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Charting the Long-term Impact of COVID-19

September 23, 2020 | Share this article
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It has been 2 months since the initial outbreak of COVID-19 pandemic in Wuhan, China. With China now over the hump in its battle against the virus, life is starting to return to normal. Unexpectedly, however, coronavirus has since spread to 152 countries, disrupting work and life everywhere with no end in sight. All tentpole cultural events have been canceled or postponed — even the upcoming Summer Olympics has to be delayed till next year. All things considered, COVID-19 is going far beyond what we’ve expected. It seems the battle won’t be quickly settled, as many recognize the possibility that this pandemic could last at least for a year.

In the past 60 days, we’ve seen numerous reports covering COVID-19’s effects on marketing.  As strategists, we want to look at things from a different angle. As the situation is changing every day, we can’t simply chase after the latest data points and react to the market, which would be ineffective. What we intend to do in this series is to discuss the cause and effect behind these changes, gauge their future directions, and use the foresight to guide and prioritize our strategic choices.

In the midst of a fast-changing crisis, no one has all the information, and no one should try to play oracles of the market.  We hope that through our observations and insights, we can inspire our marketing partners and make them think differently. As the saying goes, in the midst of every crisis, lies great opportunity. The important part is having the foresight to identify the opportunity and take appropriate actions.

COVID-19: Decidedly Not SARS 2.0

Many articles have referred to the 2003 SARS outbreak as a benchmark to predict the implications and aftermath of this epidemic, but given the severity of this global pandemic, that no longer seems an appropriate baseline for comparison. It is time that we recognize the fact that this pandemic is leading the global economy into uncharted territories and its impact on our way of life will be unprecedented.

First of all, COVID-19 is far more dangerous than SARS. Although the two viruses genetically belonging to the same family, COVID-19 is much “sneakier” than SARS with a longer incubation period is longer and ability to spread via asymptomatic carriers. Also, COVID-19 is mutating much quicker than SARS: so far scientists have tracked 149 mutation points in its DNA, spouting two subspecies that are even more contagious.

In addition, China’s connection with the world economy in 2003 is incomparable with where things are today. In 2003, China has just joined the World Trade Organization (WTO); in 2020, China, as one of the pivotal parts in the world production chain, has developed a mutually dependent relationship with the rest of the world.

In the early stage of the COVID-19 outbreak, the world worried about China’s ability to fulfill orders as many factories are shut down. Now, as Europe is also implementing lockdowns, it’s China’s turn to worry. As disruption ripples across the world, it affects not just the manufacturing sector but also consumption demands all over the world.  Chinese consumers are anticipating a shortage of imported goods in the coming months, while Chinese workers in factories are anxious about keeping their workload full. As a Chinese netizen joked, “We are all grasshoppers on the same string.”

Back in 2003, our technological toolkit was not as advanced either. During the SARS outbreak, ecommerce was still absent, which contributed to a sense of deprivation during the outbreak and later spurred a wave of compensational shopping. Today, however, online shopping and telecommuting have become a part of everyday life for consumers in China and worldwide. So that wave of compensational spending will likely move towards non-retail categories.

COVID-19’s Wide-Ranging Impact

Historically, every epidemic has provided us with a strong imperative to reconsider our priorities and upgrade our way of life: the Black Death led to the emergence of the Renaissance; the 2003 SARS epidemic greatly accelerated the development of China’s ecommerce and digital infrastructure. For COVID-19, although it is still too early to predict all of its lasting implications, we also observed some early signs of how this epidemic is changing consumer expectations, facilitating new habits and consumer behavior, and accelerating industry transformations to address the needs of increasingly connected consumers.

Therefore, we intend to publish a series of observations on the long-term impact of COVID-19 from the following perspectives:

1. Government Policies and Economic Stimulus

Besides the common indicators used to track the health of the global economy such as the GDP and the employment rate, we should also closely watch new policies effects to the economy in the epidemic. In China, the central government has already adjusted its previous goal of GDP growth for this year, touting “stability” as the keyword for the Chinese economy for the next two years.On one hand, the central government has made stabilizing the employment rate a priority. The State Council has introduced a series of policies aiming to provide job security, including offering help and support people returning to work, debt relief and job matching for small and medium-sized businesses. Moreover, regional governments are also looking to boost job opportunities by optimizing their policies to create an encouraging environment for start-ups and flexible employment.On the other hand, policymakers in China are also taking action to stabilize the consumption level. Some local governments have issued consumption coupons to stimulate consumer spending. For example, the city of Nanjing dispatched “consumption coupons” amounting to RMB 318 million to people working in business badly affected in the epidemic such as restaurants and travel, as well as those in low-income groups. In Shanghai, the transportation department released more car plates for monthly auction in a move to revive the automobile market. If we consider the post-epidemic recovery as a relay race, the government has started the first lap.

