Some shoppers shun foreign goods over virus risk, research claims
The coronavirus crisis has altered consumer behavior, with panic buying, stockpiling and e-commerce becoming the norm this year as people around the world learned to live under lockdown.
While lockdown measures are being eased in many countries, uncertainty around the spread of the virus remains — and it could continue to shape our attitudes toward the goods we buy, analysts have found.
A third of global consumers now worry that products shipped from abroad could pose a safety risk, according to market research firm Kantar.
The company surveyed 45,000 people across 17 countries online and over the phone in late April. The “Covid-19 barometer” study had a margin of error of two per cent.
Goods from China and the U.S. were perceived as particularly risky by consumers in other countries, according to Kantar’s findings, with 47per cent saying they were far less in favor of buying American and Chinese products.
People in South Africa, South Korea, Nigeria and France were most fearful of buying goods imported from China and the U.S., according to Kantar.
“We see concern about a second wave, and in line with that we’ve seen increases in people saying they think companies should bring supply chains into their country,” she told CNBC. “That’s about protecting the supply chain, but it’s also about protecting jobs and their economy. So it seems to be driven by how we can be self-sustaining as individuals, but also as countries and economies.”
Kantar’s poll showed that 65% of people around the world favored buying goods and services from their domestic market, with one in four believing brands should bring production back to their own country.
Chinese consumers were the biggest champions of the “buy local” movement, with 87% of respondents in the country saying they favored locally-produced goods, while 81% of Italians and 76% in South Korea said the same.
Risk versus reward
According to Peter Noel Murray, a New York-based member of the American Psychological Association and the Society for Consumer Psychology, consumer behavior has evolved during the coronavirus crisis as people “recognize a risk in everything now.”
In regular circumstances, Murray said, consumer behavior is driven by the emotional end benefit people associate with buying a product. During the pandemic, however, another dimension to that decision-making process has developed, which involves weighing the reward of making a purchase against the risk associated with it.
“Consumers talk about products that they love, but if they’re put in a position where in order to get that brand they have to expose themselves in a way which they think has some risk associated with it, they’re not going to do it,” he said.
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“It’s really pervasive, this new calculation that seems to be coming up, and I think the same calculation can be made with foreign products.”
He noted that “unfounded” perceptions of risk could even see brand loyalists turn away from certain goods if they had “some kind of nagging feeling that there may be a risk associated with it.”
“It’s going to affect a wide range of people’s behaviors, and that’s going to carry with us for quite some time,” Murray said.
Michael Gasiorek, a professor of economics at Sussex University in England, told CNBC that in times of crisis, people have a tendency to turn inward and become more nationalistic.
“There’s been a lot of talk in the press about how we should be worried that we’re engaged in all these international supply chains,” he said. “It’s entirely possible that people are picking up on this and thinking, ‘oh dear, we should do more ourselves.’”
But he added that whether consumers would actually alter their behavior was another question.
“How many consumers, when they go into the shop and buy tomatoes or blueberries, actually check the origin of those products?” Gasiorek asked. “I wonder, whatever people say they would prefer to do, how much they actually do that in practice.”
Mauro Guillen, professor of management at the University of Pennsylvania’s Wharton School, also expressed skepticism about any intentions consumers had not to buy from certain countries, particularly in the United States.
“What people say in surveys is quite another to what they do when they go to Walmart or shop online,” he said in a phone call.
“It’s often very difficult to know where a product is made. But even if that wasn’t the case, American consumers care about the buck and how much money they spend.”
However, Guillen warned that if consumers, politicians or companies did begin to favor a hyper-local approach, it would stand in the way of an economic recovery.
“That was precisely what made the Great Depression deeper and longer — governments in Europe, in the United States, in Latin America, they turned inward,” he told CNBC.
Is there really a risk?
The U.S. Centers for Disease Control and Prevention says coronaviruses like Covid-19 are thought to mostly spread via respiratory droplets, for example when an infected person coughs or sneezes.
“Although the virus can survive for a short period on some surfaces, it is unlikely to be spread from domestic or international mail, products or packaging,” it says on its website.
The British government also says there is very little risk of contagion from foreign goods.
“The risk of imported food and packaging from affected countries being contaminated with coronavirus is very unlikely,” it said in guidance published at the end of April. “This is because the law requires the exporter to follow the right controls during the packing and shipping process to ensure good hygiene is met.”