As Chinese people were urged to stay at home amid the novel coronavirus (COVID-19) epidemic, the “homebody economy” became the new normal, as a growing number of people shopped, studied, worked and found entertainment online at home. In addition to re-shaping consumption trends, staying at home—in concert with the government’s health and safety initiatives— has given consumers a renewed sense of confidence in the country’s overall recovery efforts.
“The Chinese government rapidly responded to the epidemic by rolling out a series of comprehensive health and safety measures, effectively containing the virus,” said Justin Sargent, president of Nielsen China. “The moves have greatly strengthened the Chinese people’s confidence in overcoming the crisis.
“Although home quarantine restricts people from going out, it makes staying at home a new way of life, and thus boosts the homebody economy. Online shopping, online education and working from home have developed rapidly. As such, consumers have quickly adapted to the situation in order to meet daily needs such as staying safe or for shopping, as well as for personal leisure.”
Online channels deliver confidence in information and daily necessities
As efforts within China have gradually improved the COVID-19 situation, new research from Nielsen highlights positive consumer sentiment about conquering the epidemic. According to findings from the company’s “homebody economy” survey, 92% of respondents expressed confidence in China’s victory over the outbreak. Their confidence is based on the Chinese government’s appropriate preventive and control measures, as well as its timely and transparent disclosure of information. The survey found that 82% of consumers approve of the way transparent information was disclosed during the epidemic.
With Chinese consumers at home checking their mobile phones more frequently than ever for news—including older generations—and with a renewed reliance on social media for faster, more trustworthy information, brands looking to engage with consumers should allocate additional efforts toward the home. While the trend towards online and social media is not new, the transition away from traditional media is now even more pronounced.
Additionally, online to offline (O2O) and fresh food channels grew significantly in importance during the outbreak, with the entire country shopping from home for fresh food and delivery meals, as well as safety materials such as masks. The efficiency of these platforms to deliver from local retailers and suppliers quickly, often within the hour, helped to ease the stress of the situation. Again, older generations that previously relied on wet markets or local retailers for fresh food will likely shift their behaviors going forward, at least to some extent. This presents new marketing and engagement opportunities for brands looking to broaden their customer bases by fortifying new relationships that germinated during the outbreak.
Despite being quarantined at home, Chinese consumers maintained their desires for fresh products during the epidemic. Nearly 70% of the respondents purchased daily necessities / fresh products more than twice a week, and over 80% of them shopped online. This also opens the doors of opportunity to retailers looking to offer a sense of convenience to consumers even after the pandemic subsides. And from previous research, we know that consumers are willing to pay for convenience. In fact, 89% of the respondents said they will be more willing to buy daily necessities / fresh products online once the pandemic is over.
While large retailers and e-commerce sites ran out of some items, O2O platforms provided another resource that also supported local retailers suffering from reduced foot traffic. Retailers and manufacturers may consider a larger reliance on O2O platforms for local delivery in the future, potentially shifting some demand away from China’s other e-commerce giants.
Health and tech-driven homebody economy grows from the epidemic
According to Nielsen’s research, we expect consumer attitudes toward increased health and wellness to remain heightened well after the pandemic ends. In fact, 80% of survey respondents said they will pay attention to eating healthy even after the epidemic is over. Seventy-five percent of the respondents said they would spend more on sports / fitness in the future, while 60% of them said they would increase spending on regular medical examinations. Brands that focus on health and safety concepts in the future are likely to see strong demand from consumers who see a renewed sense of importance in staying healthy.
Despite office and school closures nationwide, the research highlighted that most Chinese consumers actually had a very positive outlook about both working and studying from home during the epidemic. In fact, 94% of the respondents held a positive / neutral attitude toward home office, while 83% of them believed that working from home was as efficient as being in the office.
The demand for online education also surged, not only among students, but from the general public as well. The survey showed 93% of consumers had a positive / neutral attitude towards taking online courses and regarded it as a routine “source of happiness.” Fifty-five percent of them considered reading as an entertainment activity, while 81% took online courses to recharge themselves while at home.
Moving forward, online learning and education for the general public and those already well into their adult careers could be a significant opportunity for a number of industries. The underlying demand of consumers to grow and create a positive impact with their down time is clear.
“We have seen China’s rising awareness of fitness for some time now;, however, increased health consciousness under this epidemic is markedly different,” Sargent said. “We see that consumers’ understanding of health is more multi-dimensional.
To keep fit and healthy at home, homebodies have embarked on a buying spree of smart health products. Nielsen found that 90%, 93%, and 77% of the respondents have already purchased or plan to buy air purifiers, water purifiers or smart fitness bracelets, respectively.
“Consumers who previously were more conscious about traditional areas like safe hygiene and healthy eating, are now further adopting technology-enabled smart health,” Sargent said. “The current situation has quickly raised awareness of health concepts as well as tech-enabled health and fitness, breaking traditional boundaries and linking technology with this new home life situation.”
“Brands and retailers that focus their efforts on this quickly emerging health trend are likely to see consumers respond with increased demand during the epidemic. Hygienic and safe product concepts, as well as tech-enabled health, will help brands resonate with consumers during this period.”
The Nielsen study also found that during the epidemic, contactless services such as telemedicine and VR / AR were top of mind for Chinese consumers. Homebodies embraced technology products with a more positive attitude. Ninety-three percent of the respondents were willing to buy 5G mobile phones, and 67% of them believed that VR / AR devices can be used in virtual shopping scenarios in the future.
The homebody economy could lead to an acceleration towards some of these technologies and could be an opportunity for brands to engage, especially for retail and leisure activities now limited by the epidemic.
The Nielsen survey also showed that women were more concerned with smart and technology products than men. Generally, compared with men, women had stronger willingness to buy intelligent products, ranging from such home accessories as smart speakers and home theater to big-ticket items like smart vehicles.
Brand owners grasp opportunity brought by homebody economy
The COVID-19 outbreak rapidly changed people’s lives and consumption habits, and many of these behaviors will have lasting impact. The rise of the “homebody economy” should be a signal to manufacturers, retailers as well as across industries, that people can and will quickly adapt to online channels, O2O services and accelerating multi-channel integration.
The popularity of online services like shopping for fresh food, cloud office, and online education has risen fast. In the post-epidemic era, brands in these sectors need to push such an advantage, upgrade rapidly, and ramp up efforts to acquire new customers while stabilizing the existing customer group.
Additionally, brand owners should pay attention to consumers’ expanding demand for smart devices and health products. Issues that brands and retailers should consider include how they can seize this trend regarding new consumption, explore and unleash spending power, launch new products and services that are compatible with tech-driven and health concepts, and expedite brand upgrades.
“The COVID-19 epidemic is quickly revolutionizing how Chinese consumers think about their health, as well as changing their purchase behavior and the channels they are using to shop. It is both a challenge and an opportunity for brands and retailers. With the advent of 5G, AR, artificial intelligence, and a shifting market environment, brand owners should be continually embracing change while exploring new business strategies,” concluded Sargent.