Published weekly, our COVID-19 Consumer Sentiment Snapshot highlights information drawn from a BCG consumer survey that we execute at one- to two-week intervals with our coding and sampling partner, Dynata. Our goal 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.
Stay-at-home orders and increasingly restrictive lockdowns continued throughout the world last week, as COVID-19 cases steadily increased in countries across the globe—in most countries, but not China.
What drove containment in China? One can speculate that it was the quick, bold actions the government took. Schools were not reopened following the winter break. More than 80 cities were locked down within three weeks, including Tier 1 cities such as Guangzhou and Shenzhen. In many cities, the government implemented and monitored a system of in-and-out passes. (See Exhibit 1.) But whatever the drivers may have been, three months after the initial outbreak, the tide has turned in China.
With the worst of its COVID-19 outbreak now in China’s rearview mirror—at least for the moment, and hopefully for the long term—we are seeing glimmers of potential economic recovery in the country: as of March 17, 99% of industrial businesses there have resumed operations. (See Exhibit 2.)
Travel, retail, and service businesses have been reopening as well, with most hotels, restaurants (including dine-in), and shopping malls now open for business. (See Exhibit 3.)
That said, China is ramping up thoughtfully—likely with an eye toward preventing any resurgence in cases. For example, consumers’ body temperatures are measured before they are allowed to enter most supermarkets, restaurants, office buildings, and other public places. Central air-conditioning is prohibited in many commercial areas, and the State Council has released detailed guidance on how to avoid virus transmissions through central air systems. Delivery personnel are not permitted in residential areas. Instead, deliveries go to designated pickup points in each community to avoid close contact. Many food delivery providers also attach “safety assurance cards” to each order, tracking and recording the body temperatures of cooks and delivery personnel. Restaurants have moved their tables in restaurants farther apart. In Shanghai, most companies have resumed business operations in a phased manner, allowing one-third of employees to return to the office for one to two weeks, then half of employees to return for one to two weeks, and then all employees to return.1
In concert with the positive economic indicators in China, consumer sentiment appears to be more optimistic there than in other countries. In our survey, 38% of Chinese consumers said they believe that the worst of the virus is over and 43% said they think China is safer from the virus than the rest of the world. (See Exhibit 4.) These statistics are up to ten times higher than the corresponding numbers in the US and Europe.2 It also appears that consumers in China are adjusting to a new normal, as they express greater optimism about the virus even though concerns and behavior changes remain. For example, most Chinese consumers still say they are changing their daily lifestyle due to the virus (87%) and avoiding public spaces (93%).
Greater optimism in China is translating into a shift in expected spending there. For example, consumers in China expect to increase their spending over the next six months in far more categories than consumers in the US do. (See Exhibit 5.)
In fact, consumers in China express a much greater intention to spend than do their counterparts in either the US or Europe, across the board. (See Exhibit 6.)
Nevertheless, we see consistency in the spending categories that consumers across different countries identify as those they are likely to spend significantly more or less on. Preventive health care, fresh and organic foods, and savings top the winners list, while travel, restaurants, and luxury and fashion are the most frequently identified losers across the countries we surveyed. (See Exhibit 7 and Exhibit 8.) Despite the positive signs of improving consumer sentiment and economic activity in China, the same three categories—travel, restaurants, and luxury and fashion—continue to be top losers, indicating that those categories may recover more slowly than others, not only in China but throughout the world.
Even as COVID-19 continues to spread throughout the world, the signs of recovery in China give the rest of the world a glimpse of a better tomorrow—and grounds for guarded optimism. Only time will tell how long it will take for life to fully return to normal in China and whether there will be a resurgence of coronavirus cases and lockdowns at some point. It is also difficult to predict whether other countries can replicate China’s timely economic recovery from its initial outbreak. Beyond the beneficial actions that China’s government has taken, some fortuitous advantages within Chinese culture may have played a part in its swift rebound. For example, a savings-first mindset may have enabled consumers to return to their normal spending levels more quickly than people elsewhere can. Also, a cultural reliance on multigenerational family units implies greater access to at-home childcare, which may have helped workers sustain their productivity despite school closures. But regardless of the drivers, the rest of the world now has an encouraging example to look toward as regions, countries, cities, and local neighborhoods await their turn of the tide.
In our next snapshot, we will look at the impact of additional stay-at-home orders and lockdowns in multiple countries around the world.
BCG’s COVID-19 Consumer Sentiment Snapshot is based on data drawn from an online survey of consumers in five countries (China, Italy, France, the UK, and the US) that is conducted every one to two weeks. The survey is produced by the authors, who are members of BCG’s Center for Center for Customer Insight (CCI), in partnership with coding and sampling provider Dynata, the world’s largest first-party data and insights platform. 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.
This article features a snapshot of insights from BCG’s COVID-19 research study. You may secure the full results of this study, when they become available, from the authors.
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—and for this article, special thanks to Roger Hu for his immense contributions to our work in China.
The 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.