Editor’s note: Maxwell Wang is founder of Researchism Shanghai Business Consultancy Center, China.
One moment you are making resolutions for the Lunar New Year and the next your day-to-day is hindered by a progressively extended break that seems to entrap you in the swamp of wasted time. Prolonged days off – for both entrepreneurs and employees – are not exactly something to celebrate.
The coronavirus epidemic will dissipate sooner or later. Once the storm passes, what are we to make of our current retail model? Doom and gloom aside, in this article I will share a market research perspective on the impact of the coronavirus, specifically observations and hypothesis on new consumption patterns that may arise immediately post-coronavirus.
1. Will the coronavirus epidemic shift or create a new consumption context in China?
Consumers likely won’t be too keen on flocking to viral (pun intended) brick-and-mortar stores to get up close and personal with other shoppers. Therefore, the tried-and-true promotional tactic of location tagging at “wanghong” (internet sensation) shops will be a no-go this year.
During the 2003 SARS epidemic, though the virus was declared globally contained by WHO in June, the anguish and memory of it carried on until December. The end of the epidemic did not see a surge in consumption due to the residual fear of going out.
How will consumers’ shopping habits change after the coronavirus epidemic? This question prompts businesses to be bold in imaginative thinking and nurturing toward brand creativity, managerial efforts and speculations of consumer mind-set in the coronavirus aftermath.
2. Will the coronavirus epidemic give rise to a new business model?
Prior to the SARS epidemic, Liu Qiangdong, the CEO of JD.com in China, was determined to dethrone GOME as the leading electrical appliance retailer in China. However, after the epidemic, his GOME goal was replaced with a bigger e-commerce dream.
That year, many online activities flourished. Taobao was founded in May; Tencent released QQ Games in August; Qidian, an online literature platform, started a subscription service; and one of the largest Chinese recruitment websites, 51job.com, went public on the New York Stock Exchange and countless job hunters submitted resumes online.
The coronavirus epidemic will cause a major blow to the economy, but what new business models might it promote in the meantime?
Remote working was on the rise prior to the coronavirus and will likely increase in popularity. Sspai.com, a Chinese content creation website focusing on digital consumption, has 22 full-time employees, and more than half work remotely or from home. The tools and methods that facilitate remote working may become more sophisticated, and employees who have now experienced the convenience and efficiency that comes with remote working may grow more inclined and accustomed to it.
Other hypothesis on potential new business models include:
- The risks to supply chain and brick-and-mortar retailers might increase the popularity of unattended supermarkets and drone deliveries.
- Free membership trials provided by e-commerce platforms during the epidemic will allow non-members to get a taste of the benefits that come with paid products and thereby increase their willingness to subscribe as members.
- The free streaming of the movie “Lost in Russia” during the Spring Festival will prompt movie theaters and other media outlets to reconsider their distribution channels.
- Remote and AI clinics may see greater acceptance as spurred by Haodaifu’s free online medical consultations provided by volunteer physicians during this epidemic.
In the same way that SARS sparked a rapid development of e-commerce in China and the Great Hanshin earthquake ushered a collaborative consumption norm into Japan, the coronavirus epidemic, along with the 5G technology, will catalyze the prevalence of new business models (See “The Rise of Sharing: Fourth-Stage Consumer Society in Japan” by Atsushi Miura).
3. How may the consumption mind-set of different consumer segments be influenced by the coronavirus epidemic?
Uncertainties in the epidemic aftermath will trigger a significant divergence in consumption confidence and beliefs among consumer groups of different income levels.
According to research, in the aftermath of disasters, low-income groups increase preventive savings and decrease consumption to accumulate capital, whereas high-income groups increase preventive consumption such as insurance, investment products and personal education to hedge against future uncertainties.
Be it through preventive savings or consumption, consumers are bound to be more preemptive in evaluating their values and attitudes toward consumption when faced with an uncertain future. The stereotype that the younger generation lives in the moment, if not for the moment, will need to be reconsidered after the epidemic.
Embracing the aftermath 
In January, many of us wrote down our resolutions for the new year. None of us anticipated what the start of 2020 had in store. In Chinese, there is an old proverb that says, “Within seven steps of a snake lies the antidote to its venom.” Weiji means crisis in Chinese; it links together wei (danger) and ji (opportunity). The word itself implies the double-edge nature of any crisis.
If we could go back to 2003, a lot of people would secure a spot on the founding team of Taobao or JD.com. The coronavirus epidemic bears a striking resemblance to SARS – similar timing, scale of impact and even some attempts at covering up by those in higher ranks. What shall we do in 2020 to embrace the aftermath?