Home Consumer Matthew Nelson of Mintel APAC looks at the future of Chinese consumer trends

Matthew Nelson of Mintel APAC looks at the future of Chinese consumer trends

by Tom Pattinson
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Matthew Nelson - Mintel APAC General Manager

Matthew Nelson is general manager for the Asia Pacific region at research firm Mintel. Here he looks at some of the consequences of Covid-19 for Chinese consumers and what the future might look like

What are the main changes that you have seen in Chinese consumers because of Covid?

Mintel’s analysis of consumers, markets, new products and competitive landscapes provides a unique perspective on global and local economies.

Mintel started tracking the Covid-19 impact on consumer behaviours and market shifts as early as February, starting from China, when the country was in a serious situation amidst the pandemic. Our Global Covid-19 Consumer tracker was initiated even before WHO declared this a pandemic. We realised that Covid-19 would have a long-lasting impact on businesses over brands, and we quickly started conducting research and sharing insights via thought pieces on our blog; exclusive insight reports; and running Covid-19 sessions for our clients – both in China, APAC and globally – in order to monitor shifts in consumer sentiment and behaviour, help provide any insights or guidance for their brand repositioning, product innovation or market opportunities.

In China, with the number of diagnosed Covid-19 cases decreasing, economic activities are beginning to resume. In early May, 88 percent of people reported working at their usual office location, increasing from 56 percent who said the same in early March.

Covid-19 has brought many changes to Chinese consumer behaviours and markets as well. Some of them are just short-term changes, like at the very beginning of the outbreak, the most impacted industries were travel, leisure and hospitality industries. But with the pandemic coming under gradual control and people starting to go back to work, we see a slight increase in travelling, and in the hospitality industries. Chinese consumers are experiencing more change as their priorities shift, based on the events of the last few months.

Consumers are reassessing what’s important with around one-third saying that luxuries are less desirable now.

New research from Mintel reveals that when it comes to spending priorities, consumers are reassessing what’s important with around one-third saying that luxuries are less desirable now. The desire for luxury products and services is dampened after Covid-19. In the short-term, this is a temporary setback, mainly associated with financial pressure, and is likely to recover as personal financial circumstances improve. In the long-term, expect to see the definition of luxury evolve and become a state of mind, rather than ownership of things. In general, we predict ‘mindful consumption’ will emerge as a notable trend that will see more consumers turn away from indulgent spending and review what matters in life.

Would these changes have happened anyway, and it’s just the timeline that has changed?

Covid-19 is something that has never been seen in human history. No one has had experience in handling this specific virus before. It is reasonable and understandable that essential changes happen during and after the pandemic. The consumer market and consumer behaviours are always dynamic and subject to changes. That’s why being on the frontline of changes and consumer trends is key for brands to realise a sustainable business going forward.

While the current situation is completely unique, we do have past virus crises like SARS and economic recessions to look back on and learn from. It is Mintel’s research from those difficult times that our analysts refer to in their research and analysis today. For example, in the UK, some of the biggest winners of the last recession were absolute luxuries, the likes of premium skincare and sparkling wine. They are products that no one actually needed, but that did a great job of lifting people’s moods in tough times.

The outbreak has certainly created many challenges for companies in the short term, but it has also made understanding markets and consumers more relevant and important than ever.

Your 2030 Global Consumer Trends report has seven drivers. Can you elaborate on what they are?

The 2030 Global Consumer Trends is our predictions for how consumers will evolve over the next 10 years, and how the pandemic has accelerated these predictions, effectively bringing the future forward. We have incorporated seven key factors that drive consumer spending decisions:

  • Wellbeing: Seeking physical and mental wellness.
  • Surroundings: Feeling connected to the external environment.
  • Technology: Finding solutions through technology in the physical and digital worlds.
  • Rights: Feeling respected, protected, and supported.
  • Identity: Understanding and expressing oneself and one’s place in society.
  • Value: Finding tangible, measurable benefits from investments.
  • Experiences: Seeking and discovering stimulation.

Taking tech as an example, how has this changed for consumers because of Covid-19?

