Asian countries are absorbing the COVID-19 pandemic at markedly different rates, with the impact just beginning to bite in India and Indonesia even as China sees new cases stabilize and local transmission is contained - Photo by Mckinsey

JAKARTA (TheInsiderStories) – Asian countries are absorbing the COVID-19 pandemic at markedly different rates, with the impact just beginning to bite in India and Indonesia even as China sees new cases stabilize and local transmission is contained.

Over the last month, McKinsey has twice taken pulse surveys of consumer sentiment in China, first on Feb. 21 – 24 and again on March 23 – 30, when we also conducted initial surveys in India, Indonesia, Japan, and South Korea. Sample sizes varied from 582 people in India to more than 1,000 in China.

Consumers across these markets demonstrate varying degrees of confidence in the prospects for economic recovery, with those in earlier or later stages of the outbreak significantly more optimistic. These sentiments are likely influenced both by their awareness of the disease, recently announced government contingency measures such as movement restrictions and business rescue plans, and other news events.

In China, consumer confidence has stabilized, with optimism that the economy will rebound in two–three months rising to 47 percent of respondents in late March from 43 percent the previous month. For the remaining four countries, we will refresh responses on a regular basis to track how consumer sentiment evolves.

According to our research, most consumers expect their routines and personal or household finances to be impacted over the next two–six months. The exception is Japan, where a significant proportion expect the impact to last for more than seven months.

Interestingly, when asked how they expect to manage their household finances over the next two weeks, consumers in all surveyed markets said they expect both their income and savings to decrease, regardless of their expectations for economic recovery. Korean consumers were most pessimistic about the prospects for their income, while Indonesian consumers led in terms of expectations for decreased savings.

The safety of family and overall public health are primary concerns, especially in India and Indonesia, while fears over economic stability and not knowing how long the crisis will last feature more prominently in Japan, South Korea, and China.

Consequently, most consumers are doubling down on essentials such as groceries, household supplies, and in-home entertainment (for those countries with movement controls or shelter-at-home policies in place), while discretionary categories like eating out, apparel, consumer electronics, and hospitality are likely to see significantly decreased spend in the next two weeks.

In Korea, the net intent to avoid quick-service restaurants is as high as 74 percent, compared with 22 percent in China. For consumer electronics, the net intent to reduce spend is about 40 – 60 percent in all markets apart from China.

Meanwhile, most consumers expect to spend more time engaging with live TV and news broadcasts, online news, and entertainment, whereas print news consumption is set to fall across the board. The COVID-19 pandemic is evolving rapidly, deepening the uncertainty for consumers and the economies they sustain.

Consumer mindsets will continue to shift as governments and central banks introduce unprecedented countermeasures and stimulus packages to mitigate potential impacts. Keep pace with the latest McKinsey perspectives on the impacts of COVID-19.

By Johnny Ho, Aimee Kim and Naomi Yamakawa from Mckinsey