2. Accelerating Changes in Consumer Behavior

The conventional wisdom says it takes 21 days to form a new habit. During the past two months, we see a lot of emerging changes in consumer behavior because of the lockdowns and the resulting shortage of last-mile delivery services, especially during the Chinese New Year holiday. Specifically, the following three areas should be closely observed:

  • The “shut-in economy”: When people were quarantined at home, their desire for shopping and cultural consumption was not totally suppressed; On the contrary, they shifted the focus of their consumption and looked for upgrades, supercharged by mobile commerce and shoppable social content. We need to carefully consider whether the “shut-in economy” has lasting power and discern which elements and shopping scenarios will still be around after the epidemic? Of course, the “shut-in economy” is enabled by a broader ecosystem of supporting services and new platforms. How to adapt existing business model and plug it into this ecosystem is a question that many brands will need to answer.
  • The consumerization of healthcare: Over the past 2 months, the non-stop top-down communication of disease prevention and preventative health have led a lot of Chinese families to form a daily routine of sterilization and checking vital signs. These routines will no doubt lapse after the epidemic, but the mindset of healthcare as well as the demand for preventative care products will likely remain as a staple, thus opening a new growth area for brands in healthcare, food, fitness, and other adjacent industries to tackle.
  • The possibility of “compensational consumption”: Will there be a wave of post-crisis “compensational consumption” like what happened following the 2003 SARS outbreak? The evolution of shopping behavior and post-pandemic consumer spend are being closely monitored in China as cities lift lockdowns and return to normalcy, but what we saw so far suggests that the impact of “compensational consumption” will be far more limited this time around compared to what happened post SARS, and limited primarily to certain industries.

3. Adoption of New Technologies and Infrastructure Upgrade

During the epidemic, service robots, telemedicine services, and smart city management were quickly put into use and showed Chinese consumers the great potential of these new technological applications in transforming every aspect of our social and daily life. The recent meeting of the Standing Committee of the Political Bureau of the CPC Central Committee confirmed a tech-led infrastructure upgrade, including 5G connectivity, smart city infrastructure, enterprise integrations with cloud-based solutions, as well as consumer and industrial IoT, will be the central focus for the foreseeable future.Together with the changes in consumer behavior, this coming round of nationwide infrastructure upgrade will further offer advantages to digital-native startups and innovation-savvy companies, and perhaps even force the hands of some industry incumbents and legacy firms to update their company infrastructure and business model to keep up.

4. Media Trends and Innovation Opportunities

There is no doubt that the outbreak and the resulting lockdowns have contributed greatly to the ongoing shift in media consumption and opened up new ways for brands to reach their audiences. The boom in live streaming and short video consumption could lead to new media opportunities, and the aforementioned infrastructure upgrade could give rise to more emerging media channels. Responding to the global fallout of this pandemic, how will brands of different categories adjust their media spending module this year?Another area of potential innovations is the continuous merging of online and offline assets. Since the gradual recovery of offline businesses is a given, how will brands return into offline channels such as OOH and in-store shopper media and evaluate their spending is still up in the air. Also, we saw that especially in the middle of a crisis, brand power matters – bigger brands are just more trusted in this situation. Moving forward, marketers will need to think about balancing the investment between brand-building and performance and trying to work out a better investing model that will can both build brand equity and drive conversion.

5. The Evolution of Cultural Values

In a crisis, people tend to reveal the very best and the very worst of humanity, and a crisis at the scale of a global pandemic is bound to shift cultural values. In the case of COVID-19, the idea of globalization is being re-evaluated by many in China, which could lead to far-ranging implications in Chinese consumers’ consumption preferences.Looking at globalization through the lens of the pandemic, many are pondering serious questions about China’s relationship to the rest of the world and its role on the global stage: How will Chinese consumers perceive different countries as a “friend” or a “foe”? How will this pandemic impact the course of the ongoing trade war with the U.S.? How will the pandemic affect Chinese consumers’ preferences for Western luxury products?Before COVID-19, these questions were just conversation fodders for dinner parties; now, how Chinese consumers will answer these questions and the resulting shift in cultural values will have a long-lasting impact how we build our brands as marketers, and how consumers choose to spend their money, especially in luxury goods and international travel.