The Covid-19 outbreak is pushing brands to test multiple channels to keep consumers engaged. As consumers battle with feelings of loneliness and isolation, technology has become a lifeline for consumers wanting to stay connected to loved ones, work remotely and access both shopping and entertainment. We predict that many of the short-term technology behaviours consumers have adopted during the pandemic will persist long after the restrictions are lifted. We have seen that:

  • 49 percent of Spanish consumers say most of their leisure activities involve using digital technology
  • 30 percent of surveyed consumers say they have purchased sports and fitness products through public accounts/bloggers’ recommendations
  • 73 percent of US consumers agree that they like to keep well-informed about the latest news/happenings in the world

The democratisation of digital entertainment means consumers now expect that to continue, but content providers will be challenged to re-install rates consumers are willing to accept over time. E-Commerce and online transactions have the potential to become – and remain – the norm, and gaming used as a reprieve will become an essential to everyday lives. Consumers will scrutinise their digital entertainment spending and make reductions, but are unlikely to eliminate it entirely. E-Commerce and digital transactions will move further into the mainstream.

Meanwhile, the impact to globalisation could be huge, with more domestic production, less complex supply chains and higher prices as a result.

Here are three technology trends to watch for:

New tech normal

Technology has become a lifeline for people throughout the pandemic, especially seniors, and those expectations are now becoming normalised. The shifts in how and what people do online, and the impacts on traffic patterns will remain, causing companies to further innovate to break down barriers.

Innovate ahead of needs

The resistance to digital adoption that has persisted for decades has seemingly evaporated overnight. Consumer expectations and behaviour will only be better-informed, and more demanding.

Shift from destructive to constructive

The widespread adoption of e-sports shows the collective strength of the gaming community within the global conversation surrounding essential entertainment. This shift toward a more constructive view of technology and connectivity will have profound effects over the next decade.

Which types of clients have suffered from the pandemic and how have you helped them?

The outbreak of Covid-19 has already spread to an extent that it is having a profound impact on the global economy and consumer markets. We are seeing that some industries such as food service and travel are taking an immediate hit due to necessary quarantine measures in order to protect people. Leisure and entertainment industries also suffered a great loss from this pandemic.

Undeniably, it will take time for these sectors to recover, not only so that necessary policy changes can be put into place, but also so consumers’ can heal and prepare psychologically.

The outbreak has certainly created many challenges for companies in the short term, but it has also made understanding markets and consumers more relevant and important than ever.

We have launched monthly Covid-19 tracker data in APAC regions and globally to share with our clients of all industries about the changing impact and consumer behaviours brought about by Covid-19. We have hosted several webinars on subjects including beauty and personal care, food and drink, corporate social responsibility, food ingredients, the overall impacts over local economies, and consumer confidence.

Mathew Nelson

Mathew Nelson has found more time to train for triathlons

How has your work changed? 

Mintel is a global company with local presence in many markets. With economic globalisation, our clients are actually looking for market insights in many markets. For instance, our clients in Australia are very interested in what’s going on in China’s consumer market. Before the pandemic, many of our teams and departments already worked remotely and across different time zones. It’s certainly an adjustment of how we work, but we put our employee’s health and safety as the top priority, then we focus on helping our clients find the right strategy to deal with the dynamic consumer market request.

In the current scenario, Covid-19 changes the way people communicate and do business, and Mintel is no exception. Due to the outbreak, we have reviewed our consumer research process globally, including in the APAC region, where we were primarily using a face to face collection method. We took a decision to adopt an online methodology, which removes the need for close interaction between interviewers and the public, and so allows all involved to comply with social distancing measures.

What are your hobbies and are they impacted because of COVID-19?

I am located in Perth. My wife and I are here until things start to open up – we are Covid-19 nomads essentially. We have both been incredibly busy with work but it has also given us a chance to slow down and find a balance in life, especially as I used to spend 50 percent of my time on the road travelling for work. We’ve settled into domestic life of cooking and catching up on books, movies and the very best of Australian TV. My favourite part is that I am actually getting in more training on the bike and running more than I ever have before, as I spend a lot of my spare time participating in triathlons.  It definitely provides some respite from the stresses of life.

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