How COVID-19 Has Changed China’s E-commerce and What Can We Expect Moving Forward
While most of the Western world is still battling COVID-19, restrictions are gradually being lifted in China. Things are finally starting to return to normal, however, it’s safe to say that the effects of the pandemic will be felt for years.
For those wondering what the impact on buying habits will be moving forward, the China e-commerce market is a good indicator. What products are selling, what’s not, and can we expect these trends to continue into the future?
We’ve delved into the data to help you better prepare your e-commerce business for the times ahead.
Changes in Consumption and Buyer Behavior
To no one’s surprise, people’s spending habits in China quickly changed once the Coronavirus started to spread. Not only did people’s priorities start to shift, but the options they had for getting the items they need also started to change.
The biggest shift that’s occurred is an increase in online shopping. This is partly due to people not wanting to leave their homes, but also due to many brick and mortar stores being forced to close because of the pandemic.
As the above statistics show, almost every category has seen an increase in online purchases, with the largest gains occurring in hygiene and household cleaning products. Books and video has also seen an increase.
Consumption data shows that the demand for beauty products has dropped dramatically while essential items like hygiene and cleaning supplies have experienced a boost in sales.
Many news outlets in the West were reporting surges in demand for toilet paper, but that doesn’t seem to be the case in China as reports indicate consumption of personal care items has stayed more or less the same.
One category that has seen its sales plunge is sports shoes and hiking equipment.
Sales in this category saw losses of up to 50% as people were ordered by the government to stay home as much as possible. While restrictions are beginning to be lifted there is still a great deal of concern around the virus, so we can likely expect this trend to continue for a while longer.
With most brick and mortar businesses forced to close a number of everyday items that are traditionally bought in person have experienced big spikes in sales.
Items like hair clippers and pajamas saw their online sales more than double after people were forced into isolation. It will be interesting to see whether these products continue to be purchased online or if consumers return to buying them at local stores.
With many people concerned about food shortages, online demand for fresh produce increased dramatically when the pandemic was at its peak.
As the spread of the virus subsided so too did the demand for fresh produce. It’s yet to be seen if the demand online for fresh produce will completely return to normal.
Many brands were quick to adapt to the changing conditions and started to focus more on e-commerce, social, and O2O sales. This served many companies well, making online strategies even more important.
So is this what we can expect for the future or will buying habits eventually go back to what they were before COVID-19?
Expectations for the Future
The pandemic has changed things for everyone, there’s no doubt about that. But what changes are permanent or long-lasting, and which ones are only temporary?
A recent survey indicates that for most Chinese citizens, their consumption habits will return to normal after the crisis is over.
That being said, 25% have reported that they will consume less or a lot less than what they previously did. This likely has to do with the fact that 34% of people said back in February stated they could only last one more month given their current financial situation.
With isolation forcing many companies to lay off workers there’s a large chunk of the population who have been hit hard financially. Even as people start to go back to work it will take time for many of them to recoup those losses. This means that there might be less demand for more expensive luxury items.
One thing that has changed for sure is what consumers value in a product.
As we can see, more people are concerned about their health and the environment than ever before. While consumer attitudes were trending this way previously the recent pandemic has even more people considering these factors. Moving forward, we can expect products that promote a healthy lifestyle will increase in popularity.
The big trend that e-Commerce businesses will be looking at is the increase in online sales. Will this large surge be maintained or will sales return to pre-virus levels?
What we need to remember is that even as restrictions are being lifted people are still being cautious, with a number of citizens concerned about a potential second outbreak. What this means is that even if the current trends aren’t permanent we can expect them to last a while longer.
It’s possible that until a vaccine is developed e-commerce sales will continue to remain high as people try to limit their contact with others. And even after concerns about the virus are gone, it’s likely that many new people have now been exposed to the convenience of online shopping platforms, resulting in continued growth for e-commerce in China.
Overall, we should expect consumer behavior to return to normal eventually. But it’s going to take time so e-commerce businesses should plan accordingly to ensure they put themselves in the best position to succeed.
When it comes to Chinese consumer habits, they’ve certainly changed over the last few months and they’ve likely been altered for the long-term as well. Anyone who hadn’t realized how convenient e-commerce shopping is has certainly realized it now. For many people, buying products online is the new normal and it could very well stay that way moving forward.
So, post-COVID-19 we should see a continued boost in online sales. That being said, the spike in demand seen at the peak of the outbreak is unlikely to be sustained long-term.