Financial health beats well-being as top fear in Asia
- 60% of Asians are worried about what COVID-19 means for their financial security
- 48% of people in Asia are ‘hugely concerned’ about the impact of the virus
- People are turning to online shopping and avoiding travel to minimise risk
Despite the increasing numbers of cases of COVID-19 across Asia, the top fear is not falling sick but the threat that the virus may hurt individuals’ financial health, according to a recent study conducted by Kantar, the world's leading data, insights and consulting company. As the global financial markets plummet in what seems to be the worst since the Global Financial Crisis, 60% of people across Asia are worried for their financial security. Followed by 46% who are worried about catching the virus, while the fear of falling sick is highest in Japan (68%). Over a third of Asians (34%) fear COVID-19 could push economies to the brink of recession. Koreans are most concerned about their financial health (77%) and job losses (61%).
Almost half (48%) of consumers in the region are ‘hugely concerned’ about the impact of COVID-19 on their day-to-day lives. Understandably, people living in countries with the highest number of cases are feeling most vulnerable to the virus, with 75% in Korea and 60% in Japan saying that they are concerned, and their lives have been disrupted. The level of trust in the way the government is handling the crisis is very low in Korea (39%) and Japan (9%). In Singapore, where only 33% are concerned, 78% say that they trust in the government’s approach to handling the crisis.
The study used survey data from 3,000 respondents in Indonesia, Japan, Korea, Philippines, Singapore and Thailand along with panel data and in-depth social media analysis to understand how the virus is affecting people’s attitudes and behaviours across the region.
In addition, Kantar analysis covering the stock price evolution of over 100 consumer goods companies across Asia shows that only a small group of corporations managed to improve their value since COVID-19 started spreading uncertainty across the region. Consumers and markets are waking up to the economic threat posed by COVID-19, as attested by global stock markets including Asia sinking even deeper in recent days.
Changing consumption and lifestyle behaviours
The study shows how people are adjusting their lifestyles to reduce the risk from COVID-19. The industry that has been hardest hit by the outbreak is travel, with 59% of people saying that they have decided to travel less to stay safe. This is followed by 52% saying that they are less likely to eat out, and the same number (52%) saying that they are avoiding socialising outside of the house. Instead, people are choosing to stay in, with 42% streaming more content, 33% hosting get-togethers at home and 30% ordering in food.
Purchase behaviours have also shifted as the threat from the virus has grown. The most apparent development has been the rise in ‘panic purchases’ in many countries, with around one in three (30%) saying that they worry about running out of essentials and buy more than usual, leaving shelves empty. This is highest in Japan where 64% of people admit to this behaviour.
The study also reveals a 32% increase in online shopping across these markets over the past two months as people avoid crowded supermarkets or use ecommerce channels to get their hands on items that are out of stock in physical stores. Koreans have the highest increase in online shopping (41%). Online grocery platforms and food delivery services saw the highest increase, resulting in many providers having to adjust their strategies to deal with the demand. In contrast, shopping in retail outlets has been reduced by 35% over the same period.
Predictably, categories associated with hygiene and health have seen the biggest rise in purchases, with 48% of people saying they are buying more personal hygiene items such as face masks and hand sanitiser, 45% buying more health and nutritional items such as vitamins to improve immunity, and 40% reporting that they are spending more on home cleaning products. On the other hand, people are spending less on alcoholic beverage (30%), a trend also seen during the SARS epidemic. In addition, fewer people are buying luxury items (27%) and meat and seafood (21%).
The study highlights how COVID-19 is resulting in consumers with a heightened focus on products and services that are ‘safe to use’, especially when it comes to the food and beverage category and consumer goods. In addition, they are looking for brands that have enhanced health and wellbeing benefits to help build a strong defence against the virus. There is also demand for the insurance sector to create more products geared at covering health and wellness in times of crisis.
Adrian Gonzalez, CEO of Kantar in Northeast Asia, Southeast Asia and Pacific, says: “As the Coronavirus intensifies and continues to spread across the world, our findings show the extent to which it is affecting people’s daily lives. People are understandably alarmed and doing what they can to stay safe. Many are changing what they are doing and the things they are buying and some admit to panic buying. But what people worry about the most is what COVID-19 will mean for their financial security as it potentially impacts longer-term economic health. This poses an added problem that the choices people make may continue to change well after the epidemic comes to an end. How to deal with this seems to be a matter of trust. For example, Singapore is currently on high alert with ‘Code Orange’, yet people seem less concerned because they trust the government’s handling of the crisis. People will likewise look for trust in brands and their supply chains as they make choices as to what they may or may not buy.”
Stéphane Alpern, Managing Partner, Southeast Asia at Kantar Consulting, adds: “People do not expect all brands to save the world, but to deliver real value, act responsibly and do right by the community, including their employees. UOB in Singapore allocated SGD$3 billion for its affected local corporate and SME clients and Grab, rolled out a dedicated 24-hour service for healthcare professionals travelling home from work. By focusing on problems they can fix, these brand actions are incredibly powerful.”
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