HAVAS GROUP CHINA MARKET UPDATE NCOV - FEBRUARY 21 2020 - HAVAS CREATIVE
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
HAVAS GROUP CHINA Market Update nCoV February 21 2020
Content
1. Situation update
2. Immediate consumption impact
3. Media consumption impact
4. Economic outlook
5. Outlook key categories
6. Media market implications
7. POV & recommendation
2
Situation update 3
2019nCoV outbreak situation
• The government continues to increase control and investment. In addition to the three new concentrated
hospitals, more than 10 temporary hospitals are also under construction.
• China has introduced the potential specific medicine, American Remdesivir for clinical use. It has shown
positive results in some patients.
• As of Feb 20th, China has reported 74,677 infections and 2,121 casualties. 1,049 cases have been
confirmed outside China and the virus has spread to 25 countries. Outside the Hubei providence, some
areas including important economic regions, Shanghai, Beijing, Guangdong have achieved zero or few rate
of infection in 5 days.
• Many companies have extended the back-to-office time to February 23, and some will not open until the
end of February. But most companies have already resumed work remotely since February 10. Controls
are expected to be revoked in most provinces in March, social activities will gradually restore then.
4
Consumption impact 5
Consumption impact differs per category. After the outbreak:
products for immediate enjoyment and (health) security to increase
Source: Kantar
6
Clear reduction of outdoor activities during the outbreak. Dining
out, travel, and out of home entertainment will rebound sharply
During outbreak After outbreak
Source: Kantar
7
During the outbreak different FMCG characteristics: stock up
goods increase, socially non-necessities decrease
Category sales growth rate in Tmall, 2020 CNY
Bubble size - GMV of 25th Jan – 6th Feb influence
Non-necessities Non-necessities Short-term Stock
（Social Activity) （Household) Necessities up goods
0% Oral Care Dry food
Body Care
Regular online penetration
Wine
Dairy Vege Instant food
Meat
Bai Jiu Spirit
Beer Beverage
Egg Household
cleaner
Confectionery
Grain 316%
25%
Pet food
Skin Care
Baby food
50%
-50% 0% 50% 100% 150%
Category growth rate vs. last year same period
Sources: Bain & Alibaba
8
Learning from SARS: stock up goods and necessities will return to
normal after outbreak, non-necessities to see retaliatory consumption
2003 retail YOY growth rate by category
Q2 SARS outbreak
Short term stock up Fast return to normal Retaliatory consumption
Apparel
Medicine Food
Liquor & tobacco
Household Beauty
cleaner Beverage
Sources: Bain & Alibaba
9
Retail: offline is facing 20-50% turnover drops while online shows
a booming momentum, especially O2O
Offline channel is facing heavy challenges, Especially, O2O platform gain
while online see good momentum attraction during the epidemic
>20% >50%
Supermarket E-Commerce
User: +97%
~50% >2X
Traditional O2O
Frequency: +15%
small shop
Beverage category as proxi
Source: Bain, Kantar
10Media consumption impact 11
Media consumption shifts and shows digital and TV benefiting
from people spending more time at home
• With estimated 50 million people having been quarantined at home across China, digital and TV are clearly the key media
channels benefiting from a surge of media consumption. With the extension of CNY holiday and restrictions the
consumption of TV and online entertainment including TV series, movies & games have gone up significantly.
• During the CNY period the overall daily TV audience size went up from 690 million to 718 million, also viewing time and
rating increased significantly.
TV Daily Rating Viewing Time (Mins) TV Daily Audience Size
2020 Spring Festival (7Ds) 13.5% 194 718
2019 Spring Festival (7Ds) 11.4% 164 690
• TV has become the key shared media for families to stay updated on information about the novel coronavirus, particular
in lower city tiers.
• All TV stations’ broadcasted more content skewed towards news (8.8% of total content, increased by 1.5% vs the last year
CNY period). News mentioning “n-COV combat”, ”anti-epidemic”, ”we stand together” etc. accounted for 10% of total
news programs broadcasting time.
