The U.S. is running about two weeks behind Italy in the progression of COVID-19 cases. If you’ve followed what’s happened in Italy, then you already know it’s going to get worse before it gets better. At the same time, we can also look at China. Less than two months after initiating lockdowns, they are largely on the other side of the crisis and it’s already getting better. What can we learn from how Chinese companies responded to this unprecedented business environment?
The recovery will be faster than you expect
China is recovering, and recovering fast. For example, right after the lockdown, real estate transactions were 1% of last year’s volume, and just six weeks later it was back up to 47%. Similarly, coal consumption dropped to 43% of 2019 levels, and has already recovered to 75% (not that massive coal consumption is a good thing, but it shows the speed of the economic recovery). Starbucks closed more than half of their 4,300 stores in China, but 90% of them were reopened within 40 days of the lockdown.
The drop is steep, but so is the recovery.
The online trend accelerates
Cosmetics company Lin Qingxuan was forced to close 40% of their stores. They turned their 100+ in-store beauty consultants into online influencers, and actually grew sales by 200% year-over-year.
There is no going back after success like that.
Remote work is a reality
Online education company VPKid hasn’t previously allowed their employees to work from home, but under this forced experiment, the CEO has come to the conclusion that they are actually more efficient. Sun Meng, who is a curriculum planner and designer, previously spent four hours a day commuting. No wonder she’s more effective!
Exposed to the benefits of remote work, more employees are going to demand the option.
Master Kong is a leading instant noodle and beverage company. By constantly monitoring store re-openings, they were able to manage their supply chain and make deliveries to three times more of the re-opened stores than their competitors, boosting the speed of their recovery.
They knew recovery was coming and planned for it.
Move to digital
The Chinese branch of a global confectionery manufacturer used the crisis as a catalyst for accelerating its existing digital transformation. They canceled offline marketing activities for Valentine’s Day and reinvested all resources into digital marketing.
Traditional events like trade shows and conferences are the source of many sales opportunities in B2B. Now is the time to move that networking activity online.
Food delivery networks accelerated their growth during the crisis, helping the millions of restaurants serve their customers even though they couldn’t let them through their doors.
How can you deliver your product or service in a new world, now more accustomed to end results just showing up at their doorstep?
Harvard Business Review has extracted 12 early lessons from Chinese companies.
All the best,