China Wine

McKinsey: Chinese consumers purge alcohol during lockdown

When the going gets tough, and the tough did not get drinking, according to the latest findings from a report by consulting firm McKinsey & Company in China during the lockdown months.

During February and March, when the whole country was placed under a lockdown to fight the spread of Covid-19, alcohol and cosmetics are what consumers are purging during the quarantine, based on findings from a McKinsey consumption report on China.

According to 2,500 consumers who participated in the survey, 30% of them said they cut down alcohol consumption and skincare products during the two-month period. Not surprisingly, half of them said they reduced cosmetics use as well.

Unlike countries like the US and UK, where wine and spirits sales rose before and during lockdown measures, the buying frenzy failed to translate in China, a country where wine or alcoholic beverage in general is not considered a necessity.

This also echoes sales data released by China Alcoholic Drinks Association. Domestic wine sales during the first two months of the year dropped by over 40% in fact, coming off an already-afflicted year of wine sales in 2019.

mckinsey china
Photo source: McKinsey & Company

The McKinsey report also warned about expectation for post-covid consumption. About 60-70% of respondents said their consumption will bounce back to pre-covid level or slightly increase, but 20-30% said they will remain cautious or decrease spending after the outbreak.

However, the exception is the deep-pocketed big spenders. About 10% said they will notably increase consumption after coronavirus pandemic. If there’s anything to go by the revenge spending mentality, the sales at a Guangdong Hermes store is an example. Hermès Guangzhou flagship raked in US$2.7 million on its reopening day after being closed for months during the lockdown.

E-commerce, as expected gained strong traction for a country that already boasts over 800 million online shoppers during the lockdown, according to the report.

Meanwhile, consumers’ attitude toward food safety, environment and lifestyle also shifted, based on the survey results. 66% of the consumers agree or strongly agree that food safety should be strengthened and willing to spend more time on this subject, and 64% will consider buying more environmentally friendly products. Another 70% will opt for healthy diet and exercise to boost immunity.

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