Chindia Alert: You’ll be Living in their World Very Soon
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The coronavirus pandemic has completely changed patterns of consumer psychology across the world, experts say
Complexity of the crisis, the number of variables and its magnitude make a consumer recovery unprecedented and difficult to predict
The coronavirus has caused panic buying around the world as consumers frantically stockpile of goods such as toilet paper, hand sanitisers and masks. Illustration: Brian Wang
Before the coronavirus crisis began rippling through the global economy, Susan Wang had big plans for 2020.
Not only was she going to buy a new Apple MacBook and iPad, plus a projector so she could host friends for movies at home, but she was set on making a career move.
“I was planning to change my job, but my headhunter told me that all recruitment has been postponed to the second quarter,” said the 27-year-old who works for a British company in Hong Kong.
“Our headquarters in London has a plan for redundancy, too. It is better to save some money in case I get laid off.”
As Covid-19 spreads across the world, sending stock markets reeling and prompting big companies to slash jobs, Wang has become increasingly frugal like scores of other consumers from China to the United States.
She has stopped eating at restaurants and now tries to keep her weekly food bill under HK$500 (US$64), whereas in the past she wouldn’t think twice about spending HK$100 per meal.
Amid mounting uncertainty, the coronavirus pandemic – which has claimed the lives of more than 41,000 people and infected at least 842,000 worldwide – is fundamentally changing consumer behaviour in Asia, Europe and North America.
Consumer experts said the 2009 global financial crisis, the Great Depression that started in 1929 and the September 11 terrorist attacks give some clues about how and when global consumption might recover. But the complexity of this crisis, the number of variables and its magnitude make this consumer recovery unprecedented and difficult to predict, they added.
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“The coronavirus pandemic has completely changed patterns of consumer behaviour all over the world. People are afraid, and when people are afraid, they go into survival mode,” said Jesse Garcia, a Los Angeles-based consumer psychologist, who is also the CEO of market consulting firm My Marketing Auditors.
plummeted a record 44 per cent in February and those figures are only expected to get worse, with sales forecast to slump between 30 and 40 per cent in the first half of the year, according to the Hong Kong Retail Management Association.
In the US, retail sales dropped by 0.5 per cent in February, even before many states had issued stay-at-home orders to protect the world’s largest economy. The decline was the biggest fall since December 2018.
Experts say non-essential products and services are set to be worst affected by the coronavirus pandemic, while goods and services that can be consumed at home will see a spike in sales.
The coronavirus pandemic has completely changed patterns of consumer behaviour all over the world. People are afraid, and when people are afraid, they go into survival mode – Jesse Garcia
“Online consumer behaviour is frenetic,” said Ross Steinman, a professor of psychology at Widener University in the US state of Pennsylvania. “Consumers are refreshing and refreshing and refreshing websites to secure grocery delivery times, purchase paper towels from their usual big box retailer and scavenge for rice and canned soup from third party sellers on Amazon.
“A pronounced spike in coronavirus cases will only amplify the freneticism.”
So far, one of the biggest shortages for consumers is toilet paper. Television stations across the globe have beamed images of empty supermarket shelves and huge queues as people hoard toilet paper rolls, masks and hand sanitiser.
The frantic stockpiling can be explained by a psychological concept called informational conformity, said Vicki Yeung, associate professor at the Department of Applied Psychology at Lingnan University in Hong Kong.
A pronounced spike in coronavirus cases will only amplify the freneticism – Ross Steinman
“When people lack knowledge and are in an uncertain situation, they tend to follow the group’s behaviour and blindly conform, but once they obtain more information, and digest and process the situation, the panic gradually fades away,” she said.
“During this Covid-19 pandemic, people generally feel jittery and anxious because they feel their sense of control has disappeared.”
Unlike other recent global crises such as the September 11 attacks, the coronavirus is less a one-time sharp shock to the system and more of a rolling source of anxiety that could retreat and resurface repeatedly, consumer behaviour experts said.
This was the pattern with the Black Death plague that hit Europe in 1347 and returned episodically over many years, ultimately killing millions of people.
During this Covid-19 pandemic, people generally feel jittery and anxious because they feel their sense of control has disappeared – Vicki Yeung
“It may be we’ll have to shut down things again in October or August. And this could go on for years,” said Charley Ballard, an economist with Michigan State University in the US. “The more that happens, the more damage it does to buoyant consumer psychology.”
Furthermore, relative to the 2009 financial crisis and even the Great Depression, when much of the damage was concentrated at least initially in the financial sector, this crisis has seen virtually the entire economy grind to a halt all at the same time, devastating employment and consumption.
Last week, a record 3.3 million Americans applied for unemployment benefits within one week, as restaurants, hotels, barber shops, gyms and retail outlets shut down in a nationwide bid to stem the pandemic. The previous record of 695,000 was set in 1982.