• The rating of CCTV and PSTV CNY gala has reached a peak of recent years and news programs have attracted higher
audiences. Also OTV viewing time has increased significantly. During the extended CNY holiday, TV and OTV providers met
the increased demand and showed a refreshing media vitality.
12TV rating spike as people spend more time at home
The COVID-19 outbreak leads to a remarkable rise in TV ratings Reach of TV has risen significantly, especially in Tier2 and lower
tier cities.
12 Before VS After 75 74
Tier1：+57%
11 Tier2：+67% 11.2 72.5
Others：+74% 10.7 71.7
10.1 71
10 9.8 70
10.1
9.7 68.9 67.6
9
65.8
65
8 64.5
7.8 63.5
63.2
7.3 64.4 62.9
7.1 62 62.1
7
60
6 6.1
6 5.9 56.9
5.8 5.7
5 5.2
4.9 56.3
5 55.8
55
4
3 50
(2020/1/1 - (2020/1/5 - (2020/1/12 - (2020/1/19 - (2020/1/26 - (2020/2/2 - (2020/1/1 - (2020/1/5 - (2020/1/12 - (2020/1/19 - (2020/1/26 - (2020/2/2 -
2020/1/4) 2020/1/11) 2020/1/18) 2020/1/25) 2020/2/1) 2020/2/8) 2020/1/4) 2020/1/11) 2020/1/18) 2020/1/25) 2020/2/1) 2020/2/8)
Tier1 Tier2 Others Tier1 Tier2 Others
Source: Infosys, Target:P18-45, Period:2020/01/01 – 200/2/08, Timeslot: All Day Tier1 including（BJ、SH、GZ、 SZ）,Tier2 including almost Provincial capital
13PSTV’s share is on the rise
Due to its unique and high quality resources, PSTV’s share is on the rise.
2020 Jan Channel%
35
32.3
CCTV(National
30
coverage)
21 Channels
25
PSTV(National
21
coverage)
20
51 Channels
15
15
PTV(Provincial coverage)
257 Channel(including
10
BJ/SH/TJ/CQ)
5.1
5
LTV(City coverage)
1032 Channels 0
CCTV PSTV PTV LTV
Jan
Source: Infosys, Market: 57 Markets, Target:P18-45, Period:2020/01/01 – 2020/1/31, Timeslot: 1800-2300
14Top 5 CCTV channels see strong ratings due to the outbreak
• CCTV1 and CCTV 13 increase their channel shares • Although share of Hunan STV is still ahead of the rest
because of the news content. provincial STVs, audience shift to CCTV channels after the
coronavirus pandemic. This results in top 5 STVs drop on
shares.
Channel Before After Channel Before After
CCTV1(GENERAL) 2.3 4.2 83% Hunan STV 5.9 4.4 -25%
CCTV6(MOVIE) 3.4 3.5 3% Zhejiang STV 4.0 3.1 -23%
CCTV13(NEWS) 1.3 3.4 162% Jiangsu STV 4.4 2.8 -36%
CCTV3(VARIETY) 1.7 2.0 18% Dragon TV 4.2 3.6 -14%
CCTV4(INTERNATIONAL) 1.4 1.8 29% BTV 3.3 2.9 -12%
CCTV PSTV
Source: Infosys, Market: 57 Markets, Target:P18-45, Period:2020/01/01 – 2020/2/08, Timeslot: 1800-2300
15Top TV programs in Jan 2020
Drama
• During Jan of 2020, Hunan STV should be the winner in drama field.
Hunan STV Hunan STV ZhejiangSTV Dragon STV Jiangsu STV
下一站是幸福 大明风华 决胜法庭 新世界 还没爱够
Ave Rtg 1.74 Ave Rtg 1.70 Ave Rtg 1.52 Ave Rtg 1.33 Ave Rtg 1.32
01 02 03 04 05
Variety
• CCTV-1’S Spring Festival Gala is No.1, “Chinese Idol” still have high rating performance variety show on STV.
