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Capillary Technologies Report: How COVID-19 Impacted on Retail Ecosystems of China, Middle East, India and Singapore

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A study undertaken by Capillary Technologies, Asia’s leading SaaS Company, on the impact of COVID-19 in the retail ecosystems of India, Middle East, China, and Singapore. The study offers ringside view of how the epidemic unfolded, its impact on retailers, and measures that can be taken to minimize the negative impacts of the epidemic. The findings of the study are a result of the data analyzed across 10,000 stores in these geos before and during the lockdown.

Key analysis of the study:

  • During the Lockdown (26th January to 5th March 2020)Overall, the epidemic has had a large short-term impact on the Chinese consumer market, and retail sales of goods have fallen sharply.

o   From January to February, the total offline retail sales of consumer goods fell by 20.5% (YOY) while the retail sales of automobile and petroleum goods fell by 37% and 26.2% respectively.

o   Over 65% Drop in Average Sales per Store and a 79% decrease in Customers per Store

  • During the Recovery Period: After just 8 weeks into the initial lockdown, the retail market in China appears to be in the early stages of recovery. The study witnessed an uptick in sales and customers after 6th March 2020. The “Probable Recovery Period” witnessed a 22% increase in sales and 43% increase in customers, which is almost at par with last year’s figures.



Singapore witnessed a perceptible drop in retail sales but not as significant as that of China. A possible reason could be because Singapore managed to contain the infection fairly well and has so far recorded zero Covid-19 related fatalities.

  • Dorscon Orange Alert (From Jan 24th-27th Feb 2020): While Singapore did not experience a lockdown unlike India and China, their consumer retail businesses during alert period the sales slumped by 45% and the number of customers per store was 26% lower compared to the same time period last year.
  • In recovery period (on going): From 28th Feb to 1st March, the study witnessed a sudden surge in sales and customers per store. However, post 1st March 2020, there has been a 34% decline in sales per store compared to the previous year (compared to 45% drop during Orange Alert), and 10% decline in the number of customers per store (compared to 26% drop during Orange Alert).
  • This could be due to the customer reluctance in spending and due to the impact on tourism. However, with the ever-increasing restrictions imposed on the movement of people in malls and restaurants, the recovery trends may be inconsistent and could deviate till the end of April in Singapore.



India seems to have entered Stage 3 of the Covid-19 outbreak. However, the government has stepped up its effort and is leaving no stone unturned in fighting the outbreak.

  • Until 16th March the consumer retail sales and walk-ins did not see much dip compared to last year, this could be due to festive shopping (Ugadi, Gudi Padwa, Navratri etc).
  • However, the India consumer retail witnessed a big drop in sales by 46% and 55% fall in the number of customers per store from 17th to 25th March, which is expected to drop further in the coming weeks due to the ongoing nation-wide lockdown.
  • The retail sales recovery period for India might kick-start from the first week of May, provided that there is no further extension on the lockdown

Key Learning to Chart a Road to Recovery for India Retailers

Based on the analysis it is evident that the short term impact of COVID-19 on retailers will be severe. From the findings, below are a few takeaways on how retailers can tackle this crisis.

  • Being Omnichannel: the most resilient retailers surviving this epidemic are the omnichannel retailers. Brands who invested in enabling a personalized omnichannel shopping experience are experiencing the fruits of their labour. For instance, Chinese apparel brands like Peacebird, Gloria and Youngor who had started their omnichannel digital transformation journeys (through the integration of online and offline channels) experienced a consistent increase in their online sales despite the uncertain in-store sales.
  • Live commerce: China has become the epi-centre for live stream commerce. Chinese e-commerce platforms Taobao and are leading the live commerce world by enabling the live stream viewers to purchase items while they watch.
  • Merging the offline and the online data to upgrade online selling: At a company level, offline teams should coordinate with the online team to divert the traffic to their ecommerce website/app and clear out the inventory.

Speaking on the impact of the pandemic, Aneesh Reddy, CEO of Capillary Technologies says, “This is a very trying period for retailers across the globe. Reports suggest that it will take 5 or 6 months for the world to recover completely from the impact of this pandemic. In the meantime, China has set remarkable precedence in not just battling the spread of the virus but also supporting the economy. In India, we are still in the critical phase of a national lockdown. While the Indian government is doing everything in its power to battle the virus from their end, retailers can also look up to their peers in China and Singapore to save their businesses and chart a quick road to recovery.”

Adds Aneesh, “After this pandemic, we believe that Indian retailers across sizes will understand the power of omnichannel digital transformation. In the long run, consumer brands particularly should increase the percentage of their ecommerce business and deploy O2O strategy of reaching consumers across touchpoints to prevent businesses from closing down.”

Access to the study:

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SMEStreet is fast growing platform dedicated to entrepreneurs from small and medium sized businesses (SMEs). Committed to facilitate Knowledge & Networking for Business Growth, SMEStreet offers value added content which shows the actual voice of Indian MSMEs.

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