ZWC Focus | How Chinese Consumer Brands Spent Their Chinese New Year
02 Mar 2020

Starting off the year 2020 with a global epidemic has surely caught a lot of uprising consumer brands off guard.

With all offline consumption scenarios impacted across the country, it’s surprising to find the usually unpopular spring festival items ‘blossoming’ in such a time.

The first wave of opportunities came to frozen foods and convenience foods, as evidenced by shelves where frozen dumplings and instant noodles occupy that were emptied by those stay at home during this Spring Festival period.

Even with impaired delivery and no sale or promotion, the visitors and daily sales of the fast-food brands in the Spring Festival were the same as or even higher than before the festival. “As long as there are stocks, people will just flock in” so said an entrepreneur.

Though concerns on resuming normal production, logistics, sales, and financing have been on top of a lot of entrepreneurs’ minds, they firmly believe flexibility and responsiveness to the epidemic are keys to succeed in the context of the undertaking new/old brand transition, which is already speeding up.

Meanwhile, despite a short term plunge on demand, entrepreneurs see it as ‘temporarily suppressed’ and expect a reversal when the epidemic passes, just as it happened after SARS in 2003. Looking from an annual perspective, there may not be a drop in sales.

Of course, before all these can happen, we have to overcome the most difficult fist quarter. Minor variance in local policies aside, most employees have started going back to work since 10 Feb. Social media marketing and e-commerce channels ranking will be the focus for brands in the Q1 2020.

Three risks and opportunities:

1.Affected by the epidemic, people’s consumption habits will change.

2.New brands have started operating omnichannel in the last couple of years, driving growth online and offline simultaneously.

3.Offline brands have begun to invest marketing and channel budgets online in order to survive.

The ‘traffic bonus’ brought by channel changes is often a necessary condition for the rise of new consumer brands. Although the current offline-to-online channel change is only short-term, there could potentially be huge opportunities.

The epidemic will pass eventually, and the suppressed demand will rebound. The biggest challenge is the current production and logistics problems before the resumption of work.