US Insights

Epidemic impact on consumer purchase behavior

Sophie Crole

Business Development Manager - Kantar Worldpanel

Brands 02.05.2020 / 09:00

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The impact of the coronavirus outbreak has some similarities to SARS in 2003.

The country and the world have been paying close attention to the novel coronavirus outbreak in the past 2 weeks which, according to China’s National Health Commission up to 12am on 4 February 2020, has caused 20,471 infected in China (including Hong Kong, Macao and Taiwan) and 150 people confirmed infected across 23 countries outside of China*.

The impact of this outbreak has some similarities to SARS in 2003. Kantar Worldpanel China reviewed our consumer purchase data in 15 cities back in 2002-2003 to shed light on how consumer behaviour changes might bring new challenges and opportunities for manufacturers and retailers.

The impact on the FMCG market

The first SARS case was discovered in Guangdong province in December 2002 and the first reported case outside of Guangdong happened in Beijing in March 2003. However, the major increase of infection happened in April and May 2003 and the spread of the virus was contained by June.

SARS1

The impact on the FMCG market during the first half of 2003 was significant especially during April and May where we observed a sharp slowdown. However, by June the market had recovered returning to similar growth rates seen at the beginning of the year.

Categories in high demand during SARS

The dine-out market was heavily impacted during SARS as consumers opted to eat at home instead. Culinary and instant food categories showed a noticeable sales increase in the 12 weeks ending May 2003. During this period, consumers also increased their purchase of Household Cleaning and Personal Cleaning products.

Sars2

Handwash was a very small category in China back in 2002. This category has become more and more popular since 2003 as consumers started to purchase more handwash during SARS. Kantar Worldpanel will continue to monitor and report the latest development of categories impacted by the novel coronavirus in 2020Q1.

The impact on retailers

With the continuous spread of SARS, consumers chose to stock up mainly from (neighbourhood) supermarkets back in 2003. Supermarkets and Convenience Stores showed a significant increase in sales during the 12 weeks ending May 2003.

Sars3

2003 was the year when ecommerce began to emerge in China. On 10 May 2003 Taobao was launched, followed by 17 years of continuous growth, along with many other online platforms.

With the high transmissibility of new Coronavirus coinciding with the massive migration during Chinese New Year, the government’s public measures have also evolved in 2020 since SARS, when home quarantine was less mandatory in 2003. In 2020, we expect to see a large switch of shoppers spend to omnichannel purchasing and an increased share of ecommerce retailers during this past Chinese New Year. The ‘No Physical Contact’ new online-to-offline/ecommerce delivery model fits very well with consumer needs when advised to stay at home.

Devoted to understanding consumer behaviour, Kantar Worldpanel will continue to monitor the 2020 Coronavirus impact on consumers’ FMCG purchasing and we expect to see some differences this year compared to 2003 as both the market and policies have evolved. We look forward to sharing more points of view and updates with you in the coming months.

Source: Kantar

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