While lockdowns have eased, some damage remains. Many people lost their jobs and lost their savings. In addition, the slowdown caused a lot of anxiety on the part of consumers.
People are less willing to spend, until they feel secured about the future. Hopefully this will improve as policies normalize and the economy stabilizes.
Overall, savings in China continue to run at a high level. While working class people’s balance sheets might be impacted by slowdown and COVID, a lot of people still have strong spending power.
Rather than waiting for consumption to pick up, we are looking for structural opportunities within the consumer space. We’re trying to identify opportunities associated with structural changes instead of betting on the entire sector.