Mintel research reveals the ‘new normal’ for China’s economy and consumer markets in the post-COVID-19 era

• Economic recovery in China has been quick,  showing it remains resilient.
• The beauty and personal care sector stands out as an area of growth.
• Consumers are adapting to changes and balance is being restored to daily life.

Mintel, the experts in what consumers want and why, today launched Chinese Consumer 2020 , an in-depth analysis of the Chinese consumer market, and sixth-annual flagship report from Mintel Reports China. In this latest report, Mintel research and analysis provides a firm understanding of Chinese consumers’ shifting behaviours and attitudes during and post-COVID-19, with insight into China’s economic environment, consumer expenditure, as well as the food and drink, beauty and personal care, OTC and pharmaceuticals, clothing and accessories, technology and communication, home, transport, leisure and entertainment, and personal finance and housing markets.

Earlier today, Mintel welcomed  a number of distinguished guests to participate in a panel discussion at The Chinese Consumer 2020 press conference in Shanghai, including Ms. Elan Shou, Regional Director, Ruder Finn Asia; Mr. Kiran Patel, Senior Director, Business Development, China-Britain Business Council (CBBC); and Ms. Ruyi Xu, Head of Mintel Reports, North Asia. Each shared their views on the impact of the COVID-19 outbreak on the Chinese consumer market, including consumer attitude and behaviour changes. 

As discussed during the panel, the Chinese consumer market is facing more challenges than ever before; nevertheless, as the coronavirus situation improves, Mintel research indicates that most consumer goods categories are gradually recovering, including some discretionary categories such as dining out, clothing, beauty and personal care, and leisure and entertainment. However, this does not indicate that consumer spending will immediately return to pre-COVID-19 levels.

Key findings from Mintel’s Chinese Consumer 2020 report include:

Chinese economy recovers quickly, showing it remains resilient

The COVID-19 outbreak has had an unprecedented impact on both society and the economy, but effective anti-epidemic measures have laid a foundation for economic recovery. In mid-July, China’s National Bureau of Statistics (NBS) released preliminary accounting results for China’s GDP in Q2 2020 which showed the economy is on track to recovery. This recovery will be quicker than many other major global economies which have gone into lockdown at different stages in Q1/Q2 2020. This is another encouraging sign, showing the fundamentals of China’s economy are not only unshaken but also resilient.

Beauty and personal care sector stands out despite slowed growth in consumer spending

China’s top five sectors with the highest growth rates remained unchanged 2010-2019, including holidays at CAGR of 18%, transport at CAGR of 16.4%, OTC and pharmaceuticals at CAGR of 13.6%, foodservice at CAGR of 13.1%, and personal finance and housing at CAGR of 12.9%. However, while growth in most categories has tapered off due to slowed growth in overall consumer spending ,since 2017, the beauty and personal care sector has seen similar compound annual growth rates (CARG) 2010-19, including a 9.2% increase in 2019.

Path to recovery varies by sector

Sectors like holidays and foodservice, which require consumers to leave the home and potentially gather in small or large groups, saw reduced spending in Q1. Mintel predicts that under the current circumstances (that the outbreak is largely under control despite reported new cases), total consumer expenditure will experience a contraction of 5.6% in 2020. But, in the long term, Mintel predicts that total consumer expenditure will recover to pre-COVID-19 levels in 2021 and continue to rise at CARG of 7.3% 2021-24.

Consumers adapt to changes and balance is restored to daily life

Nearly six out of ten Chinese urban consumers (56%) want to have a happy family life and 46% seek a healthy lifestyle; meanwhile, 39% of Chinese urban consumers say that they want to travel after the outbreak, according to Mintel research.

Ms. Ruyi Xu, Head of Mintel Reports, North Asia, said, “Priorities on consumer goods categories represent key areas of consumer spending, and the coronavirus pandemic has made consumers more focused on their family and health. In particular, the consumer habit of spending within their means and a more cautious attitude towards spending as a result of the coronavirus outbreak will push brands to consider new strategies to cope with the ‘new normal’. This will be mainly reflected in helping people find a balance in life and enjoy the quality and pleasure of life through small indulgence and embracing simple moments.”

At the panel discussion, Ms. Elan Shou, Regional Director, Ruder Finn Asia, said: “Consumer mindsets and attitudes are constantly evolving in today’s ever-changing world. Consumer behaviors have shifted remarkably due to the coronavirus in the past ten months. This has also affected some sectors related to offline purchases and in-person consumer experience, such as foodservice, tourism and hotels. Therefore, how to properly understand the client’s growth pain points and innovate on communication strategies is also a manifestation of professionalism and flexibility in the public relations industry. Ruder Finn understands the importance of data analysis and offers meaningful output using data to help clients achieve their communication goals and business results.”

Mr. Kiran Patel, Senior Director, Business Development, China-Britain Business Council (CBBC), said: “In the current backdrop of the global outbreak, China-Britain Business Council has followed up with market changes in the United Kingdom and China, and actively innovated on communication platforms and channels in a bid to drive Britain-China trade with more digital solutions and assist companies in our two countries with online communication. For example, CBBC recently-launched UK-China Business Matching Digital Platform, which is set to support the offline trade show China International Import Expo (CIIE), allowing companies to highlight their core competencies on this platform and to build a big data trade ecosystem. We always believe innovation will help companies across industries stay ahead of the curve, accelerate development and win the future.”