CCTV-1 CCTV-1 Drogan STV- Drogan STV- Hunan STV-
鼠年春晚 元宵晚会 春节晚会 中国梦之声 春节大联欢
Rtg 5.5 Ave Rtg 3.1 Ave Rtg 2.0 Ave Rtg 1.9 Ave Rtg 1.7
01 02 03 04 05
16TV - Program update
Hot documentary
中国医生 Chinese Doctor
Period: 2020 Jan. 27th – Feb. 24th
Episodes: 9
Media: IQIYI
Introduction
Coinciding with the outbreak of Coronavirus in China, netizens have developed a strong
interest in the great career of doctors, and have developed great admiration for doctors in
the process of watching this documentary. The documentary, which truly shows the status
quo of the medical profession, was greatly sought after by netizens during the quarantine.
Source: https://mydramalist.com/49977-ipartment-5 Accessed 20 Jan. 2020 17TV - Program update
Hot drama
上古密约 Ancient conspiracy
Period: 2020 Feb. 11th – Mar. 30th
Episodes: 36
Cast: 吴磊、王俊凯、宋祖儿
Media: IQIYI、Mango TV、Hunan STV
Introduction
Five thousand years ago, they were brother and sister. In order to join forces to lock the
demon, Baili Hongyi sacrificed himself and sealed Jiuying in his body. Sishen also sealed his
spiritual power and memory, so that this legend would never disappear in history. Only
"autumn god" An Tingfeng, because of the love of not give up, did not completely seal their
spiritual strength and memory, eternal, immortal, become a lonely soul. Therefore, in this
life, he planned to release the evil beast Jiuying and return the world to chaos in order to
put down the unbearable weight of life and die.
Source: https://mydramalist.com/49977-ipartment-5 Accessed 20 Jan. 2020 18TV - Program update
Hot variety
朋友请听好 Listen to Me, My Friend
Period: 2020.2.19
Episodes: 12
Cast: 谢娜、何炅、易烊千玺
Media: Mango TV
Introduction:
He Jiong invited his long-time host partner, Xie Na, and several other friends to set up a radio
station on a rooftop in a community. They are collecting letters and stories across the country
for their radio program.
19TV - Program update
Hot drama
大唐女法医 Miss Truth
Period: 2020 Feb. 14th – Mar. 30th
Episodes: 36
Cast: 周洁琼、李程彬、裴子添、蓝博
Media: IQIYI、Youku、Tencent
Introduction
This drama is adapted from the novel of the same name of sleeve Tang dynasty, told about
ablative and wealthy female Ran Yan in order to find out the truth of her mother suicide.
Having learned learn autopsy from childhood onwards she join hands with the criminal
department assistant minister Xiao Song to solve a murder cases. In the process of seeking
the truth they meet true love.
Source: https://mydramalist.com/49977-ipartment-5 Accessed 20 Jan. 2020 20TV - Program update
Hot variety
欢乐喜剧人第六季 Top Funny Comedian Season Ⅵ
Period: 2020 Jan 26th – Apr. 12th
Episodes: 12
Cast: 贾冰、潘斌龙、郭德纲
Media: IQIYI、Youku、Tencent、Dragon TV
Introduction:
This season takes five progressive segments, compared with the previous season segments
are more intensive and brutal.
