Jack Ma and his companies Alibaba and Ant Group, have received massive regulatory blows from Chinese authorities since Ma criticized them in October last year. Ever since Chinese billionaire Jack Ma gave a fateful speech late last year, Ma’s fate has turned for the worse. In the [...]
By Ashley Galina Dudarenok
China was one of the first countries to contain the COVID-19 epidemic with relative success, and the economy is better for it. The National Statistics Bureau reported 4.9% growth in China’s Q3 GDP year-on-year, showing improvement against both its 3.2% growth in Q2, and 6.8% Q1 decline.
This impressive rebound has earned China the title of the only major economy likely to advance in 2020, according to the International Monetary Fund (IMF). The results stand in sharp contrast to most of the world’s nations, which are struggling to juggle pandemic control and economic growth.
The five foundations that made China’s impressive rebound possible
1. Controlling the spread
The Chinese government saw controlling the spread of the virus as its utmost priority. While there were initial oversights and misjudgments in the early days of the pandemic, authorities soon implemented strict control and preventive measures to contain it. The initial clamp down on the spread of the pandemic ultimately made the economic rebound possible.
2. Coming together
A strong sense of unity in society helped to rebuild and reinforce China’s domestic business ecosystem. The central government created a conducive environment by lowering taxes and offering subsidies to certain industries.
Industries started adopting policies such as employee sharing schemes to provide more employment opportunities, and local communities and Internet giants alike donated supplies and money to pandemic relief. Consumers were motivated to support local businesses with government-issued coupons, a trend which lasted post-pandemic.
3. Staying agile and adapting fast
Thriving businesses stayed agile and adopted new business models as the pandemic progressed. For instance, some hotels started an additional business line by selling cookies when travel was not possible and room occupancy rates were suffering. Restaurants explored selling ready-to-cook ingredient packs when dine-in wasn’t possible.
4. Embracing digital all the way
As soon as the pandemic hit China, the pace of digitalization accelerated, and the switch to the digital consumption of all services was smooth and natural.
While digitalization may be happening everywhere, China offers a fuller immersion. Citizens can use Taobao to book a medical consultation. There are holographic projections of singers in bars. And these aren’t big-city phenomena: we can see the application of livestreaming and online payments in wet markets and in villages across the country.
5. Reimagining new consumption scenarios
Thanks to the quick restoration of consumer confidence, multiple new consumption scenarios, such as home entertainment and community retail, have been generated.
Community retail isn’t new – it started back in 2018. Sellers post information about new arrivals in a WeChat group, and a community can elect to purchase the products together.
One community retail platform, Shixianghui, only covered 60 communities in Wuhan before the outbreak, but reached 6,000 communities at the peak of the pandemic. Alibaba’s Freshippo, JD.com’s 7 Fresh, and even luxury brands have now adopted this business model.
5 leadership lessons businesses can learn from China’s rebound
China’s government, business, and cultural responses to the pandemic can give businesses some constructive pointers on adapting to the devastating effects of the pandemic.
1. Craft your strategy for the new normal
Consumer behaviors, preferences and purchasing journeys have changed. The new normal in China has created new demands and new consumption scenarios, and this environment could just as easily be fostered elsewhere in the world.
One general rule of thumb is to always make sure that your strategy is customer-centered. Actively listen to changing needs in the market.
Another useful strategy is diversifying your business model, giving the company one or more extra legs to stand on in hard times. For instance, in 2020, my training and keynotes business was heavily impacted by the pandemic. However, components such as strategy and expert calls are popular like never before.
2. Speed and agility are key
China has experienced some of the most radical transformations in recent history, largely due to being so fast-paced. In practice, this means thinking about your next steps in the morning and taking action in the afternoon.
Xiaomi is famous for not having a strategy for its business. Each department head only has one goal at the beginning of each year: double the revenue. They simply get right to work and keep trying until they achieve the goal.
What’s the lesson here? Just do it. Act fast, fail fast, and get back up fast. Set up agile structures and modify your action plan along the way so you can respond to future disruptions better.
3. Collaboration brings good
We have already seen how China’s administration, businesses, consumers, and farmers came together. Partnerships and collaborations are important factors helping China move quickly.
Seek opportunities to collaborate with different parties and build out your ecosystem. Reevaluate and broaden your network of potential partners. Are there opportunities to collaborate with your competitors?
These collaborations can happen across different industries as well. Alibaba launched a Rural Support Program enabling farmers to access Taobao Live at no cost, ultimately helping farmers sell more than 100,000 tons of agricultural products. It served a multilateral business case: not only did it benefit farmers, it also served consumers looking for fresh produce, and was profitable for Alibaba.
4. Empathy and optimism win business
Show empathy for your customers and your in-house team during and after the pandemic. Foster a sense of optimism and inclusion to lift and empower others to perform in moments of crisis.
Staying human benefits businesses in return. Business owners who showed empathy, helped with the pandemic response, or changed their marketing strategies to reflect post-pandemic values were better received in the eyes of consumers.
5. Say ‘yes’ to livestreaming
Livestreaming is the name of the game in China; more and more products and industries are driven by it. This trend has penetrated into markets outside of China too, and will only become more important as time passes.
The paradigm shift often starts from the top. For example, the head chef at Meizhou Dongpo restaurant in Beijing now spends his days livestreaming cooking tutorials rather than preparing food. This helped boost sales of the restaurant’s luncheon meat 22 times year-on-year.
In conclusion, China has shown a remarkable recovery from the pandemic, with credit due directly to the actions of stakeholders at every level of the economy. The success cases and best practices employed by Chinese companies are a study in remaining agile and adaptable.
In short, remember that every crisis is an opportunity, and a world of opportunities is up for grabs.
Ashley is the Founder of ChoZan and Alarice.
About the Author
Ashley is a renowned China marketing expert, entrepreneur, speaker, vlogger and bestselling author. In 2019, she had the honour of being recognized as a LinkedIn Top Voice in Marketing in 2019 and an Asia-Pacific Top 25 Innovator. She is the founder of two companies: China-focused social media agency Alarice and China digital marketing consultancy and training company ChoZan.