Managing Director & Senior Partner
From France to China to India to the US, we are a global community at home. Hunkered down in our rooms, we are collectively fighting a virus that we are still learning about—and as consumers, we are changing our day-to-day behaviors in the face of government orders and advisories and continued increases in confirmed COVID-19 cases.
In recent weeks, as China’s reported cases have flatlined, infections in other countries surveyed have steadily climbed, at an average daily growth rate of approximately 18%1 Notes: 1 Reflects the average daily growth rate (rounded up from 17.73%) for the countries other than China in this study: Canada, France, Germany, India, Italy, the UK, and the US. since our last survey period. During the period, from March 17 to April 3, cases in Italy increased at the lowest rate (8%) while cases in the US rose at the highest rate (28%).2 Notes: 2 Numbers of cases are based on World Health Organization Situation Reports, China State Council, and National Health Commission of the PRC. (See Exhibit 1.)
Consumer sentiment has grown more pessimistic in the US, France, and UK as the numbers of confirmed cases in those countries have increased. Although the number of cases in Italy has continued to rise, the lockdown there seems to be inspiring some confidence that light at the end of the tunnel may now be in sight. In our most recent survey, 8% fewer Italians say they believe that the worst impacts lie ahead than did two weeks ago. Sentiment in China is the most optimistic, with only 40% of consumers now believing that the worst is still ahead, compared with 75% or more of consumers in other countries. (See Exhibit 2.)
While concerns over becoming infected with COVID-19 as a result of engaging in travel or in certain everyday activities continue to increase in the Western world, they are starting to decline in China. (See Exhibit 3.)
In India, negative consumer sentiment is disproportionate to the level of COVID-19 infections. Despite the disease’s relatively late onset in the subcontinent and the as-yet relatively low number of cases there, Indian consumers are as concerned as their US and European counterparts. In India, 87% of consumers said they are practicing social distancing, and 84% said they fear an economic recession. These high levels of concern likely reflect the swift, full lockdown of the country that the Indian government imposed on March 25—in the midst of our survey period—underscoring the gravity of the situation. (See Exhibit 4.)
Despite the sometimes sharp differences in global sentiment, the virus continues to affect consumers’ spending behavior in similar ways across the world, as we have documented in previous Snapshots. (See Exhibit 5.)
Consumers in most countries continue to plan to decrease their spending in more product and experience categories than they intend to increase their spending in—except in China, where consumer optimism continues to recover from its earlier nadir, and in India, where consumers anticipate a more balanced split of spending decreases and increases across categories. (See Exhibit 6.)
In fact, fewer consumers in India and China than elsewhere plan to maintain their current levels of spending—and in areas where they intend to increase spending, the magnitude of the expected change is larger than among consumers in developed economies. (See Exhibit 7.)
Looking more closely at India, we see meaningful differences in spending that reflect the country’s large income disparities and diverse demographics—features that are common in emerging markets. Specifically, lower-income and younger consumers show a higher propensity to plan to reduce their spending, while older and higher-income groups exhibit more resilience and are more likely to expect to maintain or increase their spending. (See Exhibit 8.)
Much as we saw in China during the SARS epidemic of 2002 to 2003, the pandemic appears to be driving a step change in online shopping across categories in emerging markets such as India, even in traditionally offline categories. (See Exhibit 9.) We are also observing accelerated online penetration in developed markets, particularly in older age groups.
As consumers around the world continue to cocoon at home, many of them are finding ways to use the time beneficially—investing extra time in hobbies, exercising, or spending time (virtually or in person) with family and friends. Most of them plan to return to normal spending once the virus is under control. (See Exhibit 10.) Although this widespread intention gives us hope for a solid recovery, the length and difficulty of the battle against COVID-19, as it plays out, will undoubtedly have a huge influence on national economies around the world—and in turn, on future real-world consumer spending.
In our next snapshot, we will assess the latest differences in consumer sentiment and spending behaviors across the globe, and look at the impact of COVID-19 in additional emerging markets.
BCG’s COVID-19 Consumer Sentiment Snapshot series is based on data drawn from an online survey of consumers that is conducted every one to two weeks across multiple countries worldwide. Each Snapshot highlights a selection of insights from a comprehensive ongoing study that BCG provides to clients. The survey is produced by the authors, who are members of BCG’s Center for Consumer Insight (CCI), in partnership with coding and sampling provider Dynata, the world’s largest first-party data and insights platform. The goal of the research is to provide our clients and businesses around the world with periodic barometer readings of COVID-19-related consumer sentiment and actual and anticipated consumer behavior and spending to inform critical crisis triage activities, as well as rebound planning and decision making. The research does not prompt consumers about the virus when asking many of the key questions, including questions about spending changes in the next six months, in order to avoid biasing the results. A team composed of BCG consultants and experts from CCI completes the survey analytics.
We appreciate the generous support provided by the following people in producing this research and associated article series:
We also thank BCG’s Center for Customer Insight (CCI) team globally, Scott Wallace, and Dynata.
Boston Consulting Group’s Center for Customer Insight (CCI) applies a unique, integrated approach that combines quantitative and qualitative consumer research with a deep understanding of business strategy and competitive dynamics. The center works closely with BCG’s various practices to translate its insights into actionable strategies that lead to tangible economic impact for our clients. In the course of its work, the center has amassed a rich set of proprietary data on consumers from around the world, in both emerging and developed markets. The CCI is sponsored by BCG’s Marketing, Sales & Pricing practice and Global Advantage practice. For more information, please visit Center for Customer Insight.
Dynata is the world’s largest first-party data and insights platform. With a reach that encompasses 62 million consumers and business professionals globally, and an extensive library of individual profile attributes collected through surveys, Dynata is the cornerstone for precise, trustworthy quality data. The company has built innovative data services and solutions around its robust first-party data offering to bring the voice of the customer to the entire marketing continuum—from strategy, innovation, and branding to advertising, measurement, and optimization. Dynata serves nearly 6,000 market research, media and advertising agencies, publishers, consulting and investment firms and corporate customers in North America, South America, Europe, and Asia-Pacific. Learn more at www.dynata.com.