COVID-19 // China POV Vol.5

1
Havas Group China
April 28th 2020
COVID-19
EDITION
#5

2
In this edition
1. COVID-19 situation update
2. Immediate consumption impact
3. Media consumption impact
4. Economic outlook
5. Outlook for key categories
6. Media market implications
7. POV & recommendation

3
COVID-19 situation update
More daily life positive
picture, this one would
have been for the peak not
for now

4Sources: CHINA COMMERCE ASSOCIATION FOR GENERAL MERCHANDISE , Tencent news, McKinsey
Everyday step by step
Chinese are discovering and shaping the new normality,
different than expected
900MChinese are planning for
May 1 holiday traveling
Apr 22nd , 2020
50%+traffic in 77% of
the recovered stores
Week of Apr 6th, 2020
Top 1concern of Chinese is:
not knowing how long it will last
Mar 30th, 2020
43%are optimistic in
China’s economic fast recovery
Mar 30th, 2020

Chinese are discovering and shaping the new normality
5
• With continuing imported cases, local infections slightly go up again, but within small scale and certain areas
(Beijing, Heilongjiang, Guangzhou, etc.). Until Apr 26st , the national existing infected cases dropped to 801
from the peak ~60,000 in Mid-February, 15 provinces have reported 0 cases.
• Chinese are getting used to a new normality. Less worrying about the virus, start to enjoy daily life again but in
the meantime doing everything they can for protection. Wearing masks, washing hands, and keeping social
distance have become the daily must.
• Until mid Apr, China was to 90%-95% back to work - supermarket 96%, farmer’s market 97%, shopping malls
90%. 77% of stores recovered 50%+ traffic in the week of Apr 6, 16% increase vs. a week ago.
• Popular restaurants are again lining up, even bars/clubs are packed with people on weekend night, most are
still requiring “green health codes” and temperature checks.
• 65.8% of tourist sites have reopened until QingMing Festival, a 21.5% increase versus the week before. Tourist
sites and parks imposed daily traffic limitation and required reservations. Usually tickets of popular parks
would be sold out before early afternoon on weekends. May 1 holiday is expected to see domestic 900M
travelers, twice as Qingming holiday. Indoor tourist attractions and cinemas remain closed.
sources：Dingxiangyisheng, Nielson

Chinese are discovering and shaping the new normality
6
• In the heavy industry, pick-ups in the steel market, construction activity and crude processing have been
noted. Coal power plants and oil refiners are operating at near 2019 levels.
• China’s drivers have returned to the roads in greater numbers than this time last year as social distancing
encourages more people to use their own cars instead of public transportation. Drivers are still avoiding
non-essential trips. Car sharing services still have precaution measures in place.
• 17 provinces have announced the school reopening times. While due to the unclearness of COVID-19,
some colleges extended reopen time again. Some schools are having reopen drills to ensure the safety.
Sources: China skinny

After the daily enjoyment consumption rise, higher price purchases
see light steps of recovery, many categories are further recovering
8
Phase Cancel or reduce Unchanged or limited Increase
Phase 2
Stabilization
Feb 9 -End of the outbreak
(probably in mid of the year)
Phase 3
Post outbreak - Recovery
• Big purchases see first step of recovery: real
estates, cars, luxury products rejuvenated
in Mar-Apr compared to Feb.
• Domestic travel is recovering, but it is
mainly the short distance travel or local
visits
• International travel keep postponed
• Dining out is reenergizing after the hard hit
• Big family purchase categories without
urgency: cars, furniture etc.
• Online entertainment
• Financial investment
• Epidemic related products:
masks, household cleaning,
medicine grow stable
• Food market overall shift to more
fresh food especially for vegie
and protein, less dining out
• Online shopping through live
streaming keep booming
• Personal care products
• Major appliances,
consumer electronics,
liquor, etc.
• Luxury: overseas buying
high decrease,
domestically to
compensate
• Apparel
• Entertainment, especially OOH
activities like cinema, outdoor.
• Travel
• Health related categories,
including healthy food, gym
• Kitchen appliances
• Pet category
• Community shopping
• Outdoor gear
Sources: desk research and social listening

9
Key developments during
the end of stabilization phase

Consumption of daily food enjoyment, shopping and day trips have
surged in recent weeks as policy-driven stimulus kicked in
10
Over 17 provinces and cities governments have given out
coupons which worth 5 billion yuan, some cities have
driven consumption to 10+ times value of coupons issued
Hangzhou
303 million coupons
redeemed, generated
3.25 billion sales until
2020/4/14
Zhengzhou
14.27 million coupons
redeemed, generated
187 million sales until
2020/4/18
Restaurants
Tourist
attractions
Shopping malls
A glance of
China
Sources: Xinjingbao

People are more willing to do outdoor activities,
but mainly focused on local visits, even during QingMing Festival
11
Sources: meituan
65.8% of tourist sites have reopened until
QingMing Festival, 21.5% increase than a week ago
432.5Mpeople went traveling during
Qingming holiday
47.2%
19.2%
12.1%
9.5%
12.0%
Natural site
Zoo
Park
Theme park
Others
QingMing festival travel place contribution
*Picture - Shanghai Gucun park on Apr 12
Local visitors contribution significantly
increase vs. last year same period
2020 QingMing Festival
Local visitor : nonlocal visitor = 65:35
2019 QingMing Festival
Local visitor : nonlocal visitor = 45:55

China’s retail sales are recovering, though fashion-related sectors
take longer time to recover
• In March China’s retail sales of consumer goods recorded 26,450 billion
yuan (YOY-15.8%), though up from YOY 20.5% decrease in the first two
months this year, according to a release by the NBS.
• Meanwhile, fashion-related sectors from department stores to apparel e-
commerce were still behind the curve.
• In Q1 2020, retail sales in department stores saw a decrease of 34.9%
compared to that of last year, while those of specialty stores dropped by
24.7% and brand boutiques by 28.7%.
• In terms of e-commerce, the sales of the apparel category also dropped
by 15.1% in in Q1, whereas food increased by 32.7% and daily necessities
saw an increase of 10%.
12Source: https://jingdaily.com/chinas-retail-sales-recovering-though-fashion-related-sectors-remain-behind/
Nielsen, 5th Mar, 2020
Based on Nielsen’s research, the COVID-19 impact on retail industry
during 2020 CNY, has shown polarization in performance
Decrease: 42% retail companies state sales have decreased YOY, and
29% terribly dropped down.
Increase: 44% retail companies say their sales have increased, besides,
28% companies have increased obviously

Consumers shop more offline again. Store traffic and sales are
increasing week by week, but slowly
13
17%
19%
24%
23%
6%
6%
2%
2%
17%
8%
17%
31%
15%
8%
1%
3%
recover 30% or below
recover 40%
recover 50%
recover 60%
recover 70%
recover 80%
recover 90%
recover 100%
Week of Apr 13 Week of Apr 6
% of store/mall sales recovery% of store/mall traffic recovery
16%
23%
29%
18%
8%
3%
2%
2%
13%
9%
26%
24%
10%
10%
6%
2%
recover 30% or below
recover 40%
recover 50%
recover 60%
recover 70%
recover 80%
recover 90%
recover 100%
Week of Apr 13 Week of Apr 6
77% of stores
recovered 50%+
traffic, 16% increase
vs. a week ago
75% of stores
recovered 50%+ sales,
12% increase vs. a
week ago
Sources: CHINA COMMERCE ASSOCIATION FOR GENERAL MERCHANDISE