Source: https://mydramalist.com/49239-detective-chinatown Accessed 20 Jan. 2020 21Digital consumption time has kept increasing
Source: Questmobile
22Within digital short video, OTV, news and social see the highest
increases, with new formats and accelerating KOL economy
Change of media touch point Slow live streaming
New hospital in Wuhan was estimated to
build up in 10 days. Based on 5G tech,
Percentage of significant increase
CCTV live streaming the whole process 24
hours everyday. 110+ million people watch
on 2.8, 260+ million comments in Weibo
Percentage of mention
Slow live streaming is considered as more
real, and people can supervise through
video
KOL economy accelerate
With short video usage increase, KOL
economy is estimated to reach 340 billion
RMB in 2020
KOL play a role during outbreak – Weiya
donate 1 million goods, Lijiaqi helped to
raise 71.4 million RMB
Source: Kantar
23Top 10 fast DAU increment APP, driven by short video
Source: Questmobile
24Social gains more user and time than usual
Source: Questmobile
25Within Social, WeChat and QQ reporting strong growth
Source: chinaskinny
26Short video skyrockets with big increase in DAU and user time
• Due to the epidemic people have more time and use short video APPs for entertainment and information
• Douyin increase of almost 40% YoY, Kwai reports a growth of 35%
Source: chinaskinny
27Short video became a key window of information, having
hundreds topics related to epidemic
Epidemic related Lost in Russia premiere on short Bytedance eroding ad
topics on Douyin video, bring obvious user increase revenue share from BAT
Overall reached
600 Million Click
180 Million Watch
Source: Questmobile Mobile Internet “Coronavirus” Report
28Also daily active usage of OTV increases significantly
Source: chinaskinny
29Key moments and shows
Source: chinaskinny
30News APP gain huge attention during the outbreak, with Toutiao
leading
Source: Questmobile
31Consumers spent more time playing e-gaming, with ‘Honor of
Kings’ leading the way
Average time Chinese mobile gaming users Average time Chinese user spent daily on top-
spent playing daily (minutes) 5 mobile games (minutes)
CNY 2019 CNY 2020
159
135 194
113
124 127
111
99 94
56 49 51
38
CNY 2019 Regular 2020 day CNY 2020 Honor of Kings PUBG Mobile Anipop Happy Poker CrossFire
Source: Questmobile Mobile Internet “Coronavirus” Report
32Not surprisingly OOH and Cinema take biggest hits during the
epidemic
• For offline OOH taking the biggest hits as people spend more time at home and
have limitations to go out. However the negative impact is expected to be short-
term and recovery during Q2 is predicted
o In building LCD, so far only those that need manual change materials are affected, wireless control
formats LCD are normal
o Elevator posters. Can’t be operated due to community access control
o Metro and bus shelter publishers have not started working, no booking change is accepted yet
• Cinema is facing many challenges as many movies declared to postpone their
release dates due to the government policy on closing all public entertainment
places.
Bytedance struck an exclusive deal of around $100M to premiere the film Lost in Russia (directed by Chinese
famous director Xu Zheng), releasing on its Toutiao, Douyin & Xigua App for free after all theatrical releases
were cancelled due to the outbreak. The film was viewed by over 180M UV (forecast around 40M if played in
cinema) on Bytedance’s apps.
33Cinema is predicted to bounce back after the outbreak
• Online poll show that 64.2% of people will choose to go to the cinema after the outbreak is over and theatres
re-open.
• The Labor Day with 5 holidays in total this year, is expected to bring in more than 5 billion yuan at the box office.
• Summer and vacation period accounts for about 30% of the annual box office. The canceled and unscheduled
movies are likely to be released during this period, and a wave of box office growth is expected.
Data source: EntGroup Focus film 34Economic outlook 35
China 2020 GDP growth will fall under 6%, most likely to 5.4%.
Besides it is expected to slow down global GDPs
China GDP growth rate per year (%) Estimation impact of the Coronavirus
in different Coronavirus containing scenarios on the growth of global GDPs (Q1 2020)
8
6.7 6.8
7 6.6
6.1
6 ~6.0
5.7 End in Feb, 25% possibility
5 5.4
End in Mar, 50% possibility
4.5
4
End in Jun, 20% possibility
3
2
2016 2017 2018 2019 2020E
Source: Bain; Deutsche Bank
36Even as the economy will sharply bounce back, while the impact
is expected to heavier than SARS
Longer and wider >100 M
People in
The Coronavirus outbreak is coverage “house quarantine”
estimated to cause
300 Billion – 500 Billion
RMB lose
Deeper economy
>30%
People income
impact
VS. are affected
SARS caused 100 billion
RMB lose
Significant industry >50%
impact Company delay
open
Source: Bain
37Outlook key categories 38
Travel & tourism 39
Domestic travel market is disturbed, outbound travel market still
expected overall growth
Domestic Travelers (100 Million) Outbound Travelers (100 Million)
60.2 1.68 1.81
50 55.4 1.49
44.4 46.3 1.22 1.3
2016 2017 2018 2019 2020E 2016 2017 2018 2019 2020E
Forecast rationale Forecast rationale
• Most of the domestic travels are related to visiting family especially • The majority of international, especially intercontinental, travel of Chinese
during CNY. The majority of cancelled trips are likely not be rescheduled; is done for non-leisure purposes, for business, MICE, VFR, studies, health
• Trips in Q1 were estimated to account for 20%-25% of total travel in etc., those trips will be rescheduled to later in 2020;
2020 (1,200 – 1,500 million), the drop during CNY will impact the • In 2019 44% of border crossings travel went to Greater China, 56% of travels
overall number of trips went beyond.
