Do you think consumer spending will surge again after the COVID-19 lockdown eases? - Seedly
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Anonymous

Asked 4w ago

Do you think consumer spending will surge again after the COVID-19 lockdown eases?

There seem to be some early signs based on what we see in the first week in China?

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Kenneth Lou
Kenneth Lou, Co-founder at Seedly
Level 9. God of Wisdom
Updated 4w ago

I read a report recently about having alot of pent up frustration, cabin fever, and most importantly pent-up wallets waiting to unload into the economy once the lockdown is eased.

If you look at history as an indicator of such a 'rebound' here's an example of the Roaring 20s:

Consumerism in China (early signs of rebounds?)

In China, the day the luxury brand Hermès opened its store in Guangzhou after lockdown, it saw US$2.7million in sales.

  • This was the largest single-day shopping a single boutique in China has ever seen.

  • Several malls and restaurants saw queues with some actually seeing a waitlist of three to four hours.

  • The reason behind this “revenge spending” is nothing more than pent up demand from the lockdown and an interesting phenomenon called shibal biyong.

Shibal biyong is a Korean expression popular among millennials. It means impulse purchases such as a US$20 coffee or an expensive dress after a particularly difficult day at work or at home. These purchases are non-essential but make people feel better about a bad experience in their lives.

Much YOLO behaviour?

  • This desire to buy things and experiences would also be especially enhanced after the pandemic when people realise that their future can be uncertain.

  • It may take some time for people to actually start spending straight after the pandemic depending on the economic condition.

But I believe that when the economy starts recovering there will be a shift in the mindset of people towards living an uninhibited life, similar to the Roaring ’20s where everyone was seen buying new cars, appliances and stylish clothing for the first time in history.

This decade saw a total 300 per cent increase in the number of cars on the roads and the first million-dollar advertising campaign.

China's vehicle market shows robust April growth

This closely corresponds to what we are seeing in China presently with the growth in car sales.

  • Auto Sales rebound after 21 months

  • Bur on a more macro level, Chinese domestic macro-economy recovery still needs time, and a shutdown of overseas factories might well affect domestic auto parts supply.​​​

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Heng Kai Le
Heng Kai Le

4w ago

Dude, this is like a Seedly article on its own! As a person who loves languages, I gravitated most towards shibal biyong. It's a bit sad that the stress accumulated from navigating society makes many South Koreans view spending as a form of respite. I recently watched a CNA documentary that reveals how South Koreans have huge household debts because of their propensity to just take on credit card debt.
Kenneth Lou
Kenneth Lou

4w ago

Yeah haha saw that CNA video as well! Lol yeah indeed i dont know if its our other asian side (the less thrifty asian mindset)
Heng Kai Le
Heng Kai Le, Mondomover at School Of Life
Level 6. Master
Answered 4w ago

I think on the whole, nope. What with job losses and underworking amidst this economic downturn, many cautious Singaporeans will adopt a wait-and-see-first attitude before indulging themselves in retail therapy.

I do think that certain sectors will remain more recession-proof than others. Take the tuition industry for instance. Singaporeans have always remained invested in their children's education; 1 month of HBL and another month of holidays will make some reach into their pockets and augment their childen's learning with online classes.

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Summer
Summer
Level 5. Genius
Answered 2w ago

By surge, I am assuming it means a sudden huge increase in volume and sales.

I don't think so until there appears to be major breakthroughs in the coronavirus situation that is a clear indication that we are moving out of this mess. The lower numbers these days may be upended once the lockdown eases, as people start to move out of their homes. Hence, the effect of the ease is still uncertain.

However, if there appears to be major improvements in the daily cases despite easing of measures plus progress in vaccine creation, then consumers' sentiments will largely improve too!

I think there still may be a surge, though it'll be a short one, following the easing of lockdown measures. However, recovery to pre-virus conditions will take up to 1-2 years IMO.

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HC Tang
HC Tang, Financial Enthusiast, Budgeting at The Society
Level 9. God of Wisdom
Answered 4w ago

Revenge spending yes because being lockdown unable to travel , dine in restaurants and drink bbt.

However , that will be just short term. If economy continues to go bad, unemployment rate continue to rise , no income how to spend ? Only possible for the short term basis.

The ultimate supply and demand theory will always come back in and reflect true economy state.

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Wilson Nid A Break
Wilson Nid A Break
Level 8. Wizard
Answered 4w ago

That surge in spending might be brief, if we get a second surge in covid-cases lol

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Tay WenHao
Tay WenHao
Top Contributor

Top Contributor (May)

Level 7. Grand Master
Answered 4w ago

Depends on sector ba. As you can see from Macdonald's opening, the surge is crazy. I think for Singaporeans, anything related to food and beverages (and alcohol) will definitely surge.

I believe the next craze is bubble tea. Then clubs and bars.

As for clothings and appliances I think not so much.

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