Particularly, outdoor outlets show good traffic, driven by
more young people than families
14
People lined up for shopping
Shanghai outlet on April 12th
Enjoying the good weather while walking around
“The weather is good on weekends,
outdoor outlet is suitable for friends
to hangout, it’s more safe, can enjoy
the good weather, eat ice creams, and
there are lots of sales promotions.”
--- Belle 27 y.o. from Shanghai
Sources: market visit and interview

15
74.85%
20%
5.15%
Yes
Maybe
No
Do you think it is safe to return to a
restaurant/bar now? (Apr 11-12)
75% of people
think it is safe to go to
restaurant/bar now
Sources: Nomfluence
Restaurants are getting back to business but the recovery needs
deals/news to attract more consumers
But 58% of people are still preparing most of
their meals at home, as people are in the habit of
cooking at home and won’t change immediately
Good deals/discounts or providing something new
could be the trigger to attract more consumers

16
Sources: Havas interview and analysis
Overall, we see the China market is recovering but the rebound
happens slowly
1
The uncertainty of
economy restrains them
from spending
2
Not always sure
whether it is safe to go
out or not
3
People focus more on
practical needs than
shopping for pleasure
4
People have built up
habits of EC purchase,
cooking at home, home
entertainment, etc. It
takes time to change

17
Sources: Ipsos; Cosmose; GWI
Innovation and agility help regain growth
55%Keep concerns about the
COVID-19 situation
Mar 20th, 2020

73%
27%
Chinese brand
International brand
Higher speed to market and higher usage of digital opportunities,
mainly demonstrated by Chinese brands
18
Market share & growth rate (Jan-Feb)
GR
-5.8%
GR
-3.8%
Reasons behind
1. Chinese brands are more agile for product supply
during COVID-19, quickly recovered production and
distribution, especially for the necessities
2. China government is launching policies to facilitate
Chinese brands (i.e. Guangzhou plan to incubate
1000 local star brands, 10 live streaming
organization, etc.)
3. The booming EC and Live streaming make more local
brands get close to consumers
4. People preference – according to GFK study, 65%
Chinese prefer Chinese brands and will continue to
buy products manufactured locally, especially for
young people who are the main consumption driver
Sources: Nielson; GFK
Perfect Diary case
Chinese cosmetic brand achieved
￥100M monthly sales on Tmall
store amid COVID-19, and become
the second favorite brand by post-
00 generation, benefiting from the
continuous social investment
during COVID-19

Businesses in the hardly hit hospitality industry launch new
services
19
Hotel – discount + new business
(i.e. breakfast monthly package)
Restaurant – even fine dining
restaurant starts food delivery
Luxury hotel promotions
Marriott breakfast monthly
package only cost ￥588
Fine dining restaurant Mr & Mrs
Bund starts food delivery
We see some businesses (restaurants, shops, etc.) have closed permanently affected by COVID-19, the surviving ones are
looking for new ways to get through the crisis
Sources: Hotel official website, eleme

Hospitality scene has not fully recovered yet, restaurants feel the
economic impact
Compared with other countries, the restaurants and
dining scenes in China are now picking up again as the
spread of coronavirus is halted.
Hakkasan Shanghai was one of the first to reopen in
early February and had been actively promoting the
restaurant. However, as coronavirus concerns persist,
many shopping malls are shortening their opening
hours to close before 9 pm. As a long-established fine
dining brand in Shanghai, many citizens were shocked
by its abrupt closure.
In a statement, the group claimed “the impact of
COVID-19 on our global operations has forced us to
evaluate the viability of our venues and make a
number of prudent yet difficult business decisions to
reduce our footprint. To preserve the long-term
stability of our business, we plan to permanently close
Hakkasan Shanghai effective Monday 13 April.”
20
https://hakkasan.com/shanghai/
Hakkasan Shanghai permanently closes amid COVID-19

Live streaming for selling products of hardly hit businesses for
the good cause
21
3 Top influencers held Wuhan-themed charity livestreams to help
Wuhan brands sell products, Jiaqi Li sold 160K packages of Wuhan
noodles within 2.5 hours
Viya Jiaqi Li Yonghao Luo
Pinduoduo live streaming to support farmers and
agriculture recovery, sold 3000kg litchi honey through
one live streaming
Affected by COVID-19, business of Wuhan and remote area farmers are suffering dead stocks. By selling via live streaming,
products usually would be sold out within seconds. And watching live-streaming has becomes something unique for people’s
night lives. Therefore, Different live streaming platforms and influencers are holding specific themes to help Wuhan and
farmers get through this difficult time.
Sources: Sina news

22
Some outlooks for
the post-outbreak recovery phase

Most consumers will spend their money more rationally after
COVID-19: looking for good quality & lower prices
23
27%
16%
31%
31%
37%
30%
100%
45%
61%
52%
58%
49%
55%
27%
22%
17%
11%
14%
15%
61 and above
51-60
41-50
31-40
21-30
20 and below
Total
Carpe diem Cut down spending Remain unchanged
What will be your consumption mindset after COVID-19?
1. Overall, consumers will be more restrained on future
consumption given the unclear economy, especially for
41-50yrs consumers who are taking the major family
responsibilities
2. Young people are relatively inclined to a carpe diem life
style, keep enjoying life when they can
3. We see China market is stratified. On one hand, Chinese
consumers are paying more attention to prices, seeking
higher value and better deals. On the other hand, they
are also experiencing consumption upgrading, focusing
more on products’ quality and its RTB, rather than social
needs. It’s about price downgrading, quality upgrading,
consumption desire downgrading, consumption mindset
upgrading
Sources: Tuotaishangyanshe

Higher potential for community businesses
24
Community business is the business circle that takes less than 15 min walk from home, provides convenient groceries, daily use
products and services. It plays an important role during COVID-19 as it’s in close proximity to consumers when they need to buy
daily necessities
35% 45%
2019 2020 Feb
Community shops contribution to total offline retail business
Community businesses have more accurate and loyal traffic,
and one community usually would have similar consumers
regarding their consumption behavior given the similar
education/income, hence easier to build up community
groups, such as children group, mom group, dance group, etc.
Community business proportion
Food & beverage 35%-60%
Living facility(convenient store, etc.) 15%-30%
Children & retail 10%-20%
Increased
importance
during
COVID-19
During COVID-19, Community online group buys provide groceries everyday,
people order in community WeChat group, property management team deliver
the food to home directly. It can be further accelerated after COVID-19
Case
Longhu property cooperated with
pizzahut to provide pizza delivery, the
first day orders surpassed that of the
best selling day of last year
Offline community business – shift to more necessities
Online community business – become more digitalized
Sources: shangyedichanzhi

