Boost to city night economy, 7 years-worth of COVID-19 related content uploaded, contactless elevators become ‘a thing’ and fresh air at last…!
In the seventh week of the COVID-19 outbreak crisis, the number of the newly infected in China is continuing to drop with most employees outside Hubei province going back to work. This is reflected in rising traffic flow and an increase in daily metro passengers in Beijing, Shenzhen, Shanghai and Guangzhou, with the last two recordings over 2.5 million commuters each on 28th February.
With regular life starting to get back to normal, what has our PHD China Insights team uncovered this week?
What’s not good for the economy is good for the environment. Due to industry standstill, pollution in China this year has hit record low levels, with the sharp decline of coal consumption (by 36%) contributing to a reduction in carbon dioxide released into the atmosphere of around 25%.
Shanghai is planning on introducing 24-hour commercial areas in an effort to offset the impact brought by the COVID-19 epidemic. Shanghai’s Commission of Commerce has announced it would make efforts to promote night-time economy, tax-free shopping economy, platform economy, brand economy (branding Shanghai as the right place to do business) and first store economy (positioning the city as one where large business and brands launch their first stores in China or globally) while expanding the spillover effect of the annual China International Import Expo (CIIE).
Car sales have taken a massive hit, adding to struggles the industry was already facing. As life appears to be returning to some normality however, prospective car buyers should be able to find good value, because China’s Vehicle Inventory Alert (VIA) index reached 81.2%, far beyond the warning line of 50%, impacted by a drop in new car sales of 92% in February. VIA index refers to the percentage of auto inventory versus production – if a market exceeds 50%, this shows an auto sales crisis.
Face masks might become a norm for wait staff in China even after the virus outbreak is fully contained. Almost 49% of consumers stated they expect they will pay attention whether restaurant staff are wearing protective masks even when the epidemic is over.
An attempt to commercialize a tragedy receives a backlash. Fuchatang, a Changsha-based eCommerce company, tried to register a Li Wenliang trademark. Li Wenliang was an ophthalmologist who first alerted his peers about the new, SARS-like virus (later named COVID-19) and died after he contracted the virus. Hailed as a hero by many, it is not surprising that mainstream media and netizens slammed Fuchatang for trying to commercialize a tragedy. Needless to say, the trademark registration application was promptly rejected.
Interest in opening a stock trading account grows sharply. Since 03 Feb to 16 Feb, Baidu Index showed a sharp upward trend of searches into stocks and opening of trading accounts (up to 300%), with Wuhan-based netizens topping the list in the early period (until 12 Feb). Interest was also translated to action: to 22nd February, stock markets in Shanghai and Shenzhen received RMB 117bn in new funds.
Contactless, voice-led elevators appear. A China AI startup named Yunzhisheng has launched a contactless, voice-led elevator solution that will help passengers avoid touching the buttons and thus prevent potential spreading of infection. Users can use their voice to get to the desired floor or a WeChat mini program which serves as an elevator remote control.
Seven years-worth of COVID-19 related video content was uploaded to online video platform Bilibili between 18th January and 18th February this year.
Valentine’s Day online concert success. Online video platform Bilibili organized a paid online music event called “Heartbeat Concert” for Valentine’s Day and generated RMB 65K in sales revenues.
Unmanned retail surges. Before the virus outbreak, the unmanned retail store model was struggling to attract a significant number of shoppers. However, with the epidemic leading to a need to reduce direct contact with other people, unmanned retail businesses have seen a significant sales increase. Daily shoppers per store have crossed the 100 marks, and largest order sizes have increased from <RMB 300 to RMB 800 and frequency reaching 6 times a week, up from the previous 4 times. The share of food items per average order has increased from 20% to 35%.
20,000 concerts, dance shows and theatre performances have been cancelled across China from January to March, leading to a revenue loss of over RMB 2 billion.
Travel industry takes a massive hit. During Chinese New Year, China’s travel industry saw a 41% drop, and the cancellation of 25,000 weekly flights in the first three months is estimated to have caused a loss between USD 4 to 5 billion, dropping by 19.6 million passengers.
Online sales of in-home work-out equipment have surged. Wall pulley systems, rowing machines and yoga mats have surged 109%, 134% and 150% respectively through online platforms.
Sales of imported beauty technology products on Alibaba’s eCommerce platform TMall International have also seen a sharp increase – by 459%. These products allow consumers a to conduct their own ‘semi-professional’ cosmetic treatments in the comfort of their homes. With the absence of Chinese tourists around the world, the number of international brands launching online stores China’s eCommerce platforms specialized in imported products such as Tmall International has also surged by 327%, with 200,000 new products being listed for sale in the past two months.
Average salary offers increase for new hires, but the number of openings drops. According to Zhilian, a job-hunting website, after Chinese New Year the average salary offer increased by 14.5% to RMB 9311.00 per month but the number of new openings available for was significantly reduced.
Virtual real estate takes off. To allow potential buyers see apartments and houses available, real estate company Hengda has launched a VR system that allows users to virtually visit the property for sale.
Sources: Shanghai’s Commission of Commerce, WIND, China Association of Metros, Guotai Securities, Civil Aviation Administration of China (CAAC), OAG, IATA, Tmall, Baidu Index, Sina Finance, China Passenger Car Association (CPCA), China Association of Performing Arts, Bilibili, Zhilian, Hengda
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.
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