• In 2020 travel within Greater China is expected to see only a small increase
of 3%, given the decline of cross-boarder day-trips due to political tensions
Sources:Davost Intelligence, National Tourism Administration, Cotri Analytics
40Drop in Chinese outbound travels is felt globally as Chinese
travelers spent more on outbound travel than any other country
In 2019 the total consumption of $127.5 billion, a growth of 17%
2019
over the previous year was reported. Despite growth in other
spending categories over the year such as catering, tour guides, and Top 10 overseas shopping destinations Top 10 countries with fastest
accommodation, shopping remained firmly atop the list of Chinese for Chinese travelers shopping growth
travelers’ expenditures. Japan Holland
UAE Malaysia
Though female travelers were likely to indulge in some retail therapy UK Ireland
during overseas trips, as they accounted for 55% of all Chinese France Switzerland
travelers who shopped abroad, their male counterparts are willing to
Singapore Denmark
spend more. The average retail expenditure for Chinese men while
US New Zealand
overseas was 1.15 times the amount of those from Chinese women
in 2019. Spain UAE
South Korea UK
Global tourism predicted to take a US$80 billion hit until the Chinese Italy France
outbound tourism will have fully recovered. Asean countries will be Australia Australia
hurt the most as the number of Chinese tourists to these US dropped out of the top 10 ranking
destinations are expected to drop by 30-40%.
Source: 2019 Chinese Outbound Travel Report by Trip.com and UnionPay international, the economist 41Travel within Greater China is impacted, especially Hong Kong
suffering due to a drastic drop of arrivals
In January 2020 Hong Kong welcomed 3.2 million
visitor arrivals only. This daily average of 100,000
arrivals equals a 53% drop compared to the 200,000
daily arrivals received in the first half of 2019. The
decrease was caused by a huge drop in arrivals from
Mainland China and short-haul markets. Average
daily arrivals recovered to 130,000 with the pre-
Lunar New Year rush in January. But the outbreak of
COVID-19 intensified the decline, as many airlines
suspended flights to the city and reduced services
overall. Preliminary data in February suggests that
the arrivals have continued to decline, with average
daily arrivals falling to below 3,000, of which 75%
were non-mainland visitors. Putting the travel and
hospitality industry, but also the overall economy
under immense pressure.
Sources: Cotri Analytics, HKTB
42Automotive 43
Key automotive events postponed
F1 postponed the event scheduled to be held
2020 Auto China (Beijing) event pending
between 17 April and 19 April
44Automotive supply chain shows
clear disruptions
• The Hubei province is a major car manufacturing
hub for several companies including Dongfeng
Motor Group, Honda Motor, Renault SA and
Peugeot SA. All companies have announced that
they will be delaying the restart of production.
• Companies that operate plants outside Hubei
including Tesla, Volkswagen, and General Motors
also announced that their factories will be closed
during the epidemic.
45The production schedule is impacted
The extra vacation days of some Automotive Time distribution of part of auto production base
parts enterprises
4.40%
Government announced delay 0.50%
for resumption of work. 12.60%
36.50%
52.50% 37.90% 43.70%
Employees Required to stay at
home for 14 days after they
came back from holidays Work resumption before 2.10 Work resumption among 2.10-2.16
1-10 days 11-20 days over 20 days
Work resumption among 2.17-2.23 Work resumption after 2.23
The shortage of personal
protective equipment is LEAD IMPACT • Output capability
impacting resumption of work.