Booming Pet economy, as source of comfort, driven by EC purchase
25
China's agriculture ministry released a draft classifying pets as non-livestock. During the pandemic, some owners abandoned
their pets - fearing that they'd spread the virus - most of China's pet owners treat their furry friends nicely, as they are the
source of comfort and companionship, with all kinds of products and even entertainment
100
million
families
have pets 41%
Pet owners
took dogs to
beauty salon
Best
selling
category in Tmall
global is cat food
during last year
double 11
50%
Online annual
growth for pet
health
supplements
400%
growth of
premium
imported pet
food
The category is digitally savvy in China
90% of owners bought pet products online
375% growth from live streaming in Feb
¾of the pet owners are <40 yrs
Perfect Diary casted
China’s top beauty
influencer Jiaqi Li’s puppy
-- Never to promote its
collaboration with
Discovery Channel
Swedish fashion
retailer H&M has
launched a line of
dog fashion to tap
into the trend.
Sources: China skinny

The upcoming holidays/shopping festivals in May & June are
expected to witness further rebound in consumption
26
May & June have multiple holidays/shopping
festivals, from where we expect consumer
spending to increase sharply
Domestic travelling restrictions will keep
consumers in their hometowns
• Mother’s day
• Food festival
• 520
• Taobao 6.6 sales day
• Father’s day
• T-mall mid year sale
Sources: BCG

TV ratings and reach declined in March
6.9
9.5
7.27.2
10.2
7.3
6.5
9.2
6.5
3
4
5
6
7
8
9
10
11
12
Jan Feb Mar
Tier1 Tier2 Others
Mar VS Feb
Tier1：-24%
Tier2：-28%
Others：-30%
28Source: Infosys, Target:P18-45, Period:2020/01/01 – 2020/3/31, Timeslot: All Day Tier1 including（BJ、SH、GZ、 SZ）,Tier2 including almost Provincial capital
In March ratings saw a clear downward trend Also TV reach has declined, especially in
Tier1&2 cities.
77.8
83.6
76.7
79.8
86.7
78
84.1
87.7
79.8
50
55
60
65
70
75
80
85
90
Jan Feb Mar
Tier1 Tier2 Others

However ratings keep to be significantly higher than 2019
29
Source: Infosys, Target:P18-45, Period:2021903/01 – 2019/03/31，&2020/03/01-2020/03/31, Timeslot: All Day Market: 57 Markets
• Influenced by COVID-19, TV YOY ratings
increased by 33% in March 2020.
• In March TV attracted high attentions and
has been a very influential media
touchpoint.
Mar
2019 5.3
2020 7.1
5.3
7.1
0
1
2
3
4
5
6
7
8
+33%TVR%

General news and Gaming apps daily active usage are in decline since
the peak in February, but both remain a much higher level than 2019
30
Source: iResearch, period: 2019-2020.04.12
344
372
400 384 380
46.9
51.6
60.5
56.4 54.8
0.0
10.0
20.0
30.0
40.0
50.0
60.0
0
100
200
300
400
500
2019 avg. 2020 Jan 2020 Feb 2020 Mar 2020 Apr(till
12th)
2020 General News Apps User Behavior
Average DAU Scale Average Use Time
Unit:
Mil
Unit:
mins
249
295
309
294 291
70.2 72.5
76.7 76.7 78.9
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
0
50
100
150
200
250
300
350
400
2019 avg. 2020 Jan 2020 Feb 2020 Mar 2020 Apr(till
12th)
2020 Gaming Apps User Behavior
Unit:
Mil
Unit:
mins

Total Social active usage and use time are back to 2019 average. While
WeChat, Weibo and Red win, QQ sees a decline in usage vs. last year
31
896
344
182
16 13
912
325
206
14 14
911
332
222
15 15
912
328
216
14 15
915
324
215
14 15
WeChat QQ Weibo Baidu Tieba LRB
2020 Top 5 Social Apps by DAU Scale
2019 avg. 2020 Jan 2020 Feb 2020 Mar 2020 Apr(till 12th)
Unit:
Mil
1220 1241 1267 1288 1250
92.5
97.4 99.9
90.3 92.4
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
0
200
400
600
800
1000
1200
1400
2019 avg. 2020 Jan 2020 Feb 2020 Mar 2020
Apr(till
12th)
2020 Social Networking Apps User Behavior
Unit:
Mil
Unit:
mins

OTV apps usage continues to decrease in April, but remains at
higher level vs. 2019
32
365
401
464
444
418
112.1 114.0
132.0
123.4
118.1
0.0
20.0
40.0
60.0
80.0
100.0
120.0
0
100
200
300
400
500
2019 avg. 2020 Jan 2020 Feb 2020 Mar 2020
Apr(till
12th)
2020 Online Video Apps User Behavior
Average DAU scale Average use time
Unit:
Mil
Unit:
mins
167
153
78
32
22
176
158
83
38
24
205
183
107
52
26
192
175
101
46
26
179
164
91
41
26
iQIYI Tencent Video Youku Mango TV Bilibili
2020 Top 5 Online Video Apps by DAU
Unit:
Mil

However Short video continues its steady growth on use time,
while DAU scale decreases slightly, as life gets back to normal
33
430
465
499
462 456
39.0
51.5
58.3 59.5 60
0.0
10.0
20.0
30.0
40.0
50.0
60.0
0
100
200
300
400
500
600
700
800
900
2019 avg. 2020 Jan 2020 Feb 2020 Mar 2020
Apr(till
12th)
2020 Short Video Apps User Behavior
Average DAU scale Average use time
Unit:
Mil
Unit:
mins
211
123
52 46
36
254
141
55 50
35
285
153
58 53
36
282
140
57 49
35
280
138
56
47
35
Douyin Kwai Watermelon Video Douyin Volcano
Edition
Haokan Video
2020 Top 5 Short Video Apps by DAU Scale
2019 avg. 2020 Jan 2020 Feb 2020 Mar 2020 Apr(till 12th)Unit:
Mil

Navigation apps usage rebounds and use time increased significantly
as people are getting more and more active
34
127 133
115
129
141
19.5 19.0
12.8
20.1
24.9
0.0
5.0
10.0
15.0
20.0
25.0
0
50
100
150
200
250
300
2019 avg. 2020 Jan 2020 Feb 2020 Mar 2020
Apr(till
12th)
2020 Navigation Apps User Behavior
Unit:
Mil
Unit:
mins
81
44
5
81
43
5
74
35
5
83
40
5
91
44
5
AutoNavi Baidu Map Tencent Map
2020 Top 2 Navigation Apps by DAU Scale
Unit:
Mil

EC apps usage continues to increase, especially Taobao sees a
significant increase since February
35
363
400
376
414 414
17.9
16.7 16.4 16.3 16.9
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
0
50
100
150
200
250
300
350
400
450
500
2019 avg. 2020 Jan 2020 Feb 2020 Mar 2020
Apr(till
12th)
2020 E-commerce Apps User Behavior
Unit:
Mil
Unit:
mins
279
73
37
16 10
275
89
41
18 10
253
83
37
18
9
281
81
37
18 11
306
82
39
18 11
0
50
100
150
200
250
300
Taobao Pinduoduo JD.com Xiaomi Mall Tmall
2020 Top 5 E-commerce Apps
by DAU Scale
Unit:
Mil
Source: iResearch, period: 2019.01.01-2020.03.22

