monitor 2020 coronavirus’ impact on consumers’ FMCG purchasing and we expect to see some differences this year compared to 2003 as the market and policies have both evolved. We look forward to sharing more points of view and updates with you in the coming months.

Note: *From Ding Xiangyuan