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Brief Published: 28 Feb 2020

Coronavirus Causes Online Shopping Increase

Brands are turning to online shopping

While retail footfall has plummeted in China – with some stores such as the Saint Laurent store in Shanghai reporting less than 10 visitors a day – e-commerce companies are keeping their heads afloat, and many bricks-and-mortar stores are being forced to reconsider the way they operate.

The coronavirus outbreak has thwarted the usual prosperity of bricks-and-mortar retail around Lunar New Year (LNY) and Valentine's Day. Adidas' Greater China team has reported an 85% slump in sales since LNY (January 25), and China Chain Store & Franchise Association has released a survey revealing that around 70% of fashion stores have simply stayed shut.

The ghost-town effect of the outbreak has had the opposite effect on e-commerce however, and highlights opportunities for online brands to demonstrate their value. Chinese multi-brand retailer Secoo has discovered a fresh market from the crisis – listing products from brands now stuck at offline stores, increasing its own online sales and delivery time.

Jean-Paul Agon, chief executive of beauty giant L'Oreal, has reported that its Tmall sales have increased since last year – New Zealand-American footwear company Allbirds has reported a similar success on the platform, citing that it has been enough to achieve its full-year forecast in China.

Brands must be ready for disruptive events, such as the coronavirus, and also address any over-reliance on offline stores. Companies which were not digitally ready have struggled with the outbreak, compared to e-commerce-savvy brands which are weathering the crisis – and have even been a lifeline for other companies, by listing their hard-to-reach stock online.