With these questions in mind, we will continue to think about the pandemic’s possible impact and future opportunities for brands and marketers. The pandemic is far from over, and the future is still uncertain, but we will try to approach the reality of the market as closely as we can in our search for real-time actionable opportunities. In this series, we will rely on data, observations, and real market response shared by our partners to inform our views, with the hopes that sharing our insights will kickstart discussions that will inspire us all.

当我们讨论Covid-19时， 我们在讨论什么？

September 23, 2020 | Share this article
UM

从疫情爆发已经有两个月，中国战场已经开始进入后半程：主战场湖北和武汉的外援医疗队已开始逐步撤离，医疗机构也逐渐恢复日常运转；其他地区的防控焦点已由内控转为外控—控制输入型病例，国家大面积复工，人民生活开始回归正常。但是，出乎意料的是，这场疫情已经发展到全世界152个国家，发病的峰值还不知道什么时候到来，对全球人民的工作生活产生的巨大冲击堪比一场世界大战：全球至少41个国家关闭了公共场所，鼓励人们在家办工；第三产业被重创，美国的失业保险申请人数创下历史记录；股市4次熔断，用了10天抹去了特朗普就职以来的所有增长；标杆性的文化、商业活动被取消，甚至奥运会都有被推迟的可能性；国境线被关闭……我们曾经用2003年SARS的经验来预测这次疫情对世界的影响，现在看来，Covid-19带来的冲击远远超过之前的疫情，也不可能被“速战速决”，它会持续一年以上已经成为全球的共识。

关于这场疫情对市场营销的冲击，在过去的60天里，我们已经看到有无数的报告在更新。作为专注于营销传播的策略师，我们想换一个探讨的角度，不只是在监督一些指标的变化——毕竟这场疫情的变化太快，当我们看到一些指标的时候，事实上它已经过时了；如果单纯去根据这些指标的变化来制定我们的计划，难免被动而且未必有效；我们更希望做的事情，是探讨这些变化后面的因果，和变化的走向，思考如何让我们的视角更有前瞻性，给我们在下面的工作中一点“有所为有所不为” 的策略空间。在迅速变化的市场中，没有人有全部的信息，没有人可以给市场“算命”，我们更希望通过我们的观察和思考，激发市场同仁的思考或灵感。我们真正关注的是“我们到底可以做什么”——每一次危机都一定蕴含着契机，这次也不会例外。  

新冠之危，难在无可比

面对这场突如其来的灾难，我们试图从过往去找到解决的经验之道，比如2003年的非典。但事实是此次疫情与17年前无可比。

首先是病毒无可比。虽然与SARS病毒属于同一个基因谱系，但COVID-19远比SARS狡猾，毒潜伏期长且隐蔽，演化迅速，目前所知病毒已经有了149个基因突变点并演化出两个亚种，传染力也更强。

也正因如此，Covid-19 对世界经济的冲击远远超过SARS，甚至在过去几十年中，也完全找不到可比的例子。如很多文章已经指出，2003年的中国和世界的接轨程度和现在没有可比性，2003年中国经济的发展和2020年也没有可比性：

  • 经济体量大不同：GDP总值达到了990,865亿元，是2003年的8.5倍，人均GDP超过1万美金大关。
  • 人民生活起点大不同：2003年我国消费零售总额为52516.3亿元，2019年则翻了近8倍达到411,649亿元（数据来源：国家统计局）。2019年我国居民人均可支配收入达到30,733元是2003年的3.65倍（数据来源：国家统计局）；个人及家庭的财务结构也发生了根本性的改变，家庭负债率升至54%。（数据来源：《2019安联全球财富报告》）
  • 科技应用水平大不同：2003年的复苏节奏很大程度上取决于电商的缺席，而2020年，网上购物、远程办公等等以及成为中国乃至世界消费者几乎习以为常的生活、工作形式。
  • 全球化程度大不同：2003年中国刚加入WTO不久；在2020年，作为产业链核心分子之一，中国与世界的连接更紧密。疫情前期，中国的疫情让世界担心自己的订单要掉链子；而现在随着欧洲的停工潮愈演愈烈，全球互相“拖累”，不但影响第二产业的生产，也影响对全球消费者需求的满足。中国消费者正在为可能买不到奢侈品焦虑，中国工人在为无法开工焦虑。如网友戏言：“我们都是一根绳子上的蚂蚱”。