As people are back to work, food delivery apps DAU scale rebounds,
with an increase on time consumption
36
23 23
21 22 23
14.0
12.8
11.5
16.2
18.1
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
0
5
10
15
20
25
30
35
2019 avg. 2020 Jan 2020 Feb 2020 Mar 2020
Apr(till
12th)
2020 Food Delivery & Recipe Apps User
Behavior
Unit:
Mil
Unit:
mins
12.0
2.7
1.7
1.0 0.9
12.6
2.8
1.8
1.0 0.8
11.4
2.5
1.7
1.2 0.9
11.7
2.6
1.9
1.1 0.8
12.5
2.7
2.0
1.1 0.7
Dianping Ele.me Meituan Xiachufang Douguo Food
2020 Top 5 Food Delivery & Recipe Apps
by DAU Scale
2019 avg. 2020 Jan 2020 Feb 2020 Mar 2020 Apr(til 12th)
Unit:
Mil

Online education apps usage drops as some regions re-opened
schools but still remains on a much higher level than last year
37
73 77
91 94
88
27.9 27.3
30.8 31.1
32.8
0.0
5.0
10.0
15.0
20.0
25.0
30.0
0
20
40
60
80
100
120
2019 avg. 2020 Jan 2020 Feb 2020 Mar 2020 Apr
(till 12th)
2020 Education Apps User Behavior
Unit:
Mil
Unit:
mins
14
8
6
3
3
11
9
5
4
3
15
10
6
4 4
17
10
6
5 4
16
11
6
5
4
Zuoyebang Xuexi Qiangguo Youdao Dictionary Kuaiduizuoye Xiaoyuansouti
2020 Top 5 Education Apps
by DAU Scale
2019 avg. 2020 Jan 2020 Feb 2020 Mar 2020 Apri(til 12th)
Unit:
Mil

Zuoyebang is widely adopted by students and their parents
in lower-tier cities
16.7 Mil
Average DAU (2020 Mar)
33.9 mins/day
Avg. use time per user
No.1 in Online edu apps
by DAU scale
7 out of 10 kids
use Zuoyebang in China
Source: iResearch, period: 2020.03; Zueyebang website
38
Zuoyebang Users VS All Internet Users
TIRE 1 TIER 2 TIRE 3 TIER 4
Age distribution

The Chinese economy is slowly recovering from
Covid-19, closing gap with 2019
China Q1 GDP and retail consumption plunged more than expected.
Retail recovery starts in March, but slowly
40
GDP growth rate slumped to -6.8%, the first time
negative growth since 1992 when China started
to record GDP
China Q1 retail market growth slumped to -19%,
while it is slowing down the decline in Mar.
6.8% 6.7% 6.5% 6.4% 6.4% 6.2% 6.0% 6.0%
-6.8%
China GDP Growth Rate Retail Market YOY Growth Rate China Economic Activity Index
9.6%8.9%9.0%8.3%8.4%8.5%7.6%7.8%
-20.5%
-15.8%
2020 Q1 retail
consumption -19%
Sources: National Bureau of Statistics; WIND; EntGroup; FT research

To stimulate retail consumption more than 40 local governments
have issued 5 billions RMB worth of vouchers
41
• Participants: Wenzhou, Zhengzhou, Hangzhou, Wuhan,
Shenzhen, Nanjing, Jining, Ningbo, Shaoxing and more;
• Offline retail business is expected to benefit from local
governments’ distribution of vouchers. Statistics have
shown positive results (on the right);
• Vouchers target certain types of consumptions: food &
beverage, shopping mall, culture and sports, tourism,
electronics and more, depending on local policy;
• Most vouchers are in electronic format and being
distributed via online platforms, including WeChat Pay,
Alipay, Meituan App, and more;
• Citizens either request and receive them directly or register
and participate in online voucher lottery system;
• Starting from April 19th, Wuhan Government started to
distribute 2.3 billions RMB worth of vouchers (￥500
millions RMB by government and 1.8 billions RMB by
participated brands).
City
Distributed
Value (RMB)
Redeemed Value
(RMB)
Generated Value (RMB) Multiple
Zhengzhou 50 million 14.27 million
187 million
(2020/04/18)
13.10x
Hangzhou 1.68 billion 303 million
3.25 billion
(2020/04/14)
10.73x
Some publicly available statistics on voucher program performance
Sources: Xinjing Newspaper, Tencent News, Qianjiang Newspaper, Yingxiang Wang

Remarkably even at the end of March, consumer confidence remains
stable; with moderate worry about unemployment
42
2020 Q1
Vs. 2019
Q1
Vs. 2019
Q4
Consumer
confidence index
101.8 -2.3 -1.3
Employment
confidence index
112.3 -2.1 -2.0 41%
49%
23%
27%
Are you afraid of company adjusting personnel
structure?
Are you afraid your salary will be adjusted?
Phase I 2/14-2/19 Phase II 2/24-3/23
People who are afraid of
company personnel changes
decrease
People who are afraid of
salary changes decrease
18% 22%
2020 Mar 2020 Feb
Unemployed% 5.9% 6.2%
Sources: Sina news

Companies urgently further revolutionize their supply chains,
to prevent business leaving China
43
Retailers are learning from COVID-19 that modern supply chains must
now be optimized and managed remotely. But few businesses — or
even countries — are currently moving in this direction. China, however,
is a proactive digital country that enables businesses to experiment with
digitally-run supply chains, and it’s further revolutionizing in 3 ways:
1. 3-D product design – not only cut weeks off the supply chain digital
product development, but it can also be done remotely; eliminates the
need for fitting models
2. Cloud computing, artificial intelligence, and Big Data - AI’s ability to
derive insights and make recommendations from vast amounts of big
data will have dramatic implications for how supply chains operate in 10
years
3. Virtual reality - China’s VR market is predicted to reach US $7.9
billion by 2021, and the “Don’t Touch” supply chain of the future
requires VR to drive innovation
Sources: Jingdaily

Meanwhile, at Government level “new infrastructure” investment
come in place to stimulate the economy growth as well
44
Sources: Jingdaily
The country will accelerate the construction of new
infrastructure such as 5G networks and data centers. A
total of 25 provincial-level regions have put new
infrastructure projects in their government work reports.
7 areas of “new infrastructure”
• 5G base station development
• New energy car charging station
• Big data center
• Artificial intelligence
• Industrial internet
• ultra-high-voltage power facilities
• Inter-city transport
China is seeking more targeted investments in projects that facilitate innovation and improve backward areas in economic and
social development. The total “new infrastructure” expect to reach RMB 1 trillion in 2020 according to China Sinolink Securities

47
International travel gets more restricted
Source: https://contents.ctrip.com/huodong/prtemplate/index/PrTemplatePb3opG?popup=close&from_native_page=1&s_guid=94708fbe-f1c4-418a-b450-
c517342ea8c5&from=singlemessage, CGTN
Italy, France, Germany, Singapore, New
Zealand and other countries have currently
barred from foreigners due to COVID-19.
European Commission in favor of
prolonging inbound travel restrictions until
Mid-May.
Only in 27 countries, including Japan, South Korea,
Laos, Cambodia, the United Kingdom, Iceland,
Bosnia and Herzegovina, Belarus and Mexico,
foreigners are allowed to enter but must comply
with their entry requirements.

