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This report is based on China Beats, a solution for data-driven insights into the Chinese market, as well as analysis of Google search and social media data for several European countries.
It highlights the current impact of COVID-19 and provides data-driven information about its effects on consumer and business behavior.
This report is in no way intended to distract from the fact that the outbreak of the novel coronavirus is first and foremost a human tragedy affecting hundreds of thousands of people.
As the situation is evolving rapidly, please note that this page reflects the data collected up until 9 March 2020.
The outbreak of the COVID-19 virus has had a major impact on daily life and consumer behavior in China. When the epidemic peaked in China at the beginning of March, it led to the lockdown of regions and cities with a total population of 500 million people quarantined and a concurrent decline in production.
Despite the negative social and economic impact, the outbreak quickly led to an adjustment in people's behavior – from fear to action, to cope with the unexpected situation – and a shift in daily activities from offline to online.
Currently, the distribution of COVID-19 in China is beginning to stagnate. Consequently, first lessons can now be drawn from its effects and impacts, serving as a forecast for developments in Europe. Reply is able to provide data-based insights into current market developments in relation to Chinese consumer behavior using the China Beats insight tool.
In Europe, the situation is changing daily, with cases continuing to increase. One of the first and most significant lessons that can be learned from developments in China so far, is that companies with a strong digital footprint are extremely well placed to respond to changing consumer behavior – with some companies managing to very quickly secure a place among their former major competitors.
Daily life in China has been significantly impacted across the country, since 500 million people, mostly located in Hubei Province, have been under lockdown from 23 January.
COVID-19 prompts China to lock down its mega cities.
For January, which included the extended Lunar New Year holiday, the index lay at 50 (out of 100, with a value below 50 indicating a decline).
The reasons for this are considered to be the quarantine, a drop in manufacturing and limited travelling due to the extended lunar new year.
Source: WHO Novel Coronavirus Situation dashboard ; data up to date as of 17.30pm 06/03/2020; https://experience.arcgis.com/experience/685d0ace521648f8a5beeeee1b9125cd
Instead of reducing all expenditures, the buying habits of consumers have changed. Chinese consumers have switched from offline activities to e-commerce. This brings relief for the economy and sets the course for a rapid recovery.
Decreased due to epidemic
Increased due to epidemic
Source: Kantar Cross industry view on the impact of COVID in China: https://www.kantar.com/Inspiration/Retail/A-cross-industry-view-on-the-impact-of-COVID
In addition to the gains in e-commerce, Chinese consumers have also changed their habits in other areas – not all of them are to be found in the digital world.
Many Chinese stuck at home have turned to online entertainment, such as video games. Apple has seen an increase in downloads, with 222 million game downloads in the week of 2nd February, including the online game Honor of Kings, which has reached a new high in terms of average users.
Chinese digital work tools have experienced a significant increase in demand, putting network capacity to the test. DingTalk has been used to an unprecedented degree in China as many companies have asked their employees to work from home. The application jumped from number 40 to number 3 of the most downloaded free iOS app in China. WeChat Work also saw a 10-fold increase in usage from 10th February.
As public transport is limited in many urban areas, Mobike and Hellobike report an increase in trips to hospitals, supermarkets and markets (5%) and a tripling of trips over 3 km. It is unlikely that this increase will continue after the epidemic, as public transport will resume its normal service.
Since the beginning of the lunar new year, "Search" and "Social Buzz" have decreased – a typical decrease for this time, but both factors have remained low even during the long holiday period.
The automotive industry has been shaken by consumers staying away from car dealerships, with car sales falling by 92% in the first half of February.
Those car manufacturers who already have a large digital footprint, allowing consumers to view, order and personalize cars online, are seeing a payoff for their digital showrooms. Tesla remains the most sought-after car brand, but brands with a better digital retail experience, such as Baic Bjev and Jetour, are gaining ground.
Within a few days, the two brands have managed to secure a place among the Top 5 players in terms of search volume and have thus removed Toyota and Honda from their respective 3rd and 4th positions.
Jetour attracted special attention with the live streaming of the dismantling of the new JietuX96 on major Chinese online platforms on 27 February 2020.
1.88M search vol
1.51M search vol
1.27M search vol
1.23M search vol
1.13M search vol
*1 December 2019 – 15 January 2020
1.73M search vol
1.15M search vol
1.10M search vol
1.07M search vol
**16 January 2020 – 29 February 2020
At the beginning of March, while new infections in China are declining sharply, the number of cases in Europe is only just beginning to pick up speed – the only advantage is that Europe has the opportunity to learn from developments in China.