• Foreign venture might
• Low factory operating adjust the distribution
Restricted passage of out-of- rate;
town auto and investigate of production to avoid
• Tight supply chain overly dependence on
strictly in highway
manufacturing in China.
46Car production and sales in fell sharply YOY in early 2020
Unit:000” Monthly Sales in China
3,000
2,500
2,000
1,500
1,000
500
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Y2018 2,456 1,476 2,169 1,914 1,889 1,874 1,590 1,790 2,060 2,047 2,173 2,233
Y2019 2,021 1,219 2,019 1,575 1,561 1,728 1,528 1,653 1,931 1,928 2,057 2,213
Y2020(Forcast) 1,614
• In Jan.2020, car production and sales are expected to be 1.441Mil and 1.614 Mil.
• Sales decline 27.1% MOM, 20.2% YOY.
China Association Of Automobile Manufacturers 47The impact to the car industry: from demand and supply side
Residents reduce their desire to
buy cars
Outbreak Passenger car demand
decreased
Consumer confidence
weakened
Impact on auto sales
Auto production/marketing due to impact on supply
Controlled campaign are limited chains
To purchase car which
postponed by the epidemic
The demand for cars
Recovery and sales rebound
Stimulate consumers to buy
cars in advance
48Automobile sales forecast in 2020
Y2020 Passenger car sales trend estimation in China (‘0000)
3000 25%
Sales YOY
20%
2500
15%
2000
10%
1500
5%
1000
0%
500 -5%
-10%
0
Y12 Y13 Y14 Y15 Y16 Y17 Y18 Y19 Y20E Y20E
(no covid) (covid) -15%
Data source: 易车研究院 49Measures are taken to minimize the economic impact of the
Coronavirus
Multiple supportive measures to Sellers seeking livestreaming to
support businesses from government promote sales
• Tax and rent deductions to businesses
• Delaying loan payments
• Reducing interest rates
• Waiving overdue interest on loans
• Offering fresh loans to companies
with low liquidity
50Example of BMW using Tmall & JD livestreaming
• On 6th Feb, BMW launched “BMW经
销商掌上办公” App, support sales
consultant follow up clients at home
• BMW leveraging Tmall&JD
livestreaming to introduce different
types everyday from 10th Feb - 1st Mar.
51Luxury & retail 52
Luxury retail impacted as footfall
plummeted
Footfall in China’s boutiques and luxury shopping malls has
plunged with gov’t-imposed restrictions and Chinese
consumers social distancing. Examples:
• 24 of Burberry’s 64 stores in Mainland China are closed
with remaining stores operating with reduced hours and
seeing significant footfall declines
• Chow Tai Fook, the world’s biggest jewelry chain by
revenue has temporarily halted operations in about 80%
of its stores in mainland China
• European luxury retailer operating in China reported foot
traffic decreased from between 600-800 people in a day,
to no more than 5 customers entering the store per day
Jewelry sales expected to drop by as much as 60% In the first
quarter as in previous years Chinese Lunar New Year and
Valentine’s Day were seen as peak seasons to purchase
jewelry for gifts.
Sources: McKindsey report, jingdaily.com
53Retailers are moving quickly to online channels by launching Mini
Programs and livestreams to make online transactions easier
Hangzhou Department Store Group launched Livestreaming Initiative
with Taobao – Linkshop.com
In collaboration with Taobao, the Hangzhou-based Yintai Department
Store launched a livestreaming initiative for thousands of sales
assistants to continue to work at home. Backed by Alibaba’s
investment arm, Yintai is a local retail giant in its home province of
Zhejiang, and owns 65 department stores across China.
So far, over 50 of Yintai’s tenants, including Estée Lauder, Lancôme,
Kiehls, Nike, and Fila have joined the initiative.
54Opportunity to communicate comfort, encouragement, softly
connected with products and launches
As massive store closures are hitting the industry, brands can only seize opportunity online. In addition to provide financial or
material support in the first two weeks, some nimble brands have started to leverage the power of words supporting consumers
spiritually and marketing products tactfully.
I’m dying for the copywriter!