5 0
7 2
9 2
General trend chart of tourism recovery
With the improving situation in China, domestic tourism industry will
gradually recover first, followed by short-haul overseas travel
48
• After the COVID-19, the tourism industry will go through three phases: warming-up phase, recovery and rebound phase.
• Currently, domestic tourism is still in the initial warming-up phase, not yet fully recovered. Nationwide, no full recovery is expected until
early July. The rebound for short-haul overseas travel, could happen during summer and towards the National holidays in October, but
will depend on the situations in China and in those countries overseas.
Source: “Travel watcher”《Y2020 Destination recovery index report 》, South China Morning Post, Analysys, MFW
Note: 50 cents is the key node of
the recovery index for travel
industry. Currently, the recovery
index of 40 destinations in China
has exceeded 50.
End of Mar In early Jul
(Summer holiday)
Warming-up phase Recovery phase Rebound phase
Sep-Oct
(National
holiday)
1 0 0
Tour around
peri-urban areas
Dec
Overall domestic travel
recovery first
Domestic rebound and short overseas
trip rebound(e.g. Destinations in South-
East Asia, Japan, Singapore etc.)
Long overseas
trip recovery

Safety is a top requirement, still limiting domestic travel plans
49
0% 5% 10% 15% 20% 25%
Simplified Visa Requirements
Discounts on Airfare and Hotels
Quality Experiences & Activities
Discount on Attraction Tickets
Travel Agency Product Promotions
Travel Plans Optimized for Annual Leave
Guaranteed Safety of Group Tours and Attactions
What Will Motivate Chinese to Travel in 2020
Source: China Tourism Academy; Ipsos
Zero new confirmed and suspected cases overseas
Government notice/official announcement
Expert advice/recommendation
All enterprises resume normal operations
Info that Internet Users in China will use to
Consider resuming Travel after COVID-19

Tomb-sweeping Day (Qingming) boosted recovery of domestic tourism
50Source: China Tourism Academy, CGTN
No. of travelers during Qingming
43.25 million
• Tourists prefer to travel for 2-3 days and
road trips during Qingming holiday.
• The upcoming “Labor Day” (5-day holiday),
is expected to witness the next travel peak.
The major scenic spots were very popular
Short-distance trips and road trips are the main choices
• As of April 9th , 3500 scenic sites have reopened to the
public and the tickets can be booked online
• Popular scenic spots have recovered completely.
• 20,000 tourists visited Huangshan Mountain per day
during the Qingming festival.
Crowded
attractions

In April Online travel apps active usage remains low, but has
stabilized
51
24
20
17 17 16
9.5
9.0
7.9
7.0 7.1
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
0
5
10
15
20
25
30
2019 avg. 2020 Jan 2020 Feb 2020 Mar 2020
Apr(till
12th)
2020 Online Travel Apps User Behavior
Unit:
Mil
Unit:
mins
8
8
4
1 1
7
5
3
1 1
5
4
3
1 1
5
5
3
1 1
5
4
3
1 1
Ctrip Qunar Fliggy LY.com MaFengWo
2020 Top 5 Online Travel Apps by DAU Scale
Unit:
Mil

Since Qingming holiday OTA platforms have started recouping the
business for domestic tourism
52Source: China Tourism Academy, CGTN, MFW
“Road trips/ drives” keyword heat，in the week before
the Qingming festival
BJ SH GZ
Increased
85.7％ YOY
Increased
51.2％ YOY
Increased
132.8％ YOY
Search for “road trips/drives" in
tier 1 cities on Mafengwo The tourist attractions tickets sales on
Ctrip.com rose by 114% MOM in the
week before the Qingming Festival.
Amid new-found ‘liberty’ and pent-
up demand, travel products(e.g.
Hotel vouchers) are selling well.
Qunar online searches for the
upcoming Labour Day holiday
soared 76% this week
compared to a week ago.
On Fliggy, train tickets and
scenic spots tickets booked for
Qingming holiday increased by
more than 100% over the
previous week.
Ctrip Fliggy
Qyer Qunar

与世界「箱」遇
• Mafengwo launched the
campaign“与世界「箱」遇” in
conjunction with 52 foreign tourism
bureaus (e.g. Visit California).
• It not only allows travelers to feel
more care and warmth from around
the world during the outbreak, but
also allows users to explore their
dream destinations around the world
while remaining in China.
• Campaign period: Mar13 -19th (7days)
• Good performance:
• Impression: 124,989,487
• Click: 1,382,894
• UV: 1.23 mil+
• Engagement: 0.66 mil +
53
OTA platforms also use themed activities
to encourage overseas travels
Campaign
mini site
1. Click on the icon
to select the fridge
magnets
2.Click buttons to
collect fridge magnets
of the places travelled
3.Click to
share
4. Sharing
page
Greetings from overseas tourism
administrations and destination
info are presented in the videos or
pictures
Source: https://m.mafengwo.cn/mbrand/fridgemagnetsv1/index.html?user=undefined&from=singlemessage#/
Case : “Meet the world” by X 52 foreign tourism bureaus

Some scenic sites opted for online promotions via 5G livestreaming,
video platforms and VR during the closure
Live broadcast of Forbidden City tour racks up millions of views
54
• The live broadcast aims to enable audiences to feel the beauty of spring and
architecture in the museum and learn more about traditional Chinese
culture. During Apr 5-6 it ran three two-hour slots on online platforms
including Xinhua net, People's Daily, Douyin and Tencent News.
• It racked up over 9.96 millions of views on Douyin and 34.92 millions of
views on Xinhua.com.
• On April 5, the day of the first live broadcast of Forbidden City, the Baidu
index of "Forbidden City " shot up nearly 10 times.
Wuhan university organized ten-days live broadcast to
help people enjoy beautiful Sakura in spring
Source: ZOL, China.com, The Paper, Xinhua news
Baidu index
• Cherry blossoms fully bloomed in Wuhan University. Since the
campus is not open to the public due to epidemic control
regulations, the University is sharing the amazing views via the
internet 5G livestreaming from 10 am to 4 pm every day until
March 25.
• Garnered over 32.5 millions views.

