China’s retail sector has returned to 80% or more of its pre-COVID-19 volumes. There is a lot being written about how and why consumer behaviors are changing because of COVID-19 but much less about what these mean for retailers.

Advice for overseas retailers—which is plentiful—is not relevant to China; China is ahead in its recovery and is facing a different set of challenges.

Based on our client experience we have set out how we believe retailers in China should respond to the COVID-19 crisis to succeed and, potentially, grow in the medium term.

We believe that the changes in consumer buying habits, accelerating digitalization and re-evaluation of the role of physical stores, and fundamental changes in global supply chains are here to stay and will, if anything, accelerate, driven by worsening economic conditions and unpredictable disruption from the virus. To respond, we recommend retailers:

  • Put into place analysis of consumer trends built on all available data; to reassess your assortment and re-focus marketing spend.
  • Invest to strengthen your digital offering and re-examine the role of brick and mortar together with plan to integrate franchisees into digital solutions.
  • Identify and manage risk in your supply base and supply chain.

More critically, there is an urgent need for retailers in China to put in place business continuity plans to ensure business survival through a second wave of COVID-19 should it eventuate.

In the short term retailers should assess how well they have these covered and shape realistic plans to implement and improve.