The developed Asian markets of Japan, Hong Kong, Taiwan and South Korea experienced less of an impact from the COVID-19 pandemic than the rest of the region, Europe or the Americas. But even so, consumers in these markets are changing their purchase patterns and brand preferences, according to market researcher Nielsen, which has observed specific twists to the brand consumption tale in these places.
For example, in Taiwan, people are apprehensive about seeing doctors, resulting in OTC purchases growing more than nutrition supplements in bricks-and-mortar channels; Taiwan saw a 6% rise in sales of OTC medicines for colds. In South Korea, meanwhile, consumers prefer trusted brands, with the top five brands responsible for 28% of total sales.
As consumers stayed home, they purchased more and more often online, according to Nielsen data. In Japan, the largest e-commerce company, Rakuten, recorded a 58% rise in sales. Top categories were thermometers (non-contact type), chair pads, cushions, portable games, Nintendo Switch and sanitizers.
"The increase in online sales (ranging from 15% in South Korea to 73% in Hong Kong) reflects not just an increase in the penetration of online for grocery shopping (more than 30% of online shoppers claim they never bought groceries online before) but also ... a significant increase in the size of the basket," said Andrea Borelli, MD of Nielsen Hong Kong and Macau. "For example, in Hong Kong, in the first three months of 2020 the average repertoire of the online grocery purchase has increased by 63% compared to 2019, indicating that consumers are now buying many more items online."
As working from home becomes the default state, brands are trying to capitalise on shifting consumer sentiment and tastes, Nielsen noted. For example in Japan and South Korea, consumers are more attracted by home care products that offer anti-disease and anti-germ benefits, as well as food products that claim complementary benefits around protecting the immune system or providing energy boosts. "Innovations in these fields across various categories can better and faster reach consumers via the online channel and therefore offer another reason for consumers to experiment and change their repertoire," Borelli added.
While online sales may be booming, the opening up of bricks-and-mortar stores gives brands an opportunity to reposition their offerings during a pandemic. Brands in segments such as cooking, working and exercising are some examples of these activities that confined consumers are investing in to make their homes and work setups more viable.
This is an opportunity for brands to benefit from this change, either directly by offering convenient solutions (products and services) which help the consumers in this experience (for example to be a chef at home, work effectively from home, or take part in sports at home) or indirectly by leveraging this new consumer environment in communications.
As consumers return to offline stores, there are some signs that retailers are recasting their shelf space to deal with the new normal in developed Asian markets. For example, in South Korea, the number of SKUs available for hand sanitisers has increased by 60%, whereas categories like baby food and chewing gum have seen their assortment dropping by 15% to 30%.