Zhejiang provincial government provided
strong local tourism support
55
Campaign Summary
Key Takeaways
Result
• With epidemic winding down and the demand for tourism
picking up, the Chinese government and OTA platform Ctrip
are both moving to spur the hospitality industry’s recovery.
• Minyun,a vice mayor of Huzhou and Ctrip Chairman James
Liang held a livestreaming sales event on Apr 2.
• Ctrip promoted discounted tourism products in Huzhou,
Zhejiang Province. And the government joined the broadcast
to promote additional discounts from the city government to
boost consumption.
• The livestream attracted 1.2 million viewers
• Generated transactions valued at 26.9 million yuan
(US$3.84 million) within an hour (The products sold were
room vouchers from well-known local hotels).
• This is a successful test of the government-enterprise
cooperation model. The government and OTA platform
introduced events to boost tourism and consumption.
• Therefore, this campaign achieved a win-win results.
Mayor himself held the livestreaming to promote local travel products/tickets on Ctrip, which
becomes a popular trend to show the strong government support.

FMCG sales decreased by 6.7% in Q1 in China
Total FMCG market began recovering 7 weeks (in the week of 13th March) after new infection cases eased. Younger
consumers and West region consumers were more resilient during this period. Further recovery is anticipated though
the pattern of this recovery varies by sector. The Food category dropped 7.7% year on year, as the confectionery and
beverage sectors suffered substantial losses during CNY and lockdown period. Against the backdrop of a declining
FMCG market, the household products sector has seen a value increase of 7.4%.
57Source: https://www.kantarworldpanel.com/cn-en/news/V-shape-or-U-shape-Path-to-Recovery-for-FMCG-post-COVID-19

Shopping malls and supermarkets:
a) Accelerated the industry layout of supplier and digitalization of storage,
platforms and logistics;
b) Spread business by overall channels development and O2O integration.
Convenience stores:
a) Increase awareness for target audience and complete service of offline store
and delivery home
Grocery stores:
a) Cooperation's with local suppliers and transforming to e-commerce
operation
58
New opportunities arise for supermarket
retailers driven by COVID-19

Supermarket retailers who offer fast and efficient delivery services
were able to grow client bases despite the loss of physical traffic
Challenged by the unprecedented loss of physical shopper traffic, modern trade retailers strived to utilize delivery
services to supply fresh foods and groceries. Those retailers who were able to offer fast and efficient delivery services
were even able to grow their shoppers despite the disruption caused by COVID-19.
• Amongst the top players, Sun Art maintained a steady position
thanks to its strong integration with the Taoxianda platform under
Alibaba.
• RT-mart also actively leveraged community group buy apps as well as
its own delivery platform “Youxian’ to maintain its service during Q1.
• Yonghui maintained a staggering growth of 9.8% in the first quarter,
driven by its efficiency in fresh foods supplies and recent expansion
to smaller ‘mini’ formats to build advantage in proximity.
• At the same time, local giants such as Wumart and Bubugao
continue to grow faster than total market, thanks to their well-
managed supply capabilities and membership building as a result of
regional focus.
• Regional retailers are also rapidly adopting livestream-based
platforms to attract shoppers while consumers desire to shop in an
interactive way.
Share of Market 2019Q1 2020Q1 Difference
SUN ART GROUP 8.3 8.3 -
AUCHAN 1.2 1.0
RT-MART 7.2 7.3
VANGUARD GROUP 7.0 6.6
VANGUARD 3.9 3.5
WAL-MART GROUP 5.1 4.8
YONGHUI GROUP 4.2 4.8
SUNING GROUP 3.2 2.7
CARREFOUR 2.8 2.3
BAILIAN GROUP 2.4 2.4 -
WSL GROUP 2.3 1.9
WU-MART GROUP 2.3 2.4
SPAR GROUP 1.5 1.4
BUBUGAO GROUP 1.4 1.6
Source: 2020 CTR Market Research 59

60
Hey Tea introduces crossover coops
for self-help during epidemic period
Hey Tea X Ming
Dynasty· Ying Chou
2020.1
Hey Tea X Warrior
2020.1
Hey Tea X Yili
Yousuanru
2020.2
Hey Tea X Hema
2020.4
Hey Tea X Cornetto
2020.3
Hey Tea X
Corkcicle
2020.3
Campaign Summary
• Hey Tea is China’s bubble tea behemoth. Its brand value
embraces inspiration, coolness, design and zen and their TA
are mainly post-80s,-90s and -00s generations.
• As the epidemic has devastating blow to the restaurant
industry, Hey Tea launched a series of crossover cooperation
to boost sales. In Q1 in total they partnered with 6 brands
from cultural product, apparel, FMCG, EC and commodity
industries.
• In addition Hey Tea launched contactless delivery and
corporate group meals to deal with the low store traffic.
Result
• Hey Tea is recovering and its takeaway orders are back to
normal.
• According to YiMagazine, Hey Tea is about to complete a
new round of financing, the post-investment valuation may
exceed 16 billion yuan.
• The price of each Hey Tea’s product has increased for 2-3
yuan.
Key Takeaways
• Hey Tea takes advantage of Hema’s EC channel, and their
delivery system to make up their limited offline sales.
• By using the “crazy crossover cooperation” strategy, Hey Tea
not only drove its online sales but also brought new
consumers to the brand.

Since Mid-March commercial traffic has been recovering in Tier1 cities,
but strict controls remain in place in Beijing and Guangzhou
84.16%
76.12% 74.51% 74.17% 72.36%
64.17%
52.31%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Hangzhou Shenzhen Chengdu Shanghai Nanjing Guangzhou Beijing
Commercial District Traffic Recovery in Different Cities
Recovery Rate = Traffic of specific Commercial Districts 2020 (3.23-3.29) divided by Traffic of specific Commercial Districts 2020 (1.6-1.12)
Sources: Getui Dashuju (Getui Big Data) 61

Some consumers are back in the mood for luxury, temporarily
more into buying goods over experiences
63
Hermes open a new store in
Guangzhou on Apr 11, achieved
19,000,000 RMB
sales on the opening day
From ownership to experience, and back again
“Experiential luxury”—think high-end hotels, resorts,
cruises, and restaurants—has been one of the most
dynamic and fast-growing components of the luxury
sector. Millennials (born during 1980–95) have spent
over the last few years more and more on
experiences and “Instagrammable moments”
sometimes over possessing luxury good. Baby
boomers (born during 1946–64), are moving in this
direction as well, after luxury products accumulation
over the years.
While the positive momentum of experiential luxury
will persist, it will slow down in the short term as
consumers temporarily revert to buying goods over
experiences.
Sources: Jingdaily, Ladymax
Louis Vuitton China offline
store sales increased
50% in first 3 weeks of
Apr. compared to last year
same period

During the COVID-19 crisis in China luxury brands used four
digital marketing tactics that worked
64
Sales Associate-driven
WeChat pop-ups
Product-driven
livestreaming
Boundary-pushing VR
Calvin Klein virtual exhibition on Tmall.
KOL Yvonne Ching hosts the Burberry
Tmall livestream session.
Interactive Social Ads
LV WeChat pop-up store
#pradaacronyms campaign on Douyin
Source: jingdaily.com

