Over 2020 till now, COVID-19 has spread across the world, uniting humanity in a shared experience that has highlighted the vulnerability of our societies. As the first country to grapple with the crisis, China has been on the frontlines of both post-COVID-19 recovery, and of the societal changes the pandemic has precipitated.
As that recovery takes shape, several important shifts in the make-up of China’s economic landscape have already become apparent. COVID-19 has accelerated pre-existing trends, ushering in the arrival of a future we were likely already on track to realise.
Trend 1 – Digitization
Digital tools became increasingly popular solutions, expanding from B2C to B2B
B2C & B2B
COVID-19 has not only accelerated digitisation in business-to-consumer (B2C) applications and channels, but also the traditionally less digitised part of the economy, such as areas requiring physical interactions, and business-to-business (B2B) processes.
Based on our mobile surveys of Chinese consumers, about 55 percent are likely to continue buying more groceries online after the peak of the crisis. Nike’s first-quarter digital sales in China increased 30 percent on the year after the company launched home workouts vie its mobile app, while property platform Beike said agent-facilitated property viewings on its virtual reality showroom in February increased by almost 35 times compared with the previous month.
Digitization is not only accelerating in the typical business-to-consumer (B2C) applications and channels, but is also gaining traction in the traditionally less digitised part of the economy, such as areas requiring heavy physical interactions and business-to-business (B2B) processes.
Trend 2 – Declining Global Exposure
Rising importance of domestic markets, technology, and capital
Before COVID-19, China had been reducing its relative exposure to the world as the majority of economic growth was generated by domestic consumption, supply chains matured and localised, and its innovation capacities were enhanced.
Global trade and investment has slowed sharply, and the movement of people has become highly restricted.