Country image and consumer choice: The case of the beer market during the COVID-19 pandemic

Abstract

In this paper, I exploit the exogenous, negative shock to the image of China in the COVID-19 pandemic era and study the impact of country image on consumer choice in the South Korean beer market. First, I find that Tsingtao, a popular Chinese beer brand, lost more than 5 million liters in sales, a 21 percent decrease, during the first 8 months after the COVID-19 outbreak. Second, the impact of the worsened image of China had not weakened even by October 2020, the last month of the sample. Third, the impact not only varied across regions, but also depended on the number of confirmed cases of the disease. These findings reveal that country image has a substantial influence on consumer choice, independently of the quality of the products. They also suggest that firms from an animosity-evoking foreign country may need to take proper countermeasures such as establishing a joint venture with local firms and adopting local brands.