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February 21 2020

COVID-19 Crisis: PHD China Update Briefing 21st February

Industry Insights Our Views

How are Chinese consumers and businesses further adapting to this unexpected extended stay at home?

The fifth week of the COVID-19 outbreak crisis has seen the numbers of the newly infected dropping, with cities and regions outside Hubei province recording fewer new cases than previously. Daily life outside Hubei province is on a slow return to normal, but a significant majority of people are still working from home with retail and food businesses continuing to implement shorter working hours.

Sharp increase of paid subscriptions leads to online video services overload
Compared to the period before the epidemic, online video services iQiyi, Mango TV and Tencent Video have seen a paid subscription increase of 1079%, 708% and 319% respectively. iQiyi also reported that their users in average are spending over three hours per day on their platform. The sharp increase of online traffic even led to iQiyi’s and Xiaomi TV’s platform temporary collapse through bandwidth overload on February 16th!

Cloud-based office services have attracted an unexpected audience
Two key cloud-based office services, Alibaba-owned Ding Talk and Tencent-owned WeChat for Work, are seeing a sharp increase of users due to the significant number of people working from home. However, they have also attracted and unintended audience – Chinese students! With most schools being temporarily closed and the government launching study-from-home initiative (called in English, “Classes are suspended, but don’t stop studying!”), many teachers are using the two platforms to move their classes online to keep the impact of school closure to a minimum. That has led to a large number of students, annoyed that they have to continue to study, leave seemingly flattering reviews of the platform, and giving both platforms one star rating. This became such a big issue that Alibaba even used its Ding Talk’s logo, an animated bird, to appeal to the students for mercy and ask them to stop leaving poor reviews.

Education apps have also seen a continuous rise
According to Quest Mobile, the number of daily active users (DAUs) of education apps in China has risen to 127 million, versus 87 million before the epidemic outbreak, with students spending almost 37 minutes daily on these platforms. DAUs of WeChat’s education Mini Programs has also risen from 6.12 million before the outbreak to 19.47 million this week.

O2O fresh produce delivery continues to grow
Fresh produce platform Dingdong Maicai saw their sales increase almost 400% during the Chinese New Year period, with the single transaction volume increasing by 70%. Their competitor Meiri Youxian reported similar growth numbers. Daily transaction volume for fresh produce on WeChat Mini Programs grew 149%, while social commerce in the same ecosystem increased 322%. Alibaba-owned C2C eCommerce platform Taobao launched an online “Foodie help farmers” (吃货助农) campaign to help farmers sell unsold produce directly to consumers. Their key competitors, and Pinduoduo, quickly launched similar activities.

Restaurants and catering services rely on third-party delivery services more than ever
With most consumers staying at home and restaurants being forced to limit their operations in order to ensure that the epidemic is contained, food delivery services are being seen as a bridge that helps restaurants maintain their operations to some extent and allows consumers to order their favourite food from the comfort and safety of their homes. By 18 Feb, a leading food delivery app Eleme saw more than 100,000 new restaurants registering their accounts on the platform.

Nationwide cook at home!
Staying at home has led to many consumers turning to home cooking and browsing cooking apps for recipes and advice. According to Quest Mobile, cooking app Xiachufang saw the online traffic during Chinese New Year growing by 37%, while cooking content on social platform Weibo reached over 360 million views and 95,000 comments.

Online sales of instant food increase
During Chinese New Year period, Alibaba’s Tmall and their competitor saw the sales of instant food such as instant noodles, frozen dumplings and DIY hotpots, growing 700% and 350% respectively, presumably as people stockpiled long-life food in fear of a limitation of fresh produce during the virus outbreak. According to machine learning and analytics consultancy Zectr, a significant number of Chinese consumers expect their lives to completely go back to normal by the end of June or even July, so the increased purchase of instant food that be kept for an extended period of time might reflect this sentiment.

Brands turn to engage media formats
Major brands such as BMW, Nike, Porsche and Fosun have launched their own live-streaming shows, dedicated to delivering the key communication message in more entertaining and engaging formats such as talk shows and mini-courses.

What should brands consider for marketing and communications during the COVID-19 crisis?

  • Be sensitive in brand messaging
  • Focus on direct consumer benefits of your product or service
  • Consider the higher media consumption during this time as a potential opportunity
  • Understand the sales conversion challenges with reduced availability and fulfilment
  • Consider giving back to the community

Visit our WeChat to view last week’s advice and detail on the recommendations for managing communications during this period.

Thanks to the PHD China Strategic Insights team for contributing to this article.

We are providing a weekly update on the impact and implications for this current health crisis. If you have questions or suggestions, please feel free to email us at:

Mark Bowling – CSO PHD China or Vladimir Prostran – Group Director Strategic Insights PHD China

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