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Unprecedented is a word frequently used to describe the economic and social impact of the coronavirus. For many consumers, this was the first pandemic they have experienced and its life-altering effects are likely to endure for some time.
The scale and speed with which COVID-19 spread challenged the models of brands, retailers and manufacturers. It bankrupted airlines, closed airport terminals and reshaped port services and supply chains.
While cautious optimism is emerging in many Asian markets, consumers understand that the virus is still spreading in India, Indonesia and the Philippines, plus Africa, South America, the Middle East and the US.
This heightened sense of concern about future clusters, outbreaks and waves is a tangible outcome of COVID-19 that businesses operating across Asia must consider.
Here are four other key factors for business leaders to ponder as Asia enters a new era of complexity.
The first six months of 2020 saw dramatic changes in how consumers identify with brands, research products and make purchasing decisions. From a world where global interconnectivity and omni-platform choice were taken for granted, consumers entered the isolation of lockdowns and border closures.
COVID-19 created prolonged periods of social inaction. Beyond quick trips to the supermarket, people were disconnected from day-to-day familiarity with physical products. Without recourse to travel, there were also no opportunities to sample and share new product experiences while on vacation.
As a result, shoppers came to rely on virtual brand interactions. With lockdowns receding, caution about personal safety and returning to pre-pandemic levels of interaction may see behavioral patterns undergo a renewed period of transition.
The convenience and speed of shopping via smartphones was gaining momentum across Asia, but COVID-19 has accelerated the trend. During lockdowns, the so-called "Home Economy" took center stage. People created diverse online shopping lists – ranging from groceries and healthcare items to interior decoration materials and consumer appliances – for home delivery and home consumption.
Product sales via live-streaming and social commerce also increased, and if China’s consumer-to-manufacturer model expands across borders, it will bring a new layer of complexity to regional and national sales funnels.
To facilitate online buying, several Asian markets recorded strong rises in e-wallet transactions, plus cashless payment promotions by retailers, restaurants and brands. Governments and banking authorities are supporting this cashless transformation.
Singapore is currently assessing applications for five digital-only banking licenses, while the State Bank of Vietnam encouraged people to use e-payments during the pandemic instead of coins and notes, which it said can carry germs and bacteria.
Throughout 2019, the climate crisis and plastic pollution galvanized companies, NGOs, governments and consumers to take proactive steps to protect the planet. So far in 2020, the pandemic has refocused priorities towards public health, and the protection of families and loved ones. Shared fears about the virus have also inspired communities to support each other and create inclusive initiatives.
As global warming and COVID-19 have highlighted clear and present human vulnerabilities, companies will be challenged to lead the way to a sustainable future. Socially conscientious brands rallied to the cause across Asia during the pandemic.
Personal protective equipment makers scaled up production of face masks and screens, while cosmetics companies pivoted to produce hand sanitizer and disinfectant. In Vietnam, a sneaker brand created a bespoke line with street art graphics depicting the battle against COVID-19 and in Japan customized fabric face masks were created to add comfort and style.
The COVID-19 impacts outlined above may be overlaid by higher unemployment and job insecurity and lower consumer spending in the third and fourth quarters of 2020. Proven methods for marketing, selling and servicing customers will be tested, and companies will need to rethink their consumer engagement strategies. The relationship between value and loyalty is primed to intensify.
Emerging economic uncertainties will also challenge pre-pandemic notions of supply-and-demand. Manufacturing shutdowns in China combined with restricted port and air cargo facilities squeezed supplies of essential and discretionary products during the first three months of the pandemic.
The resultant effect of those constrained supply chains on managing inventories, logistics and distribution still reverberates across Asia.