Business

Latin America glances at China to look for clues in consumer confidence

Chinese consumer confidence is returning but retailers should expect a new normal and the decrease of items much sought during isolation such as cleaning product and alcoholic beverages

Chinese yuan on the map of South America.
Photo: Oleg Elkov/Shutterstock

Chinese consumer confidence, the guideline to Brazilian retail, is returning at a slow pace, according to a Valor report. A McKinsey & Company survey shows that Asia is turning into a potential leader in reshaping the global economy post-coronavirus and molding consumption habits.

The consumers habits currently adopted in China are described by McKinsey as the ‘next normal‘. This concept includes a decrease in consumption of items much sought in the last few months of isolation, such as alcoholic beverages and cleaning products and personal hygiene.

In a scenario where brands will need to respond to the new dynamic of consumers needs, there will be necessary more advertising and promotional efforts, according to the data analysis. It’s possible to observe the growth in revenues of brands that promoted social media actions during pandemic. According to the survey, the share of these online sales in companies’ revenues grew between 15% and 30%.

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The survey has consulted 2,500 Chinese consumers in two rounds, first in the end of February and then in the end of March. Almost half (49%) of those interviewed recently expects a total economy rebound within two or three months after the pandemic.

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According to the research, during the pandemic, home cleaning was the sector with the biggest increase in sales (53%) followed by alcoholic beverages (30%) and hygiene products (27%). However, for the post-coronavirus phase, the survey also points out that consumers (between 20% and 30%) expect to start consuming less or much less after experiencing the pandemic.