ANALYSIS: Will Sars-induced change last?

The outbreak of atypical pneumonia across Asia and the fear generated by the health crisis has sparked dramatic changes in people's behaviour, as a series of recent consumer surveys show.

Sars has induced change in consumers' outlook on life, purchase decisions and media consumption habits. Predictably, some of the changes include placing a greater importance on health, family and friendship, and less on materialism, as the surveys show.

MindShare's regionwide financial well-being study, which also examined the impact of the Iraq war, found that Sars-affected markets and countries with significant Muslim populations were the most pessimistic last month, compared with February.

In particular, Indonesia, Malaysia, the Philippines, Hong Kong and Singapore were decidedly glum; only Australia, Japan and Vietnam were optimistic.

But the upside was that a quarter of respondents believed that there would be a general improvement in the economy by the end of the year.

A significant number of respondents were still planning on making major purchases on big-ticket items such as home appliances, vehicles and home improvement services, a healthy sign that indicates the short-term nature of consumers' concerns provided Sars does not resurface.

"Under the current environment, people have tightened their belts but the majority believes the situation will rebound. This surprised us because we expected more people to be thinking about deferring on major purchases," said Louise Down, MindShare regional executive. She added that while people were going out and socialising less, they were continuing to spend but in different ways, such as on books and compact discs.

In addition, more people were maintaining their investments in stocks, managed funds, property and insurance at pre-Sars levels, compared with those who were deferring those investments.

In Hong Kong, one of the markets hardest hit by Sars and burdened by a two-month long WHO travel advisory that was recently lifted, a ZenithOptimedia focus group study found that spending patterns had changed considerably.

It was now based on the new belief that "life is precious and vulnerable", according to the agency's director of strategic resources, Jane Koitka.

"Possessing status symbols to show success has been very high until Sars hit Hong Kong. There is now a need to be happy and this manifests itself on women especially to spend more on family and friends to show appreciation and care for those close to them.

"Men on the other hand will also spend but they are going through a greater process of justification," Koitka said.

The Zenith study also found that as Hong Kong residents stayed indoors to reduce the chance of being infected, their media consumption habits shifted to reflect the change. Cable TV was the big winner as people turned to movie and entertainment channels for some respite from Sars.

Koitka said: "TVB and ATV are the most popular channels, but when they felt that it was better to stay at home, they realised that some of the programmes were not as entertaining as they once thought. So they looked for other options."

The internet also became more popular for games and up-to-the-minute news. Radio listenership, too, was up, while newspaper readership appears to be the same as before the atypical pneumonia outbreak.

The impact of Sars on Hong Kong was underlined by ACNielsen's customised research survey, which revealed that in April the incidence of shopping and dining out plunged between 25 and 36 per cent, compared with the period immediately before the outbreak of Sars.

In Taiwan, paranoia over Sars hit fever pitch, driving consumers to bunker down at home. A survey by Synovate at the height of the crisis last month, found that one in five Taiwanese suspected that they had contracted the fatal disease against an infection rate that stood at 0.003 per cent of the population.

Suspicion of catching the disease was higher among women (a quarter of female respondents) and young people (30 per cent of the 15-24 age group).

As in Hong Kong, "destination shopping" sustained one of the worst blows - 44 per cent of respondents said they had decreased their shopping at department stores "a lot" and 25 per cent had cut back shopping at hypermarkets "a lot".

Leisure activities also moved back home, benefitting the media industry in particular. Reading magazines and newspapers (78 per cent) and listening to music and the radio (73 per cent), according to Synovate. Similarly, usage of the internet soared 71 per cent in the 15-24 age group in Taiwan.

The question is will the abrupt change in behaviour impact consumers' receptiveness to brand activities?

Koitka stressed that the changes would not make people less receptive to advertising. "They are receptive, but looking for more empathy and relevance." She added that as people are getting tired of hearing about Sars all the time, advertising with uplifting and humorous songs would be the most effective now.

A McCann-Erickson Pulse study also found that Hong Kong people were more conscious about the importance of cleanliness and a healthy lifestyle, including washing more often, exercising, eating a balanced meal and taking vitamin supplements.

But as more is known about Sars and as markets such as Hong Kong, China and Singapore move to contain the crisis, the talk has turned to whether these new lifestyle habits will affect behaviour in the longer term.

Publicis Asia-Pacific regional director of strategy, George Singleton, believes otherwise, saying that old habits die hard.

"People are always conscious to some degree about the importance of health, family and friends. It is just that events in life provide a periodic reminder - a slap in the face - of just how important these things really are... that we shouldn't take these things for granted. But as time passes, we often do just that: take them for granted."

However, both Singleton and Zenith's Koitka believe that some of the new media consumption patterns would prevail.

Koitka said: "Especially with the internet, people will have found sites which give them up-to-the minute news reports and information on current affairs and will stick with them, but not at the same frequency as during the height of the Sars outbreak."

Singleton added that it would come down to the question of perception - whether or not Sars is seen as a high-level threat.

And whether the disease will rear its head in a major way when the next cold season comes around for North Asia at year-end.

SARS AND HONG KONG: ANOTHER BLOW TO SPENDING 
 % change in 
 expenditure per capital 
 April, 2003 (%) (Apr vs pre-Sars) 
Dined out for dinner 67 Down 36 
Bought clothing 47 Down 29 
Purchased accessories 15 Down 31 
Bought shoes 25 Down 25 
Source: ACNielsen Customised Research. 
Interview base: 1,000 respondents. 
SARS CHANGES: A GENTLER, REFLECTIVE HONG KONG? 
Pre-Sars 
- Greater focus on social activities 
- Less aware and conscious of their action and behaviour 
- Lifestyle limited to a few regular and habitual activities 
Post-Sars 
- Inwardly reflective of oneself and others 
- Much more aware and conscious of their action and behaviour 
- More socially and health care aware 
- Forced to find alternative activities 
Source: ZenithOptimedia.