Lessons from China's Recovery Post-COVID-19: Consumer Goods and Service Sector Analysis

March 2021

Coronavirus (COVID-19) has left a profound impact on China’s consumer goods and service sectors. China was the first major economy to recover to pre-pandemic levels; Euromonitor International’s analysts on the ground in China deliver insights into the recovery stories and lessons one year from lockdown on eight industries. These insights on consumer behaviour changes and industry trends might also follow in other regions that are stepping into recovery.

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Key findings

Repatriated spending and cautious consumption

Economic instability changes consumer spending behaviour in a more profound and complicated way. Repatriated luxury expenditure from the young affluent class is surprisingly resilient, but mass consumers were looking for short-term budget targets not directly related to health and hygiene, when making no compromise for hard hygiene products, ie disinfectants. Corporates need to be aware of consumers’ shopping prioritisation and opportunities in expenditure flow (shift to domestic market) amid and post-COVID-19.

Consumer interest in health and hygiene heightened and remains

Consumer awareness of emotional and physical wellbeing has been heightened by the pandemic and will stay. Despite cautious spending likely to linger for mass consumers, holistic health, home hygiene and internal happiness are nevertheless long-term shifts and should be the focus of corporates’ recovery and innovation strategy. NPDs that focus on strengthening immunity, creating a hygienic and comfortable home, as well as happiness enhancement solutions have proven valid in China.

Digital agility key to corporates

Corporates need to rethink about going digital and grow agilely. Strengthening e-commerce to achieve channel diversification is merely one aspect of building digital agility in the post-COVID-19 era - boundless engagement with consumers through a mix of omnichannel marketing tactics and digital solutions that redefine offline business are even more crucial to shape agility and grow resilience in the face of disruptive incidents such as the pandemic. Corporates should also be ready for organisational restructure to facilitate agility.


Key findings
Multiple industries in China show distinct signs of recovery


Digital transformation leads the way for retailing recovery
High uptake of livestreaming amid COVID-19 pandemic
Physical store reshapes its role in response to changing consumer behaviour

Beauty and Personal Care

BPC market rejuvenated as normality returned
Digital strategy is vitally important for BPC players
Skin health becomes one of the prime focus of skin care products

Consumer Appliances

China’s consumer appliances market saw remarkable recovery since Q2…
…but the recovery pace of construction outstripped offline retailing
Health and connectivity are the focal points of new product launches

Consumer Health

Consumer health saw contrasting growth patterns in the recovery phase
Immunity positioning widens to broader health concerns
Expanding in online marketplace as immediate response to offline slump

Home and Garden

Resumed offline channels in Q2 help home products begin recovery
Virtual in-store experience a must to close the service gap for online space
Hygiene-driven innovation gains traction

Home Care

Consumers are trading down in laundry detergents and hand dishwashing
Brands are rolling out more budget-friendly products via e-commerce
Categories featuring strong disinfectant effects post robust growth


Domestic luxury consumption was boosted due to travel restrictions
Undiluted consumer confidence leads the recovery
E-commerce becomes new battleground for luxury brands


Domestic travel leads the short-term recovery
Pre-paid products help the industry to survive through its darkest hour
Hygienic safety approach to sustain revitalisation post-pandemic


Key findings


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