COVID-19 has led to many new trends in consumption, and businesses now need to flexibly adapt to prevail.
As a food provider for restaurant kitchens, Mr. Hoang Hung had no choice but to watch his business went downhill as his long-term partners closed due to Covid. The traveling restrictions and social distancing measures employed in March had also led to challenges in goods delivery between regions. Despite already establishing online channels from before, Mr. Hung still had to consider making online sales the major channel to survive through the pandemic.
“Online sales were up 40% in comparison to previous the previous year end. However, we had need to quickly provide training and hire more employees for online customer care, as well as invest in more promotions and free shipping to retain customers,” said Mr. Hung.
He also added that most customers are enquiring more about their product origins as they cannot see the products for themselves. This stemmed a new question of how to convince customers and manage them from afar.
Another large manufacturer is also facing similar problems, except on a much larger scale – they are seeing serious falls in revenue, working capital, teamwork spirit, and experiencing interruptions in the supply chain.
COVID-19 has led to new consumption trends, and businesses need to solve urgent problems, quickly recover, and adapt to their customers.
Cutting down spendings
The retail industry had been directly affected by the pandemic – with reductions in total demand and sales as consumers tend to save, delay purchases, and cut down on non-necessities, especially during this tough economy. According to a Nielsen report on the influence of COVID-19 on consumption in Vietnam, over 50% of people are visiting stores less, 52% are storing goods at home, and 82% are trying to reduce eating out.
Alongside dropping sales and purchasing abilities, retail firms are also facing instabilities in the supply chain and operation capitals. A Vietnam Report statement had said that during this year’s second quarter, there was a 21% increase in retail shutdowns compared to the same period last year.
But there are always two sides to the same coin, and retailers can find their way to opportunities despite the pandemic. Commuting restrictions had let to more people turning to online shopping, and with it came the boom of e-commerce. This preference is clearly demonstrated in Nielsen Vietnam’s recent survey, which stated that 63% of people surveyed agreed that they are shopping online more. Meanwhile, 35% are spending more time watching online contents, and 25% are doing online shopping.
But not every business is ready to adapt – some are lacking in platform, some are unprepared. Only those who are invest in technological solutions, improving accessibility, and generating new customer experiences, are going to stay. In the long-term, customers’ awareness and behavior is going to keep changing, even more drastically that at the moment, and businesses need to quickly adapt in all phases, from product introduction, shopping experience, to payment and delivery.
The growth of health products
According to Nielsen, during quarter I, close to 50% of Vietnamese consumers regarded health as their foremost priority – that is more than most of the world. Consumers are looking for standardized products with high quality, rich nutrients, and vitamins to improve their immune system.
The trend towards health is also showing in the consumer’s shopping carts. On online platforms, groceries and health products are seeing respective 45% and 32% increases in traffic. In February, demand for masks and hand sanitizers was up by 680% compared to January, according to iPrice Group and SimilarWeb.
And this is trend prevalent even before the pandemic: 69% of consumers are ready to pay more for quality and safe products – a rate much higher than the global average of 49%, according to Nielsen. The report also expressed that shoppers often prefer products with clear origins and high qualities.
The changes in consuming behavior are both challenges and opportunities to retailer – who can either rise or fall post-pandemic. This reality had stemmed the “From Survival to Prosperity” forum’s topic no.2: “Sales amid COVID-19” – hosted by FPT on the upcoming October 29, where market fluctuations of the new normal will be discussed.
At the event, leaders of Vietnam’s largest private companies will together discuss new customer preferences, new sales and distribution channels, and changes in the market. Via the discussion, businesses will be able to make accurate plans for approaching their customers and developing their markets for further growth.
Source: VnExpressRelated posts: