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On the backdrop of COVID-19 breakout, there is some good news coming from China. For the last six days, there were no new internal coronavirus cases in the city of Wuhan, the center of the outbreak. Businesses start to reopen, and people get back to normal. Nevertheless, it’s too soon to say that China stopped the epidemic. However, the news is hopeful.

Moreover, it seems to be that China is in the early stage of the economic rebound. On condition, that country won’t face a new wave of disease, the recovering of the national economy won’t take too long. Numerous Chinese companies have already moved from crisis responses to recovery and post-recovery planning.

Today I would like to share with you how Chinese companies survived the pandemic and what we have to learn from them.

Analyze & Anticipate

Every crisis has a dynamic nature, so you need a constant reframing of your plans and strategies to respond to the changes on time. Otherwise, you will get in the quicksand that would swallow you and your business up in the blink of an eye.

The fastest-recovering Chinese companies are those who have anticipated the shifts in the national economy. Master Kong, the largest instant noodle producer in China, recovered its supply chain by 50 % only after a few weeks after the COVID-19 outbreak. As a result, Master Kong was able to supply 60% of its stores during this time.

What did they do to achieve these results? First of all, the company was monitoring the coronavirus dynamic daily during the first days of the outbreak.  The brand was expecting stock-outs and logistic issues, so it made a shift from large offline retail channels to eCommerce and small stores. Moreover, Master Kong was constantly tracking reopening plans of the outlets to make its supply chain even more flexible.


Seek Out New Opportunities

There’s no secret that pandemic impacted all traditional business sectors which increased demands in many specific areas. For example, B2C and B2B eCommerce, social media, health care products, and insurance, and others. Chinese companies rapidly addressed these new needs.

Social video platform Kuaishou compensated school and university closure by offering online education courses.  In cooperation with the Ministry of Education, the company created national cloud classrooms for students.

One more example is the promotion of new semi-finished dishes online by major restaurant chains. Offline down-time pushed cafes and restaurants to go online to satisfy the increased needs for home cooking.

Adapt to New Customers’ Needs

Usually, the prevailing part of enterprises takes defensive steps during a crisis like a rebalancing product portfolio. However, some Chinese companies weren’t afraid of innovations around emerging opportunities.

For example, Ant Finacial, an insurance company, added a free coronavirus-related coverage to its products. It helped to promote the company’s online services and improve customer loyalty. Ant Financial observed a 30% increase in health insurance income in February.

Shift to Online Sales Channels

When the authorities of Wuhan restricted person-to-person retail, Chinese enterprises rapidly shifted to new sales channels both in B2C and B2B sectors.  During the quarantine period, the cosmetics company Lin Quingxuan had to close 50% of their stores. Nevertheless, the company reallocated 100+ of its beauty advisors to WeChat, where they were engaging customers. As a result, it helped to achieve a 200% sales growth in Wuhan compared to the last year.

Secure Your Staff

In a crisis, official guidance may be contradictory, outdated, or not detailed. Moreover, mass media reports also create confusion by posting different perspectives and advice. Employees need to adapt to a new work style, which is difficult when they don’t have clear information or direction. That’s why you have to support your employees and develop recommendations for them.

For example, the largest Chinese kitchenware manufacturer Supor developed a granular guideline for its staff, which includes emergency plans and rules for dining in canteens.  Furthermore, the company purchased medical equipment and was regularly checking the health of its employees and their families. These measures helped the company to be prepared for the resumption of work and reopen several production lines in the middle of February.


Labor Diversification

The restaurant business is extremely vulnerable to epidemics and is suffering from numerous layoffs. However, Chinese companies preferred to reallocate their employees to new positions instead of cutting them. The most creative Chinese example of labor reallocation is loaning employees to other enterprises.

For example, numerous Chinese restaurants, hotels, and cinemas shared their workers with Hema, Alibaba’s supermarket chain. At that time, it was facing an urgent need in workers for delivery services due to the increase in online purchases. It was a total win-win situation for all the parties. Companies at losses cut down the expenditures on labor, big players closed the labor gaps, and people didn’t lose jobs.

Bottom Line

New consumption habits are significantly changing the face of traditional business as we’re witnessing a global acceleration of eCommerce. The question is, will these habits stick in the long run? It’s not an easy question, but we should spot the changes and follow the situation. New lessons are to come from all over the world.

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Julietta Kasparova

Julietta Kasparova

Julietta is a partnership manager at Mobecls who enjoys foreign languages and literature, traveling. She can't live without communication and meeting new people. Always ready for a talk on LinkedIn, so don't be afraid to make the first step.