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Covid-19 victory: meaning for mobile markets

Covid-19 pandemic china

Covid or not Covid? That is the question. The strongest Covid outbreak in the past two years occurred in China in March 2022 and is still ongoing. It has already negatively affected Asian stock exchanges as well as increased the incidence in Europe. So logical questions arise: did the pandemic leave the global agenda too early, and how will the forward euphoria from restrictions removal affect the mobile electronics market? 

In May 2022, most of the countries made significant progress in anti-pandemic fight. Incidence statistics are rapidly improving, while countries are massively canceling mask regimes and self-isolation measures. Vaccination and PCR tests are no longer required for work and travel. This sounds amazing in terms of economic recovery and business processes, however, many experts believe that Covid was removed from the current agenda too early.

New Covid outbreak in China

Concerns arise by the current situation in China, in particular in one of the largest metropolitan areas of Shanghai, where, on April 28, a lockdown was introduced. Thousands of new infections are forcing the Chinese government to adopt a zero-tolerance policy for the virus. This situation leads to economic losses both in the regional market and in the international arena. 

According to experts, Shanghai to end Covid lockdown and return to normal life in June amid economic slowdown. The restrictions that sent shockwaves through Chinese economy and global supply chains are to ease in most regions. China is the second economic power in the world, so this dynamic cannot go unnoticed.

china pandemic

Chinese mobile market

Despite the lifting of restrictions, businesses will continue to experience lockdown effects for a long time to come. Analysts at CNBC believe the Chinese smartphone market could shrink by around 3-4% in the second quarter as a surge in Covid-19 cases could worsen consumer sentiment. Since the pandemic situation does not improve, the market may fall to 12% year-on-year. 

However, there are more optimistic forecasts. The market is to start a gradual recovery in June if Covid cases subside. The largest mid-year shopping festival “618”, helding in China, June 18, can greatly contribute to this process.

618 shopping fest china

Global markets

According to Caixin China, the manufacturing activity index fell to 48.1 in March, which is the lowest value since the crisis in March 2020. The current lockdown does nothing but worsen business activity, negatively affecting the entire global economy and the mobile electronics market in particular. Smartphone shipments from China could fall about 3.4% year-on-year in the second quarter, predicts Will Wong, IDC research manager.

The self-isolation measures cancellation leads to the widespread recovery of offline events as well as the opening of mobile retail stores. Now is that very time for everyone who thought about starting their own offline business. 

The return to normal offline mode will affect the general consumer sentiment, however, purchasing power will not recover quickly, but gradually as the economy grows. 

Pre-owned device market 

As for the second hand market, everything is stable, give or take. Pre-owned device values ​​have been pretty much the same amidst the whole pandemic. This dynamic continues to this day. The fallout from the COVID-19 outbreak could boost the cheaper refurbished smartphone segment as consumers cut back on discretionary spending.

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