5 lessons businesses can learn from China’s remarkable post-COVID-19 rebound

China is one of the first countries to contain Covid-19 epidemic with relative success and its economy even managed to rebound. The National Statistics Bureau reported China’s GDP in Q3 at a 4.9% growth, showing improvement against its 3.2% growth in Q2 and a decline of 6.8% in Q1. The rebound in China’s economy is impressive and it will be the only major economy to advance in 2020 according to the International Monetary Fund (IMF). This casts a sharp contrast with most parts of the world as they are still struggling to keep the pandemic under control, let alone achieving economic growth.   

This article was first published in Jumpstart Magazine in March 2021.

THE 5 FOUNDATIONS THAT MADE CHINA’S IMPRESSIVE REBOUND POSSIBLE

1. CONTROLLING THE SPREAD

The Chinese government took controlling the spread of the virus as the utmost priority. While there were initial oversights and misjudgment in the early days of the pandemic but authorities soon implemented strict control and preventive measures to contain the COVID-19 outbreak. It was only the initial successful control of the pandemic that made the economic rebound possible. Just to give an idea of the fast recovery timeline in China. China went into lockdown in late January. In early April, Wuhan, the epicenter of the outbreak, reopened. In August, the Beijing government removed the requirement of people wearing masks in the public. Social gatherings were reopened and there was even a huge pool party packed with hundreds of people in Wuhan. Almost no one wears masks in China right now, amusements parks are open and domestic tourism is booming. China’s back to ‘normal’.

2. COMING TOGETHER

There has been a strong sense of unity in society to rebuild and reinforce China’s domestic business ecosystem. The Central government created a safe environment by lowering taxes, giving out subsidies to industries while nearly 50 cities across 16 provinces stimulated consumption in communities by distributing coupons and used livestreaming to sell products such as tea, cookies, and even real estate. Industries started adopting policies such as employee sharing schemes to provide more employment opportunities. Local communities come together like never before, too. For instance, over 1600 private businesses and 500 organizations in Chongqing donated supplies and cash worth over 300 million RMB for pandemic relief. Chinese internet giants such as Tencent, JD, and Kuaishou donated millions worth of masks and medical supplies to support Wuhan and other regions. Consumers were motivated to support local businesses with the government-issued coupons and local retail industries were able to make gradual recoveries. The desire for domestic brands remains high in the post-COVID era as citizens have become active in supporting local businesses. 

3. STAYING AGILE AND ADAPTING FAST

Thriving businesses stayed agile and adopted new business models as the pandemic progresses. For instance, some hotels started an additional business line by selling cookies when travel was not possible and room occupancy rates were suffering. Nightclubs started doing virtual clubbing and virtual featured DJ performances. Restaurants explored group buying and delivery services as well as selling ready-to-cook ingredient packs when dine-ins were not possible. That provided convenient cooking solutions to their customers, and also facilitated sales and minimized wastage of their food inventory. Xibei, a domestic restaurant chain, used livestreaming during COVID-19 to attract users and also to promote the restaurant's products to reduce losses incurred during the epidemic. 

4. EMBRACING DIGITAL ALL THE WAY

It’s no secret that China has been one of the most forefront players in the digital scene. There has always been an abundant supply of technology, consumer base and products in China. As soon as the pandemic hit, the adoption of digitalization accelerated and the switch to the digital consumption of all services, i.e. remote work, online education, online healthcare and medicine was a very smooth and natural transition. While digitalization is abundant everywhere in the world, it goes into full immersion in China. Citizens can simply go on Taobao to book a medical consultation with doctors. B2B exhibitions are commencing at a physical location as well as via livestreaming. There are now holographic projections of singers in bars and restaurants. That’s not only happening in big cities. We can see the application of livestreaming commerce, online payments, etc. in wet markets of small counties, on farms and villages in the least economically developed parts of the country.

