Entrepreneurs can offer products or services that meet one’s basic needs and safety as consumers buy online and slowly return to stores under the new normal.
Nielsen Philippines managing director Patrick Cua said the consumer behavior drives the categories that are going to win in 2021.
Cua said health measures become integrated in “all walks of life” amid the impact of coronavirus disease 2019 (Covid-19).
“Consumers prioritize essentials, stretching their money for old and new needs while still embracing online and convenience,” he said during an e-commerce convention series of Lazada. “(They are) becoming more risk averse, seeking products/services that deliver value, quality and peace of mind.”
Cua said affluent and mid-income homes expand or retain purchases of beverage categories and cooking ingredients, while indulgences of lower income homes such as chocolates and spirits are deprioritized.
“Just like in offline stores, online baskets now filled with essentials,” Cua said, noting food delivery and food and non-alcoholic beverages (NAB) are replacing fashion as the top category bought online.
“It doesn’t mean to say that there is no opportunity in fashion. You could still think about as more people stay at home, what would they wear at home more? So they probably would be wearing shorts, pajamas so those particular categories should enjoy some benefit from staying at home…,” he added. In the second half of 2020, Cua said other products that enjoyed good patronage online were laundry and home care, personal care, and pharmaceuticals/supplements; and gadgets or electronics.
He also identified “homebody reset” among the key Covid-19 consumers’ behavior reset wherein they prioritize in-home spending over discretionary out-of-home expenses.
Cua said consumption is expected to happen at home amid the homebody economy, citing the work from home arrangement and online education.
“We found out that more people are cooking so home cooking is more prevalent and food deliveries,” he added. “As they spend more time at home, their sentiment also shows that they economize, they want to have family bonding, and the gatherings are more intimate now. The food servings are smaller because of mobility restrictions and it’s not allowed to have big gatherings.”
Cua said the demand for gadgets is also rising as a result of staying at home.
“So, more and more people are watching streaming, and as more people are staying at home, they will also notice more that they need a new appliance, they will need a new electric fan, they need to have a new laptop in order to be able to be connected, (and) you need to have working devices. These types of categories enjoy a good patronage from our shoppers because more people are spending or trying to look for home entertainment so these could also manifest in different ways like plants and different hobbies –cooking would be a hobby and, also pets,” he said.
To find business opportunities, Cua thus advised entrepreneurs to offer products or services that satisfy the needs especially of those staying at home.
“Because every day they wake up, that becomes their office, that becomes the area where they want to make their families happy, make their children happy, what can a parent give? Or if I am a single millennial, I’m spending here, how can I show that I’m doing okay so what products can I offer? So in order to be successful, you need to adjust and make sure you have the right product offerings that are driving the consumer behavior,” he added.