Hong Kong adspend plummets 28% in Q1 as COVID-19 cripples consumer sentiment

A sharp downward spiral in consumer sentiment is, unsurprisingly, making a deep impact on adspend in Hong Kong. According to the latest report from data tracker Admango, adspend in the region fell 28% year-on-year for the first quarter of 2020, as the full effects of the COVID-19 pandemic took hold. 

Expectedly, this sharp drop was led by the travel and tourism segment, an industry crippled by sweeping lockdowns and bans that stopped people in their tracks. The sector suffered a 91% drop in adpsend. This was only heightened in March as lockdowns intensified and Hong Kong ring-fenced itself from new infections by almost entirely shutting down inbound travel. 

In contrast, as people tried to manage their life and leisure in new ways, a few other sectors reported a sharp rise in adspend. In terms of overall adspend, food delivery and catering services marked a 154% YOY increase in spending, while adspend from online store and group buying services accounted for 39% of the total adspend from retail—and increased 26% to become the top spending subcategory.

Food delivery has taken off among homebound consumers

In the pharmaceuticals and healthcare category, cold and flu medicine (up 11%), cough and throat (6%), and pharmaceutical products (17%) all enhanced their adspend. Admango has previously reported that the impact from these adspend cuts due to COVID-19 will likely be much deeper than those caused by SARS, back in 2003. 

As COVID-19 rapidly morphed into a pandemic, the transition of adspend towards mobile accelerated. According to Admango's estimates, mobile now accounts for over a fifth of adspend in Hong Kong. Mobile remained the sole medium with a double-digit YOY increase in adspend, led by banking and investment services, insurance, and games and hobbies. 

As budget cuts begin to bite, several media companies in Hong Kong, led by the South China Morning Post, have made cuts to manage their business during this time. Other embattled media companies including TVB and Apple Daily have also struggled to cope with the slump in spending that has battered businesses for the past few months.