新冠之机，生于变革中

每一次疫情都会各个维度为人类的进化提供一次跃升改变的契机：中世纪的黑死病催生了文艺复兴；2003年的非典加速了中国电商乃至数字化时代的进程……在2020年的新冠疫情中我们也观察到种种迹象，在潜移默化的改变人的普遍认知，养成新的生活行为，并和科技的发展共舞，带动产业的迭代。

在我们的系列中，我们会从以下的角度来解读这些现象：

1. 宏观环境的变化

除了GDP、就业率等宏观经济指数，我们也会密切关注新政策对疫情中经济的影响。中央以及迅速调整了今年的增长目标，“企稳”将是今明两年的关键词。一方面是稳就业，国务院3月20日关于强化稳就业的实施意见就指出稳就业的几项举措，包括推动企业复工复产，为中小微企业减负稳岗，同时也将优化创业环境，鼓励双创和多渠道灵活就业。另一方面是稳消费，一些地方财政通过发放消费券的形式刺激扩大消费：比如南京发放了3.18亿元的消费券涵盖餐饮、文旅、低收入群体等在疫情中受影响较大的产业和个人；上海增发私家车牌照拍卖额度，刺激车市复苏……如果把疫后恢复看成是一场接力赛，那政府的第一棒已经起跑。

2. 消费者行为改变

21天可以养成一个习惯，而疫情已经过去2个月，因为封锁隔离，因为春节期间最后一公里的短缺，许多新的行为方式在养成：
  • 当人们被关在家里，消费的欲望却并没有被压抑，相反，产生了品类的升级和转移，促发了“宅经济”的产生，我们需要思考“宅经济”是否具有长期性，有哪些场景会在疫情结束之后依然被保留下来？
  • 宅经济也并非单独存在，围绕宅经济也有一系列的衍生生态，如何将新生的现象与自己原有的业务模式融合也将是企业演进的机会点。
  • 健康产品化。在过去的两个月中，病毒的防护宣传令到许多家庭养成了日常消毒的生活流程。这些行为在疫情结束后，其强度可能会减弱，但健康的具体化诉求将成为刚需。
  • 购物的进化—冲动的理性。在疫情隔离期间，消费者的购物欲望到底有没有被压抑？会不会出现SARS之后的“报复性消费”？

3. 科技加速发展应用

在疫情期间，服务机器人、在线消费、远程医疗、大数据智能城市管理等让我们看到新技术在社会管理、生产生活中的应用潜力。在中共中央政治局常务委员会会议上，将“新基建”特别是5G、人工智能、工业互联网、物联网等定为未来一个时期的发展重点。和消费者行为的改变一起，新基建的重点加速发展将进一步刺激甚至倒逼传统产业的改造提升，同时培育壮大新兴产业。

4. 媒体投放行为改变和创新

我们可以透过媒体投放的观察，思考几个点：

  • 不同品类的品牌在未来的一年应如何调整自己的投入和投放模式？
  • 那么围绕消费者行为的改变是否有新的媒体机会的产生，例如：直播和短视频？媒体的生态是否有了改变？线上线下该如何协同，比如疫后线下的复苏是一个必然，对于OOH而言是否也是一个契机？该如何最大化这个机会？
  • 新基建对媒体而言一定是一个新的契机，如何更有效的运用新技术？
  • 疫情中，我们关注到品牌建设势能的作用力，那么在疫后该如何平衡品效间的关系和投入比例？

5. 文化价值的改变

灾难永远是人重新审视自身价值观的最好时刻，这次疫情也对全球化的一次巨大的考验，也让每一个消费者亲眼见证“价值观就是生产力”。从这场疫情中看全球化，它到底是个问题？还是个契机？这场疫情之后，我们会期待用什么样的模式和世界合作？我们会觉得哪些国家是“友“哪些是”敌对势力“？究竟我们是如何看待自己的国际地位的？我们对于未来中国在世界事务中将要产生的作用和影响有什么看法？我们究竟如何看待“人类命运共同体”这个命题？如果没有这场疫情，这些问题不过是饭后的谈资；疫情之后，我们怎么回答这些问题会牵涉到我们怎么建设品牌、消费者如何选择自己的旅行目的地——真金白银的生意问题。

怀着对这些问题的探索，我们将持续思考疫情对于品牌和企业可能的影响和未来契机。疫情依然在发展，未来依然处于不确定中，我们不会假装我们有正确的答案，但是会追求无限接近市场的真实面目，追求可以实时找到行动的机会，追求用实践来检验我们的思考。在这个系列中，我们会依靠数据、观察发言，也会联动同行分享市场上的反馈，希望能够有一场精彩的对话和交流。

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