Managing Director & Partner
BCG’s first Consumer Sentiment Barometer in April looked at common consumer trends seen in emerging markets during the COVID-19 pandemic. One month later, we take a second look to see which trends have held strong and which have evolved. The COVID-19 crisis has deepened in most emerging markets—with the exception of Vietnam and China, where lockdowns have eased. Still, several of the trends we identified in April have endured and, in some cases, intensified. Important shifts in consumer thinking and behavior are becoming apparent as the pandemic moves through distinct phases in individual markets. Overall, the resilience of the emerging-market consumer is encouraging.
Here are the headlines. Although consumers continue to have substantial fears, optimism improves quickly and markedly in markets that have made the transition from flattening the spread of the virus to fighting their way out of the crisis. (See Slide #1 in the slideshow below.) In general, consumers in emerging markets remain far more optimistic about the economic outlook for their countries over the next 12 months compared with those in mature markets, which may be one reason that emerging-market consumers continue to exhibit much stronger intentions to increase spending. (See Slides #2 and #3.) Although other factors may keep emerging-market economies from bouncing back, such as a flight of foreign investment, the consumer optimism is a good sign.
The substantial similarities in categories in which consumers expect to spend more are still evident across a wide variety of markets. These include fresh foods, vitamins and supplements, food delivery, and in-home entertainment. (See Slide #4.) We believe some of these new spending patterns reflect shifts in priorities and behavior that will endure beyond the recovery. For instance, cocooning behavior continues in China, where consumers are still cooking more at home despite the easing of lockdown restrictions; restaurant sales remain 40% below pre-COVID-19 levels. Underscoring this point is the definitiveness with which emerging-market consumers view each product category. (See Slide #5.) Unlike shoppers in developed markets, emerging-market consumers expect to either increase or decrease spending in almost all categories—they aren’t ambivalent about many.
BCG’s COVID-19 Consumer Sentiment Barometer seeks to understand the pandemic’s effects on spending intent, attitudes, and daily routines across 17 mature and emerging markets. New research will be published periodically on the basis of responses from more than 20,000 consumers altogether. The mature markets are Australia, France, Germany, Italy, Japan, Singapore, the UK, and the US. The emerging markets are Brazil, China, India, Indonesia, Malaysia, the Philippines, South Africa, Thailand, and Turkey. The survey covers nearly 50 categories in financial services, consumer products, durable goods, entertainment, retail, telecommunications, and travel. Each edition will likely focus on a subset of the data.
In just about all emerging markets, a strong multicategory acceleration in the shift toward e-commerce channels continues. (See Slide #6.) Digging a little deeper, our examination of developments in individual markets shows a surge in the use of social and “conversational” commerce, driven by “gig” entrepreneurs who leverage their personal reputations, networks, and knowledge to push products using such channels as WhatsApp, WeChat, and Facebook. (See the results from China and Brazil below.) Among generational groups, Gen-Z and those over age 40 are the most pessimistic about their spending outlook. This may reflect fresh graduates seeing limited employment prospects and middle-aged consumers feeling squeezed between their children and their aging parents. (See Slide #7.)
You can explore all this data in the slideshow below.
Emerging markets are far from homogeneous, of course. Here are some particular developments in six markets and regions.