Local residents line up for a membership sign-up at the first physical store of Costco in the Chinese mainland in Shanghai, on August 24. Photo: IC

Chinese retailers have seen differing fortunes amid the impact of the COVID-19 epidemic, and the more adept ones have prevailed, a report by global analytics firm Nielsen found.

The COVID-19 outbreak badly affected the Chinese retail industry during January and February, and 42 percent of over 10,000 surveyed retail companies and grocery stores said that their sales have declined, compared with another 44 percent that actually reported growing sales, according to the report.

A total of 29 percent of the surveyed firms reported significant declines, while 28 percent said their sales increased significantly. 

Large businesses such as hypermarkets outperformed small businesses such as convenience stores, thanks to their stronger supply chains. 

Specialized stores selling personal care and cosmetic products, maternal and infant items have been hit particularly hard.

"Some retailers were able to respond actively to the epidemic, with measures to help turn the crisis into an opportunity," Justin Sargent, president of Nielsen China, told the Global Times on Thursday.

Some companies were quick to adapt. Chinese food producer Jinzi Ham said on Wednesday that its first quarter net profit is expected to be 45 million yuan ($6.49 million) to 55 million yuan, up 41.16 percent to 72.53 percent year-on-year, with online sales increasing significantly. Jinzi Ham's shares soared by 9.96 percent on Thursday.

Foreign retailers are also adjusting to the impact of the coronavirus outbreak. Starbucks rolled out express delivery services for its coffee and snacks while keeping a dine-in experience on a small scale.

Swedish furniture giant IKEA, which is widely popular among the Chinese middle class but has had to close up its box-shaped virtual stores during the coronavirus outbreak, is preparing to further its online footprint in the Chinese market, the Global Times learnt.

Companies are anticipating benefitting from a shopping binge when the COVID-19 outbreak is over, based on past experience during the SARS period. Eight percent of companies said the business situation would be very good while 46 percent were broadly optimistic about the prospects for the second half of the year, according to Nielsen. 

A survey sent to the Global Times by Beijing-based fintech company rong360.com revealed that 82 percent of consumers have reduced their consumption to below normal levels due to the COVID-19 outbreak and nearly 69 percent say they plan to increase their spending when the outbreak is over.

A total of 67 percent of retailers said they would make efforts to expand online channels and accelerate home-based business/retail warehouse layouts, the Nielsen report said.

Retailers see insufficient inventory, difficulty in logistics and distribution, and inadequate staff to deliver orders as the top challenges.

Global Times