As COVID-19 spreads extremely quick.
The EU plans to allocate €25 billion to combat the epidemic and its economic consequences.
As of 11th March 2020, every country in Europe except Montenegro and Kosovo has reported at least one case of COVID-19.
The first reaction to health threats like COVID-19 is usually panic and anxiety. Over time, however, people begin to move towards helpful measures. These actions reflect the willingness of the population to respond to the crisis. The index below is calculated by comparing Google searches between action-oriented keywords (e.g. “masks”, “hand disinfectants”) and anxiety-oriented keywords (e.g. “coronavirus symptoms”, “what is coronavirus”).
Source: Google Trends - Timeline: 20 January to 3 March 2020
Basic hygiene measures such as hand washing have become commonplace in online searches. People are looking for the "right" way to wash their hands, as preventive measures and halting the spread of COVID-19 are considered by most health authorities to be the most effective way to combat it – for as long as there is no vaccine.
Source: Google Trends
To date, the “actions” of European countries have mainly revolved around the cancellation of major events such as concerts and trade fairs. Gradually, however, companies have also started to ask employees to work from home: a first noticeable effort towards social distancing and a shift of activities to the digital world. This is also clearly evident from the app downloads in Italy, Germany, France, Spain and the UK. Above all in Italy, currently the country in Europe most affected by COVID-19, solutions for remote working and education are very high up in the ranking.
The Seven Deadly Sins
Easy Game – Brain test
Amazon Prime Video
Tellonym: Honest Q&A
Parking Jam 3D
Source: Similarweb Apple store downloads per market; 4 March 2020
Italy is the European country most affected by COVID-19 and is therefore seeking measures to control the spread of the virus. In Italy, schools, kindergartens and businesses have been closed, which has led to a growing interest in online or home entertainment, education and home offices, as well as care facilities for children of parents who have to go to the office.
Source: Google Trends, 1 January – 3 March 2020
Further adaptation to the new situation can also be seen in the rest of Europe, as cancelled trade shows lead to online presentations of new product launches and football games are being played behind closed doors, only available to view on television or in live streams.
Online grocery retailer Ocado has noted "exceptionally high demand" for its delivery services in the UK as UK consumers shift their supermarket visits to the online world. The company has seen an increase in unusually large orders, with delivery slots quickly filling up and a 6% increase in stock levels.
Due to the cancellation of industry and corporate conferences, many brands had to move their product marketing launches and announcements to the Internet. One example is the Sony Xperia 1II, which was to be announced at the cancelled MWC.
Instead of postponing them, many sporting events are instead held "behind closed doors", meaning no audience is allowed in the stadiums or other sports facilities. This is the case, for example, in the Serie A, the Italian football league - fans have to be satisfied with live broadcasts of the matches.
Cisco, Google & Weschool have responded to a request from the Italian government to help continue educational activities in the face of school closures in Italy. This switch to digital tools can help to promote the digitization of Italian schools in general.
Although there is a risk of recession due to the novel coronavirus, historical data suggest that the global economy is likely to recover.
Previous epidemics, such as the SARS outbreak in 2002, the Hong Kong flu in 1968, the Asian flu in 1957 and the Spanish flu in 1918, led to a V-shaped development of economic performance, with annual growth rates absorbing the real economic shock.
Historically, crises leave a structural legacy for the global economy. SARS, for example, speeded up the introduction of online shopping in China – which helped Alibaba to become the number one Chinese online shopping company.
Many employees are being encouraged to work from home – which promotes the further development of Smart Workspaces. Many companies believe that this will be the turning point that makes remote working the new normal. The increased organization of virtual conferences will also play a major role in establishing their legitimacy. China is already exploring AR's potential for education, with a focus on how to encourage interaction between students and teachers.
Telemedicine, robotics and camera technology are now being used to treat coronavirus patients and limit the exposure of medical staff. These developments have initiated a reduction in waiting times for patients, relieving nursing staff of tasks and advancing diagnostic technologies.
The Chinese company Meituan has started piloting its driverless food delivery service in Beijing. Contactless delivery reduces the risk of infection for delivery staff and consumers alike. Companies are using the current crisis to test these technologies and promote the benefits of increased automation to consumers.