Skip to content
Risks and Opportunities in Smart Retail Amid the New Coronavirus Epidemic

Risks and Opportunities in Smart Retail Amid the New Coronavirus Epidemic

The sudden outbreak of the novel coronavirus has disrupted everything over the past month. Traditionally, the Chinese New Year is a prime time for marketing; this year, sadly, relevant marketing campaigns hurriedly lined up to take a bow before launch amid the new coronavirus crisis. It is business unusual, and huge challenges and uncertainties are overshadowing the retail growth outlook for 2020, posing daunting problems for marketers and advertisers.

Epidemics fan e-commerce and O2O demand

The sharp decline in customer flows and the temporary closure of retail stores are dampening retail activity in Q1 2020. Instead of the traditional fresh market, consumers buy food items online. The epidemic therefore is increasing the demand for e-commerce as well as online to offline (O2O) delivery services, and the uptrends are particularly apparent for fresh foods.

Analysis of relevant data before and after the 2003 SARS outbreak underlines major epidemics do change consumer purchasing habits; notably, outbreaks of epidemic diseases will usher in colossal growth opportunities for sectors engaged in health care, health and convenience products and services. Meanwhile, data as of June 2019 shows China has more than 800 million Internet users, with an Internet penetration rate of over 60%. In China, the Internet is part of life. Given that omni-channel is now the norm in the consumer and retail industry, e-commerce and O2O services are playing a key role in people’s life in the new coronavirus epidemic.

Digital transformation, differentiated competition and integration among giants


Look at hypermarkets (i.e. superstores that combine a department store and a grocery supermarket). The reduction in customer flows subsequent to the virus outbreak is within projections. Their large scales of operations mean they are in a favorable position to adopt more flexible business models and multi-channel development strategy to find new growth opportunities via active digital transformation.

To new consumer communities such as Hema Fresh, differentiated competition gives them an edge in customer acquisition. Hema Fresh is Alibaba’s online and offline hybrid grocery stores, a data and technology-driven new retail platform. It stands out with high-speed, high-hygiene refrigerated transport logistics capabilities for its online fresh food purchases, promoting home delivery within 30 minutes. Drawing in new consumers and attracting customers to put more in their shopping baskets are vital to the growth of brick-and-mortar retailers while O2O services are evolving into standard practice in the retail sector. Yet, their response during the new coronavirus epidemic has been quick by rolling out shopping and delivery methods that require no physical contact and other innovative services to meet customers’ expectations.

Will rebound from rock bottom mean “retaliatory” consumption and new opportunities?

DiagramThe diagram above indicates during the SARS epidemic in 2003, total retail sales of social consumer goods fell sharply in the short term, followed by a fierce subsequent rise. As the epidemic faded out, the value of retail FMCG (fast-moving consumer goods) purchases shot up beginning from June that year after free fall in April and May. Hence, the current retail downturn should be just darkness before dawn. The Chinese government is implementing unprecedented containment and health measures to combat the new coronavirus. It is expected that the worst will be over in one to two months, after which enterprises will be presented with bright prospects—this is a get-set-go moment. In the medium and long-term horizons, this new coronavirus epidemic is forecast to drive daily necessities and apparel retailers to shift to high gear in their e-business and omni-channel development, which will speed up their transformation to smart retailing.

E-commerce and smart retail development accelerating

E-commerce business development now tops the agenda. Enterprises are upping their digital advertising investments to compete for online market shares. The increased online activities and more intensive promotional efforts are predicted to stimulate online sales growth. All this will result in a virtuous cycle. It is forecast that smart retail development will be strategized at a faster pace as strategic cooperation and resource replacement with major e-commerce platforms deepens. 

Epidemic situations put enterprises’ crisis response ability to the test. The current new coronavirus epidemic is highlighting the revenue role of e-commerce and O2O for retailers. There are digital marketing solution providers ready to assist and facilitate enterprises to implement successful e-commerce and O2O strategy. As the leading omni-channel marketing technology company specialized in the China market, iClick offers multi-channel network (MCN) end-to-end marketing solutions covering dominant social platforms and over 1,700 mid and top tier key opinion leaders (KOLs) in China to help global advertisers make the most of social commerce and smart retailing in order that they can sell to target Chinese audiences. Above all, enterprises must look to smart retailing and digitization to ensure uninterrupted operations and business growth in the interests of both themselves and the society.


More Insights

China's Outbound Tourism on the Rebound: What to Expect for 2024

May 23, 2024

In this newly released whitepaper, “2024 Chinese Outbound Travelers Whitepaper”, iClick collaborated with industry leaders such as Qunar and Ocean Engine, along with a market research firm, to provide comprehensive insights for brands and marketers. These insights provide a deeper understanding of China’s outbound travel sector and the latest consumption trends, empowering marketers to make strategic decisions.


iSuite Insights Spotlight – Issue #15 Chinese Consumer Behavior Towards Hotel During Golden Week

May 22, 2024

Chinese high-net-worth consumers are willing to spend on luxury hotels for high-quality hotel services. According to Statista, the Chinese hotel market is expected to reach USD 93.62Bn by 2024, growing at a CAGR of 4.72% from 2024 to 2028. To win over consumers in the market, most luxury hotel brands actively engage with audiences via rich brand content and visual stories to present the luxurious lifestyle on social media.



May 11, 2024



iSuite Insights Spotlight - Issue #14 Exploring China's Dynamic Sports And Fitness Market Trends

March 28, 2024

In the bustling landscape of China’s sports and fitness market, KOLs have become a significant force in driving consumer behavior and influencing purchasing decisions. Opportunities abound for brands seeking to capitalize on this trend. According to Statista, China’s sportswear market value reached USD 43.6 billion in 2023 and the estimated YoY growth of the Chinese sportswear market is 4.3% for 2024.


What is XiaoHongShu (Little Red Book) – iClick Interactive

February 19, 2024

Discover Xiaohongshu, the revolutionary Chinese app blending social media and e-commerce, with over 200 million monthly active users, mainly young women.



January 30, 2024



Exciting News: iClick Teams Up with MaiMai for an Exclusive Partnership!

January 29, 2024

iClick is thrilled to announce our appointment as the Exclusive Overseas Agency for MaiMai (脉脉), the leading professional network in China!


What is Travel Retail Marketing: Trends, Growth & Strategies

January 9, 2024

Take a closer look at the world of travel retail marketing — a strategy for unforgettable shopping in duty-free zones tailored for travelers in China.


Top 10 Most Popular Chinese Social Media, Sites & Apps

January 8, 2024

Discover the influence of China's social media scene! Learn the top 10 platforms and delve into impactful marketing tactics to engage with a billion users.


We use cookies to give you the best digital experience. By continuing to browse this site, you give consent for cookies to be used.  To learn more information about the use of cookies, please visit our cookie policy.