Exploring Chinese Companies’ Response to Coronavirus

The year 2020 started off with a host of problems bombarding the global landscape. Coronavirus, also known as COVID-19, emerged at the end of 2019 in the Chinese city of Wuhan, engulfing the city, the country, and the wider world in a matter of only a few months. Claiming thousands of lives within China and globally, the pandemic reached its peak in March 2020, turning businesses, stock markets, and global commerce upside down, wreaking havoc in the international markets. 

The spread of the pandemic was followed by widespread lockdowns, trade restrictions, and travel bans which although disrupted the business working also opened up doors for the growth of other businesses. In spite of the negative social and economic impact, people’s behavior saw a shift—from fear to action on adjusting with the changing situation, and a shift from offline to online shopping. 

Today, when much of the world and China has recovered from the worst impacts of the crisis, brands and companies are gearing up to bring their businesses back on track. Some of the actions that Chinese brands undertook in response to the coronavirus point to the fact that their business models had undergone considerable change during the crisis. 

Here’s a look at how Chinese companies responded to coronavirus during and after its spread.

A Shift to E-commerce

During the pandemic, many Chinese companies anticipated and witnessed a drop in sales in their offline and brick-and-mortar sales channels. Owing to countrywide lockdowns and travel restrictions, maintaining a smooth supply chain became a challenge for many. Consequently, many companies took advantage of the internet access and shifted their sales from offline to online.

After the impact of coronavirus lessened in the middle of 2020, a sense of crisis-planning overtook many companies. Some of the fastest-recovering companies looked ahead, bringing about a shift in their supply chains. For example, in the early days of the coronavirus outbreak, Master Kong, a leading Chinese brand of instant noodles, brought about a change in its efforts. Since it was expecting hoarding and stock-outs, it changed its supply chain efforts from offline to online and from large retail channels to smaller shops. The move was highly beneficial for the firm as after the re-opening of businesses, consumers flocked to smaller shops. By being proactive, Master Kong was able to supply to 60% of stores that were re-opened during this time. 

Finding Digital Ways to Communicate

The coronavirus crisis brought about a change not only in the way the companies conducted their daily business but also in the way they communicated with their stakeholders. After the lockdowns, an unprecedented hike was observed in the use of social media channels and digital platforms as a result of the business shutdowns. Companies took advantage of this shift, taking their promotion and advertising efforts from offline to online channels, deploying their sales efforts to new channels in both B2C and B2B enterprises.

An example is a leading cosmetic company in China, Lin Qingxuan, which was forced to shut down 40% of its stores during the crisis, including all its store locations in Wuhan, the epicenter of the crisis. The company brought a change in the deployment of its 100+ beauty advisors from these stores to become online influencers who had the skill to leverage digital tools and social media communication skills. By using WeChat, Lin Qingxuan was able to drive its online sales and engage customers virtually. As a result, the company was able to achieve a 200% growth as compared to its sales in the previous year. 

A Rise in Remote Working and Jobs

The outbreak had brought a huge shift in the way people performed their daily routines, including the way they worked. As a result of the lockdown, people were forced to ‘work from home’. This ultimately led to many of these workers using online tools such as Alibaba’s DingTalk, ByteDance’s Feishu, Tencent’s WeChat Work, and Huawei’s Welink. Seeing the rise in their usage, these tools added new features in the past months, including an increased number of people who can conduct video conferences, online health check-ups, and industry-related solutions. 

As universities and schools in China remain closed for an indefinite time, education platforms are collaborating to minimize academic losses. Some online education platforms such as Liulishuo, Zuoyebang, and Onion Academy offered free online classes to school students nationwide. In addition, companies such as Alibaba’s DingTalk and Tencent Education launched online classrooms, allowing teachers to conduct online courses from their homes. 

Employee training was also shifted online. New Oriental, a provider of private education, moved its training online through video conferencing and online seminars. It allowed its CEO and other top executives to share their experiences with trainees across the country online. Since it was a challenge to arrange in-person meetings during the crisis, conducting training online from homes allowed a much larger trainee pool to get the required skills.

Leveraging Technology to Accelerate Social Responsibility

In the wake of the pandemic, people and organizations from the world over volunteered to provide medical and financial aid wherever possible. Some companies adopted a technology-driven approach to support these volunteer causes and to show preparedness for future epidemics. For example, Alibaba Cloud offered AI computing capabilities to the general public for free in order to support the virus gene sequencing, new R&D, and protein screening. Neusoft Medical donated high-end CT scanners, AI medical imaging, and advanced post-processing software to hospitals in China. Other companies such as Infervision went for the launch of an AI software, called Corona AI Solution for front-line medical officers to detect and monitor the virus on CT scans. 

Big companies not only showed support for the general public in China, but they also extended their support for small and medium-sized enterprises in the times of crisis. Some digital brands rolled out massive relief efforts to help small businesses. JD.com offered a host of incentives for the sellers on its platforms such as promotions, live streaming aids, and support on content marketing. Alibaba went as far as to offer free services to its sellers along with delivering support to farmers who had suffered major losses due to the pandemic.

The Last Word

Although the grip of the virus has loosened somehow, the effects that the pandemic incurred are far from over. As companies reel from the shock that the crisis exerted on supply chains, sales, marketing, and profits, a lot needs to be done to get back on track. A shift from the old traditional ways needs to take place where companies look forward to digitizing their sales efforts. This ‘digitization’ will not only be limited to changing the ways the companies conduct their operations, but also on how they communicate and collaborate with their customers. Only by having a progressive approach can these businesses combat the pandemics like coronavirus and future ones as well. 

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Antonia October 26, 2020 0 Comments