On Tuesday, Goldman Sachs predicted the US jobless rate will hit 15 per cent in the second quarter of this year from the coronavirus economic freeze, and could rise further beyond that to near the historic peak of 24.9 per cent seen in 1933 during the Great Depression. Economists at the St. Louis district of the US Federal Reserve projected unemployment could cost as many as 47 million jobs in the US this year, sending the unemployment rate past 32 per cent before making a sharp recovery.
US now has world’s most coronavirus cases, surpassing China
China’s unemployment rate jumped to 6.2 per cent for January and February from 5.2 per cent in December and 5.3 per cent a year earlier. It was the highest level since records began in 2016, but did not include China’s estimated 291 million migrant workers.
Consumer spending accounts for more than 60 per cent of the Chinese economy and drives 70 per cent of the US economy. But with the pandemic causing many people to go into hibernation and likely to lead to cycles of job cuts, economists have predicted a consumer-led global recession by the second quarter of this year.
Just how long it will take for consumer behaviour to return to normal depends on each person’s psychological resilience, including how quickly they can adapt to change, how optimistic they are and whether they can adopt strategies to regain a sense of control, Yeung said.
Anirban Mukhopadhyay, chair professor of marketing at Hong Kong University of Science and Technology said as long as the coronavirus threat was still present, people would remain fearful to some extent. But he added that people were resilient.
Satellite images show world sites deserted amid coronavirus pandemic
“Human beings adapt to events and stimuli over time,” Mukhopadhyay said. “Research has shown that even people who win lotteries tend to return to their earlier levels of life satisfaction after some months, as do people who have to have amputations.
“So even if the source of the fear does not go away, we learn to live with it.”
Ballard, from Michigan State University, estimated it could take upwards of two years for American consumers to feel secure enough in their jobs and gain enough confidence to fully open their wallets. A longer and more episodic duration for the disease could push that higher, he added.
Further complicating the consumer picture, he said, is that many supply chains are at risk of breaking. And consumers will be wary of spending for a while in many traditional areas, including crowded sporting events and concerts, restaurants and flights.
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Some experts have even suggested that consumer behaviour may be permanently changed as a result of the pandemic.
“It seems very unlikely that people will get back to life as it was before, once the coronavirus is over,” said Andreas Kappes, a lecturer in psychology at City University of London.
“People’s behaviour is extremely orthodox, often referred to as the status quo bias and captured in expressions like ‘past behaviour best predicts future behaviour.’ Now, the crisis forces us to change our behaviour, radically, and we might discover that new way suits us better.”
Image copyrightGETTY IMAGESImage captionCardinal Oswald Gracias told the BBC it pained him to hear accusations that he had neglected victims of alleged abuse
One of the Catholic Church’s most senior cardinals has admitted that he could have better handled sexual abuse allegations that were brought to him.
Oswald Gracias, the Archbishop of Mumbai is one of four men organising a major Vatican conference on child abuse this week.
We found two separate cases where the cardinal, who is tipped by some to possibly become the next Pope, is claimed to have failed to respond quickly or offer support to the victims.
Victims and those who supported them allege that Cardinal Gracias did not take allegations of abuse seriously when they were reported to him.
India’s Catholics say there is a culture of fear and silence in the Catholic Church about sexual abuse by priests. Those who have dared to speak out say it has been an ordeal.
A woman’s life changed when her son returned from Mass at the church and told her that the parish priest had raped him.
“I could not understand what should I do?” she said. She did not know this yet, but this event would put her on a collision course with the Catholic Church in India.
Media captionWhy is India’s Catholic church silent about sexual abuse?
The man she reached out to for help was and remains one of the most senior representatives of the Church.
It was nearly 72 hours after the alleged rape that the family briefly met Cardinal Gracias, then president of the Catholic Bishop’s Conference of India and Federation of Asian Bishops’ Conferences.
The issue of sexual abuse within the Church is being called the Vatican’s biggest crisis in modern times, and the integrity of the Catholic Church is said to ride on the outcome of this conference.
Image copyrightGETTY IMAGESImage captionPope Francis with Cardinal Oswald Gracias (fourth from left)
Over the past year, the Catholic Church has been reeling under multiple allegations of sexual abuse around the world.
But while abuse claims have made headlines in North and South America, Europe and Australia, very little is known about the problems in Asian countries. In countries such as India there is a social stigma about reporting abuse.
Among Christians, who are a minority of nearly 28 million people, a culture of fear and silence makes it impossible to gauge the true scale of the problem.
Cardinal Blase Cupich of Chicago – a colleague of Cardinal Gracias on the four-member organising committee – has promised that decisive action in Rome and in dioceses worldwide will follow after the meeting so as to safeguard children and bring justice to the victims.