In March car sales increased sharply vs Feb, but far below last year
Unit:000’
• Auto sales in China plunged an annual 43.3% in March, as the world's biggest auto market struggles to get into gear following a
prolonged demand slump that has been exacerbated by the coronavirus outbreak.
• The number of new energy vehicles (NEVs) sold - excluding those from U.S. electric vehicle maker Tesla Inc - fell for the ninth
straight month to 53,000 units, three times that of February.
• CAAM also said a survey of 204 auto manufacturing bases showed a production resumption rate of 99.5% following closures
aimed at stemming the spread of the novel coronavirus. It said 86% of workers have returned to work.
Source: China Association Of Automobile Manufacturers (CAAM), China Passenger Car Association (CPCA) 66
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Y2018 2,809 1,718 2,656 2,319 2,288 2,274 1,889 2,103 2,394 2,380 2,548 2,661
Y2019 2,367 1,482 2,520 1,980 1,913 2,056 1,808 1,958 2,271 2,284 2,457 2,658
Y2020 1,927 310 1,430
-
500
1,000
1,500
2,000
2,500
3,000
Monthly car sales in China

Renault stops making petrol cars in China, shifting sales to only
electric cars
• A slowdown in Chinese automotive sales, which is expected to
worsen this year due to the coronavirus crisis, has heaped pressure
on carmakers that were already struggling to establish a big
presence in China, the world’s biggest vehicle market.
• As a result French automaker Renault SA is ditching its main
passenger car business in China following poor sales at the loss-
making venture with Dongfeng Motor Group.
• Renault, which entered the Dongfeng joint venture in 2013 and
began producing gas-powered cars under the tie-up in Wuhan
three years later, is one of the few global carmakers to exit a major
project in China in recent years.
• Renault said it would focus on its light commercial vehicle business
with Brilliance China Automotive Holdings. That venture plans to
roll out five new models before 2023 and is planning to export cars
to other markets. Another focus is electric vehicles, which will be
built by its venture with Jiangling Motors Corporation Group.
67
Source: https://www.reuters.com/article/us-renault-m-a-dongfeng/renault-quits-its-main-china-venture-after-weak-sales-
idUSKCN21W0HB

SAIC Motor’s Q1 sales tumble 55.7% from the previous year
SAIC Motor saw its first-quarter (Q1) sales slump
55.7% from a year ago to 679,028 units with most of
its subsidiaries hit by the coronavirus-caused
downturn as well.
In March, the Chinese biggest automaker
encountered a 58.6% plunge over the previous year.
The total sales (231,455 units) achieved a
tremendous rebound compared to 47,365 units sold
in February.
SGWM announced a few days ago it has set aside 1
billion RMB to subsidize consumers’ new-car
purchase in response to China’s encouragement to
boost automobile shopping. Under the new project,
dealers of Baojun brand will offer buyers across
China subsidy of up to RMB10,000 per car.
68
Source: Gasgoo news

Leveraging social and KOL to drive awareness for offline store event
and gamification with social mechanism at the event #万象更新
Source: GITI official account
Create topic on TikTok
KOLs to enlarge event awareness
(Hefei, Guangzhou, Beijing, Shenzhen,
Shanghai)
Audiences post
short video @Giti
佳通轮胎
Dec.2019 - Jan.2020
打卡视频中含有大象元素
@GITI佳通轮胎
参与抽奖
Hefei
Guangzhou
Beijing
Prize

EV car brands turn to live stream events to boost sales
• Beyond production issues, EV brands are struggling to sell
their cars. As a result, EV brands have moved the battlefield
from offline stores to the virtual world in a bid to attract
customers’ attention.
• Nio's content is various, essentially moving leisure activities
from the offline to online. Nio has presented dozens of
different reality shows in real time. From makeup tutorials to
simple coffee brewing tips, Nio’s sales staff are constantly
seeking interesting topics for their potential customers.
• Tesla’s official Douyin account consistently posts swanky, yet
less focused, content that ranges from videos of the
Cybertruck and Roadstar 2 to goofy skits. The company’s
default policy is that let its local stores decide what content to
post. Tesla has yet to designate a person to develop a central
content strategy.
• Nevertheless, numerous viewers appear to be less impressed
by some of the livestreams, describing the live shows as
“boring” and lacking informative content. Given that these
livestreams have yet to garner many viewers, it’s unclear how
successful the format may be in converting viewers to buyers.
70
<left> Customers pile into Tesla stores after China-made Model 3 price
reductions, according to a short video posted by a Tesla shop in
Shanghai in January, 2020.
<right> A Nio saleswoman from Xiamen shows how to apply eye
shadow during a live-stream. (Image credit: Jill Shen/Technode)
Source: https://technode.com/2020/04/22/tesla-and-nio-try-ev-livestreams-to-sell-cars-amid-outbreak

COVID-19 is accelerating a transformation in the healthcare market
• The drug sales in hospital and physical drugstores has
decreased
• Innovative drugs, the academic promotion activities of new
drugs are pending and the drive demands is slowing down
• Blocked recruitment of patients in clinical research may affect
the progress of new drug market
• The number of non emergency patients and patients with
optional treatment in medical institutions is greatly reduced
affected by the epidemic situation
• Traffic disruption caused by the epidemic affects the normal
operation of pharmaceutical distribution enterprises
• Increase demands for medications to prevent and treat
COVID-19
• Focus on vaccine development
• Online medical service developed
• The implementation of hierarchical medical service system
is accelerating and primary medical institutions played an
important role in curation and prevention
• Consumer demands for online drug retail channels
are increasing rapidly
• The public demands for commercial health insurance
will increase
Positive Negative
Medication
Drug retail
Short
term
Long
term
• Promoting the construction of Internet hospital and
the reform of existing medical system
Source: Bain & Company report ‘The impact of the epidemic on China’s economy, retail, automobile enterprise and medical industry
72

73
The user number of internet hospitals and online consultation
platforms have substantially increased
900%
800%
135%
215%
Number of
patients who get
Internet therapy
New users
Source: Bain & Company report ‘The impact of the epidemic on China’s economy, retail, automobile enterprise and medical industry
❖ Sequential growth
number
Active users
30%
100% Active users
Ping An Good Doctor Chunyu doctor
DXY
Platform
Number of
patients who get
Internet therapy
Number of patients
who get Internet
therapy

More HCPs want to build their IPs among patients and public
to increase patient attachment
More HCPs want to build their IP among
patients and public to increase patient
compliance and their reputation
Dr. Nanshan Zhong
5h/week
Willing to spend time
to interact with patient
online
Most HCPs are willing
to build reputation
among patients and public
31%
31%
HCPs are trying to become a
famous IPs online
HCPs had tried to become
famous IPs online, but they
didn’t insist.
74
Source: IQVIA report

While at the same time Chinese peoples’ mindset is shifting from
treatment to prevention
Expenses on nutrition and health care
increase dramatically
Drug sales
Healthcare
products sales
700%
500%
VC sales
237%
Patient
“The most effective
drug is human
immunity“
—Huashan hospital-Zhang
Wenhong
Protein powder, vitamins, comprehensive
nutrients and other nutritious products are
promoted on Jindong Homepage
Health supplies become….
Source: https://mp.weixin.qq.com/s/g1GFRsRrWOZpb1FmexQ-fA
75

