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The Great Wave.

China’s zero-Covid policy was abruptly terminated in early December. On one hand, it gave some relief to people who have been under strict control over the past three years. On the other hand, it has set China on a rapid course for a bumpy road ahead, particularly from now through Chinese New Year.

What we’re looking at (the short list);

A medical system that is likely not ready to deal with a surge in cases
Likely disruptions to the service sector and supply chains within the country
A return to stay-at-home activities and shopping as people stay at home not because they are forced to, but out of fear of getting sick/being sick

SHORT TO MID-TERM

According to the experience of other countries, after the pandemic prevention policy has been lifted there will be about 3 months of adaptation time. During this time, there will be significant strains on the healthcare system and economic downturns. Therefore, the period from December 2022 to February 2023 will be a critical period for domestic adaptation in China.

Right now we are seeing most people over the age of 65 choosing to stay at home as much as possible, avoiding public transportation, brick-and-mortar retail locations, and hospitals. Young people are constantly switching between work-from-home and the office, while families with children need to adapt to schools’ testing and stay-at-home requirements which includes preparing relevant arrangements for their children to take online classes at home.

Under this current situation, the business conditions of offline physical stores, shopping malls, restaurants and hotels will continue to be sluggish. Especially those businesses that serve middle-aged and elderly consumers, or those whose main source of profit is related to family activities.

Expect lackluster results during what would normally be high online consumption periods such as 12.12, Christmas, and New Year's as people’s panic spreads and concerns about the economic downturn put a damper on consumption desire.

On social media, most of the keyword searches and hot topics will be related to “fever”, “hospital” and “drugs”, which will crowd out the communication channels of most promotions. Brand content that is not in sync with the current public sentiment may also fail to achieve the expected effects.

Customer service will be strained as delivery services and business units are hit by waves of employees being sick - brands (especially those with lower product price points) should do their best to be prepared during this time so as to not lose the loyalty of customers switching to other options.

PANDEMIC-BORN MARKETING TRENDS HERE TO STAY

People's worries about health and the sense of insecurity brought about by uncertainty will not disappear in the short term. In addition, the aging of China's population will intensify in the next few years, which means that sickness and deaths related to the pandemic will continue to exist and affect public judgment.

In this case, ancillary products or activities that aid sleep and reduce anxiety will remain in strong demand for a long time to come (e.g. massage, hydrotherapy, yoga, aromatherapy, etc.).

The habit of some households hoarding daily necessities will continue (such as buying necessities for two or three months at a time, paper towels, detergent, grain and oil, etc.), but the degree of hoarding may be less than that of the previous periods during the pandemic. The reason behind it is from "preparing for lockdown” has become "preparing to be at home as much as possible”.

Outdoor activities that are not prone to excessive gatherings, such as skateboarding, surfing, fishing, etc., as well as camping and self-driving tours will continue to be popular.

Compared with the pandemic prevention period, the consumption pattern of luxury goods will not fluctuate greatly. The majority of profit will still come from brand VIP customers - High Net Worth Individuals. Ordinary consumers will adopt a "cautious consumption" attitude due to economic pressure.

CRYSTAL BALL PREDICTIONS

Hopefully, in March 2023, as most people have experienced infection and have immunity, Chinese residents will gradually enter a "coexistence period”. More and more people will start to go out for consumption and travel, and the economy will start to pick up. The government may launch a "new round of economic rescue plan” to shift their work focus to the economic aspect.

In the past three years, we’ve seen many brands and small and medium-sized enterprises withdraw from the market, and at the same time, many new brands have emerged strongly, especially in the catering, entertainment and retail industries. The pandemic is undoubtedly a reshuffle of the Chinese market, but it is undeniable that opportunities in China are still attractive to those who are eager to try.

Fighting the virus is a survival test, not just for the public but also for brands. Only those who are truly far-sighted and continuously optimized and upgraded can become the ultimate winners.

We hope that after the ups and downs in the next few months, people's understanding of the pandemic will become more rational, and the stable mentality of co-existing with the virus will eventually become the mainstream. Ultimately the market, especially the tourism industry as a "recovery signal” will prosper again. Industries related to aging solutions will become new demand growth points.

Stay safe out there, friends.

👋🏼
If you want to reach out to us about your China marketing strategy for 2023, drop us an email at hello@waisocial.com - we're always up for a chat!

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