Cardinal Gracias will open the second day of the summit with a conversation about accountability in the Church.
Media captionBrigitte, a survivor of child sex abuse by a chaplain, explains why she is ready to speak now
This vital role given to him during this crucial conference has made some in India unhappy.
They say his track record in protecting children and women from abusers is questionable. Those we have spoken to who have taken cases to him say they received little support from him.
The mother of the abused boy said: “I told the cardinal about what the priest had done to my child, that my child was in a lot of pain. So he prayed for us and told us he had to go to Rome…my heart was hurt in that moment.
“As a mother, I had gone to him with great expectations that he would think about my son, give me justice, but he said he had no time, he only cared about going to Rome.”
The family say they requested medical help but were offered none.
The cardinal told us it pained him to hear this, and that he was not aware that the boy needed medical help – and if he had been asked, he would have immediately offered it.
The cardinal admits he left for Rome that night without alerting the authorities.
By failing to call the police, Cardinal Gracias may have violated India’s Protection of Children from Sexual Offences Act, 2012 (POCSO).
The provisions of this law state that if the head of any company or institution fails to report the commission of an offence in respect of a subordinate under his control, they shall be punished with imprisonment for a term which may extend to one year, and with a fine.
The cardinal told us he had telephoned his bishop the next day, who told him the family had subsequently informed the police themselves.
Asked if he regretted not calling the police personally at the time, he said: “You know I’m being honest, I’m not 100% sure… but I must reflect on that. I admit whether immediately, the police should have got involved, sure.”
He says he was under a duty to evaluate the credibility of accusations by speaking to the accused man.
Emerging from that meeting, the family decided to go to a doctor.
“He took one look at my boy and said that something has happened to him. This is a police case. Either you report it or I will… so we went to the police that night,” the mother said.
A police medical examination found that the child had been sexually assaulted.
Image copyrightGETTY IMAGESImage captionIndia is home to about 19 million Catholics
A current priest who spoke to us on the condition of anonymity said this was not the first time allegations about this priest had been brought to the cardinal’s attention.
“I met him some years before this [alleged] incident,” the priest told us.
“There were strong rumours about [the accused priest] in the diocese, and like these are about abuse that is taking place. And yet he seems to be moving from one place to another, one parish to another. The cardinal told me directly that he is not aware directly of all these things.”
The cardinal says he cannot recall the conversation. He says he did not recollect any “cloud of suspicion” over the man.
‘A lonely battle’
As part of our investigation, we wanted to see if there were other allegations of the cardinal being slow to act.
We found an instance dating back almost a decade, brought to his attention just a couple of years after becoming archbishop of Mumbai.
Image captionCatholic activist Virginia Saldanha says three legal notices were sent to the cardinal, threatening court action unless took action about the claims of abuse
In March 2009, a woman approached him with accusations of sexual abuse by another priest who conducted retreats.
She says that he took no action against the priest so she reached out to a group of female Catholic activists, who say they forced the cardinal to act.
Under pressure, he finally set up an enquiry committee in December 2011. Six months after the enquiry, there was still no action and the accused priest continued working in his parish.
“We had to send the cardinal three legal notices to act, threaten to take the matter to the courts if he did not act,” said Virginia Saldanha, a devout Catholic who has worked on the women’s desk of multiple Church-affiliated positions for over two decades.
When the cardinal replied, he said: “The priest is not listening to me.”
Image captionThe family says they have been ostracised from the church and isolated within their communities since reporting the sexual assault
During the time, Saldanha said she had to leave the church because “I could not bear to see that man giving Mass in the church. I did not feel like going there.”
The priest was eventually removed from his parish, but the reasons for his departure were never made public.
The punishment, decided by the cardinal personally in October 2011, was a “guided retreat and therapeutic counselling”.
When we pressed him about the speed of process and punishment, the cardinal said it was a “complicated case”.
After a stay in the seminary, the accused priest was briefly given a parish again and still conducts retreats.
Meanwhile, the family of the allegedly raped minor feel abandoned by the institution that they had built their lives around.
“It has been a lonely battle,” the mother concedes. They say they have been ostracised from the church and isolated within their communities.
“After complaining to the police, when we would go into church, people would refuse to talk to us, to sit next to us during Mass. If I went to sit next to someone… they would get up and leave,” she said.
The hostility she encountered eventually “made us leave the church. But it got so difficult for us that we eventually had to change our home as well. We left it all behind”.
Church members say that it is this hostility that makes it harder for victims and their families to speak up.
Caught between an apparently unsupportive clergy and hostile social network, many find their voices faltering.
CHINDIA ALERT: You'll be living in their world, very soon 