5. REIMAGINING NEW CONSUMPTION SCENARIOS

Consumer confidence was quickly restored and generated multiple new consumption scenarios, such as home entertainment and community retail. The pandemic has fueled the development of fresh food commerce and community retail in China and accelerated advancements in the industry. Community retail is not a brand new concept and started back in 2018. Sellers post information about new arrivals in a WeChat group. People purchase them through the group and have the products delivered to the community. It’s an offshoot of the group buying phenomenon but focused on early sales, presales and community groups buying from local stores. One of the community retail platforms, Shixianghui, only covered 60 communities in Wuhan before the outbreak but reached 6,000 communities at the peak times of the pandemic. Community retail would remain big in China even in the post-COVID era. Now Alibaba’s Freshippo, JD.com’s 7 Fresh and even luxury brands are using this business model as well.

5 LEADERSHIP LESSONS BUSINESSES CAN LEARN FROM CHINA’S REBOUND

The rebound in China has given us a few pointers as to how businesses can learn from China. Most of the thriving successful businesses managed to learn these lessons and took action to recover and rebound from the devastating impacts of the pandemic.

1. CRAFT YOUR STRATEGY FOR THE NEW NORMAL

Consumer behaviors, preference and purchase journeys have changed. Your strategy and solutions shall too. Actively listen to the changing needs in the market. In the post-COVID-19 times, the new normal in China has created new consumers, new demands and new consumption scenarios. One general rule of thumb is to always make sure that your strategy is customer-centered. Success is only possible when the purpose and priorities of your business stay aligned with your customer’s. 

Diversify your business model. It’s like having 7 table legs to your table. Even if 2 or even 3 of these legs break, the table (in this case your business) is still stable. 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. In my case, the diversification of business models, i.e. marketing retainer, consultation, subscription services, video courses, book sales, etc, and the focus on my core expertise, i.e. China marketing is the way to go in 2020 and beyond.

2. SPEED AND AGILITY ARE KEY

China is a very fast-paced ecosystem and this is also another reason why it has welcomed some of the fastest developments in recent history. Learn from it. Think about your next steps in the morning and take 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 goals. 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.

2. COLLABORATION BRINGS GOOD

We have already seen how China’s administration, businesses, consumers and farmers came together. Partnerships and collaborations are important foundations to help China move fast.

Seek opportunities to collaborate with different parties and build out your ecosystem. Reevaluate and broaden your network of potential partners. Are there opportunities you can collaborate with your competitors? These collaborations can happen across different industries as well. Alibaba launched its Rural Support Program so farmers can access Taobao Live at no cost and also have access to other tools and resources offered by the Alibaba Digital Economy. By mid-March, farmers had sold more than 100,000 tons of agricultural products. It wasn’t only for a good cause and of benefit to farmers. It also helped consumers looking for fresh food and was profitable for the platform. 

4. EMPATHY AND OPTIMISM WINS

Embrace the human element in your business. Show empathy for your customers and your in-house team during and post the pandemic. Foster a sense of optimism and inclusion to lift and empower others to perform in moments of crisis. Staying human also does good for businesses in return. Business owners who showed empathy, helped out in the pandemic response, donated money or items, or enabled the vision of a better tomorrow in their marketing strategies are better received in the eyes of consumers. A recent survey by Bain & Company reported that local Chinese brands suffered less than the foreign brands in the COVID-19 era. Chinese consumers are also reported to show a preference for domestic brands right now, many agree that an important reason is the support local players showed during the most difficult times earlier this year.

5. SAY YES TO LIVESTREAMING

Livestreaming is the name of the game in China, more and more products and industries are driven by it. Livestreaming is used well beyond the e-commerce scene and is deemed as the most exciting skill to acquire for marketers and salespeople in China. Livestreaming has greatly infiltrated the daily lives of people outside of China, too, and will only become more important as time passes. Businesses need to start getting on livestreaming as the world is becoming more adapted to it. Leaders should make an effort to popularize the idea of livestreaming within the organization. For example, the head chef at Meizhou Dongpo restaurant in Beijing now spends his days livestreaming and demonstrating cooking tutorials for online viewers rather than preparing food for dine-in customers. Livestreaming has helped boost sales of the restaurant’s luncheon meat 22 times more as compared with last year. It can do the same for your business.

China has shown a remarkable recovery. Study and act on these 5 lessons from China’s post-COVID-19 rebound. Remember that every crisis is an opportunity, and it’s up for grabs. 

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