Waiting for the spring, waiting for the
restful world back
The first time I want to buy a bag just
…The unknown of life and death, the because of the copywriter!
fear of illness, the loneliness and
Wow so hopeful!~ I want to hangout loss…I don’t know how to show my
with my new bag! love…
I come Gucci to read love poems
…When the haze passed, we will
meet in the sun…we are waiting the Brilliant copy writer!
day meeting in the spring…
55Media market implications 56
The virus outbreak is also impacting the ad market forecast for 2020
• Digital is expected to grow significantly. Also TV is expected to increase given the positive trend on view
time and ratings increased investment will follow.
• Whereas ad spend for outdoor and cinema are expected to decline. The negative trend for print remains.
Previous forecast by media channel Current forecast by media channel
25%
20%
20%
15% 14%
10%
10% 8%
5%
5% 3%
0%
-1% -1% -1%
-5%
-6% -6%
-10%
-10% -10% -10% -10% -10%
-15%
Source: MAGNA; www.sohu.com; CODC OOH research
Note: excluding media spending on social and search; discounts are estimated based on Havas methodology 57POV & recommendation 58
Recommendation on marcom and investment
1. Estimate your business impact and how the following developments effect your category:
• From a historical experience, consumption is expected to rebound shortly after the epidemic.
• China has a more active and developed retail, e-commerce and logistics industry now,
compared to the SARS period, middle class grew about 7 times since. Consumers have high
spending power.
• Especially products for immediate enjoyment and (health) security will increase.
• Additionally the Government announced policies to boost the economy as well as domestic
consumption.
2. Continue to keep brand exposure:
• It is important to maintain the consumers brain position of your brand.
• Higher media inflation is expected in the post-Corona period and shortage of inventories
59Recommendation on marcom and investment
3. Focus on the post-Coronavirus period, try to pre-empt with pressure on branding and pursue
more tactical campaigns in the post period:
• Many (international) brands will quickly rebound. China stays the market with highest
growth in the world and is the key growth driver for many industry like luxury, tourism,
lifestyle and automotive.
• Some product launches have been postponed, they will be launched shortly.
• Many brands will do promotions to recoup sales loss
4. Be cautious with social discussions or relating your message to the epidemic. As people have
been quarantined at home for a prolonged period, they are in not in a positive mood yet.
Therefore, any content or social campaign which aims to borrow traffic or sentiment from the
epidemic is risky.
60Recommendation on media strategy
1. The Coronavirus development is taking place in three phases with different media consumption
pattern. Havas Media will work with clients to adjust their media strategies accordingly. After the
outbreak period we are now in Phase 2 of stabilization.
Phase Digital TV Outdoor
Focus on digital media as it will remain their primary
Drop in spending. Focus outdoor
Phase 2 source of consumption and less time will be devoted As consumers return to work, daytime
media concentrated commuting
Stabilization to entertainment than in the beginning. ratings will decline and evening prime-
routes, residential Media / lift Media
Feb 9 -End of the outbreak OTV, social and news content will occupy most time ratings will hold up
and in BCDs
consumers' time
Phase 3 Gradually return to normal. Higher inflation rates
Return to the original usage pattern Gradually return to normal
Post outbreak - Recovery expected for platforms popular during the outbreak.
2. Lock premium resources for the post outbreak period
3. Look for opportunity buys in media types that have been highly effected: OOH, transport media and
cinema
Additional notes:
It is estimated that TV, online video, short video, news app’s usage and stickiness will greatly increase. So far, the Chinese national and top media have opened “Fight Against
Coronavirus” column to rolling update the real-time epidemic status from Jan 20,2020. Which almost fully catch the Chinese audience’s attention.
61SHANGHAI
11/F Novel Building
887 Huaihai Zhong Road
Shanghai 200020
+86 21 3397 8666
BEIJING
1006, 10th Floor, China Youth Plaza,
19 Dongsanhuan North Road,
Chaoyang District,
Beijing 100020
+86 10 5923 2791
GUANGZHOU
Room 07, 16/F CTF Finance Centre,
No 6 Zhujiang Road East, Tianhe District
Guangzhou 510130
+86 20 3877 3282You can also read