Overall market ad spend dropped significantly due to COVID-19
Month by month comparison
49,562
40,874
25,479
10,000
20,000
30,000
40,000
50,000
60,000
2018 Feb 2019 Feb 2020 Feb
- 38%
YTD vs YTD comparison
104,309
89,832
67,348
50,000
70,000
90,000
110,000
130,000
150,000
YTD 2018 YTD 2019 YTD 2020
- 25%
Source: ADP (TV, Radio, Newspaper, Magazine, Cinema), CODC (OOH), Iresearch (Digital – PC & Mobile) 2018-2020
Note: excluding media spending on social and search; discounts are estimated based on Havas methodology 77
• In Feb 2020, the total actual* Ad market in China achieved RMB 25 billion; -38% YOY.
• YTD Feb 2020, the total actual* Ad market reached RMB 67 billion, which is -25% YOY
• The main reasons for the decrease are COVID-19 outbreak and the economic environment

The usual CNY related drop in ad spend in February was
accelerated by COVID-19 in 2020
0
10,000
20,000
30,000
40,000
50,000
60,000
1 2 3 4 5 6 7 8 9 10 11 12
2020 2019 2018
Jan-Feb
’20 VS’19=-38%

Market trend depends strongly on the category
-16.7%
-22.3%
-26.5%
-1.4% -3.6%
-6.8%
6.4%
-45.2%
23.2%
-28.9%
25.3%
4.2%
-7.7%
-19.6%
-31.8%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
“Personal Items”, “Consumer Electronics” and “IT Product & Service” ad spend experienced 2-digital growth
rate, while most other categories cut their spending significantly during the peak of the coronavirus outbreak.

The change in demand and supply also led to changes in cost and
inventory for some media types
0% 0% 0% 0% 0%
8%
15%
0% 0% 0%
0%
2%
4%
6%
8%
10%
12%
14%
16%
TV Outdoor Cinema Radio Magazine OTV OTT Social Search Mobile
display
Source: Refer to the net cost of TOP 3-5 Media vendors in each media type 80
• Digital cost increased due to 8% inflation in OTV & 15% inflation in OTT.
• Although TV shows the positive trend in view time, cost keeps the same. Also the price of other traditional
media are basically unchanged.
• Uncertainty for cinema inventory as theatres remain closed
OnlineOffline

Recommendation on
overall marcom strategy
82
1. Focus on products/services out of your portfolio or brand
message that overcome some barriers to enjoy daily life:
• Small scale enjoyment to daily life: indulgence food &
beverage, OOH activities, domestic travel, home
decoration, sports and accessible priced apparel.
• Overcome barriers of concern, like unhealthy
lifestyles and financial insecurity.
• In all cases don’t relate your message to the
epidemic. We see this is not appreciated, consumers
are still a bit depressed and careful. They think
brands should not take advantage of that. So back to
business as usual means back to core meaningful
brand messages as usual.
82

Recommendation on overall marcom strategy:
83
2. Timely and constantly update your roadmap to recoup your business. According to the latest
developments in your category:
• Every week china retail footfall increases, even when it is step by step, while the e-commerce
penetration and transactions keep at all time high level. O2O campaigns are helpful.
• We see consumption to rebound now for those categories that cater enjoying daily life, those
with a supply chain that has not internationally been effected.
• A large group of consumers still has good spending power and saved extra money over the last
2 months, their mindset is more towards spending more everyday.
• At the same time groups of consumers, especially SME related consumers who are hit the
hardest see heavily decreasing spending power.
• The government implements policies to boost domestic consumption show good impulses.

Recommendation on overall marcom strategy
84
3. Be ready for the post-Coronavirus period which is coming close now, preempt with more
tactical campaigns but keep branding investment and messaging going :
• Many brands started and will increase promotions to recoup sales loss and launch
postponed or soft launched products from the last few months.
• Digital amplification through livestream and social commerce keep on showing higher
results than before.
• However keep brand consistency in your tactical campaigns, to maintain additional brand
pull effect for a long post period to come. You can not build your long term recoup on
activations only.
4. There are more opportunities now than before in China to resonate on collective benefits:
• Support local economy, domestic production and communities get more sympathy.
• We see that national pride resonance in your messaging keeps being appreciated,
especially by younger audiences.

Recommendation on media strategy
85
Additional notes:
It is estimated that TV, online video, short video, news app’s usage and stickiness will greatly increase. So far, the Chinese national and top media have opened “Fight Against Coronavirus” column to rolling update
the real-time epidemic status from Jan 20,2020. Which almost fully catch the Chinese audience’s attention.
Phase Digital TV Outdoor
Phase 2
Stabilization
Feb 9 -End of the outbreak
Focus on digital media as it will remain their primary
source of consumption.
OTV, social and news content will occupy most
consumers' time
Daytime ratings have declined and
evening prime-time ratings will hold up
Drop in spending. Focus outdoor
media concentrated commuting
routes, residential Media / lift Media
and in BCDs
Phase 3
Post outbreak - Recovery
On average return to normal while higher usage for
some platforms and formats maintains like short
video, social commerce and life stream
. Higher inflation rates for these platforms
Gradually to the original usage pattern,
while prime time still more important
Return to normal
(except cinema)
1. Tailor your media strategies speedily for the stabilization stage in which we are now, and for the
post outbreak stage soon to come:
2. Keep using new digital formats (like short video, life stream, social commerce) and new platforms that
have risen during the outbreak, they have been proven more meaningful media to consumers now.
3. Lock premium digital (incl. OTT and OTV) and OOH resources for the post outbreak period. Create
some bandwidth and leeway beyond standard formats and requirements to reserve and book
premium resources. As many advertiser are expected to launch campaigns delayed by COVID-19
shortly, premium inventory will be in high demand.

MOBILE
DATA STRATEGY
VIDEO & AUDIO
NATIONAL/LOCAL
PUBLISHING
NATIONAL/LOCAL
OUTDOOR
SPONSORSHIPS
SPORTS
MARKETING
BRANDED
CONTENT
EXPERIENTIAL
MARKETING
SOCIAL MEDIA
CREATIVE
STRATEGY
CRM
SEARCH
INNOVATION
GEO-LOCATION
PERFORMANCE
MEDIA
MUSIC
GAMING
ENTERTAINMENT INTEGRATIONS
Recouping business and
brand growth in China
need a fully integrated
approach with
high speed to market.
Within Havas Village we
can efficiently mobilize the
team you need tomorrow.
86
E-COMMERCE

Including dedicated health specialists from Havas Health & You
30+ MEDICAL EXPERTS
20+ STRATEGY PLANNERS
120+ DEDICATED STAFF
70+ in Shanghai
40+ in Beijing
Digital & Data
Association
programs/
campaigns
Medical PR &
Events
MedicalPatient
education
Creative &
Production
Strategic
Planning
Key clients
Scope
Structure
87

SHANGHAI
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Shanghai 200020
+86 21 3397 8666
GUANGZHOU
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+86 20 3877 3282
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COVID-19 // China POV Vol.5

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