Lessons that e-Commerce Business Can Learn From China | EightDevs Blog
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eCommerce Business and Remote Work: Chinese Experience

  • Xenia Liashko
  • 2020-04-24 21:54:00

The Covid 19 crisis has spread to new epicenters in Europe and the US, and companies are trying to mobilize a response. Given the complexity of the crisis and its impact on the global economy, there is no easy answer. Of course, every local situation is different, and China seems to be in the early stages of economic recovery. But we believe that businesses can learn a lot from the experience of regions that are weeks ahead in responding to the epidemic. Chinese companies are already moving from crisis response to recovery and from recovery to recovery. We have learned 9 of the earliest lessons from Chinese business stimulus programs from leaders elsewhere. Of course, China has its own unique challenges and challenges, but many of these lessons seem universally applicable.

Constantly Reframe Your Efforts

Crises, by definition, have a highly dynamic course that requires a constant reformulation of mental models and plans. CEO by avoiding getting bogged down in complex internal coordination processes and reacting slowly to changing circumstances. In China, some of the fastest-recovering companies foresaw the future and anticipated such changes. Initial ignorance gave way to a more realistic view of their future and a better understanding of themselves and their competitors. Stock hoarding and outsourcing were expected as the focus shifted away from offline to larger retail channels. Continuous monitoring of store opening plans also enabled companies to adapt their supply chains in a highly flexible manner. Leading manufacturers such as General Electric, General Motors, and Toyota have reviewed the dynamics and reassessed their plans. The supply chain has recovered since then, but there is a need to supply enough supplies to open new stores and deliver long-term supplies during this time.

Bottom-Up Approach For Complementing Top-Down Efforts

Rapid, coordinated responses require top-down leadership, but adapting to a more decentralized bottom-up approach to implementing decentralized initiatives also requires decentralized initiative - from initiative to initiative. Chinese companies have balanced these two approaches by creating a top-down approach for innovative employees and a bottom-up approach for innovative employees.

Huazhu, which operates more than 6,000 hotels in more than 400 cities in China, has set up a crisis unit that meets daily to review procedures and issue guidelines for the entire chain. It also uses an app called Huatong to make sure employees and franchisees are informed about the best times. This enables franchisees to adapt important guidelines to their own local circumstances.

Create Clarity And Security For Employees

When the situation and the information available to you are constantly changing and driven by exponential logic and contagion, it can be difficult to find clarity. Moreover, the confusion is exacerbated by differing views and advice from the government, the private sector, and even the public sector. Official advice can be not only vague and not detailed for all practical purposes, but also contradictory and often inaccurate.

Chinese companies provide very proactive guidance and support to their employees. Staff will have to introduce new ways of working, and they will only be able to do so if they have clear and consistent information and a general direction. For example, they introduced a new policy to limit food exposure in the canteen for contingencies. In addition, the company procured preventive equipment and introduced new safety measures such as the use of protective clothing and equipment. Production lines resumed in the second week of February and were well prepared for the resumption of work on time.

Reallocate Labor Flexibly To Different Tasks 

Chinese companies are actively relocating employees and even lending them to other companies. Even in hard-hit companies, employees can carry out their regular activities. The employees then shared their experiences with a new supermarket chain owned by Alibaba, which is in desperate need of deliveries due to the sudden rise of online shopping. The workers also borrowed money from a restaurant, and the employees followed suit with their own jobs in the same company. They also streamlined their staffing to make way for other activities such as building new restaurants and retail outlets.

Rebuilt Sales Channel Mix

Passenger and brick and mortar trade were severely restricted in the affected regions. Chinese companies had to quickly shift their sales efforts to new channels (B2C and B 2B companies). During the crisis, for example, cosmetics company Lin Qingxuan closed all its retail stores in China, including its flagship store in Beijing and its offices in Shanghai.

However, the company has retrained its more than 100 beauty consultants to become online influencers, using digital tools such as WeChat to engage with customers virtually and drive online sales. As a result, sales in Wuhan increased by 200% compared to the previous year.

Coordinate Employees And Partners Through the Social Media

According to a new report by the Chinese Academy of Social Sciences, Chinese companies use social media like WeChat to coordinate with employees and partners. For example, they hire employees to boost their social circles, generate revenue - promote programs on WeChat, and motivate the rest of the workforce to join the initiative.

Prepare For A Faster Recovery Than You Expect

Just over six weeks after the first outbreak, China appears to be in an early stage of recovery. Traffic congestion has fallen to about 30% of the worst parts of China, compared with 62% in some of the worst parts before the epidemic, suggesting that passenger and freight traffic will resume. Similarly, coal consumption appears to have recovered to 1% of 2019 levels, suggesting that production will resume. Confidence also appears to have returned, as evidenced by real estate transactions, which fell to a level of -1% in 2019 but have since risen to 47%.

Rapidly Innovate Around New Needs

In addition to realigning your product portfolio, these new customers also create opportunities for innovation and, in some cases, new business models. In response to the crisis, Ant Financial has added free coronavirus protection to all its products. The insurance industry is notoriously conservative, but health insurance revenue is expected to rise 30 percent in February compared with the previous month. Chinese companies, such as Tencent, China's second-largest insurance company, are courageously seizing this new opportunity. This campaign not only meets customer needs but also promotes improved customer loyalty.

Spot New Consumption Habits Being Formed

Indeed, the SARS crisis is often credited with accelerating the adoption of e-commerce in China, and this shift is likely to continue beyond the crisis. Many sectors in China and elsewhere will rejoin this new market reality, but it is too early to say with certainty whether these new habits will last. However, major opportunities include the emergence of new markets, new business models and new opportunities for consumers. Chinese companies are already planning for these changes in the post-crisis world, and they are not the only ones in China with such plans. The global confectionery manufacturer's Chinese business is accelerating its digital transformation efforts. The company is investing resources to benefit from this new outbreak of consumer behavior and is canceling its plans for a new digital marketing strategy for its products and services.

No doubt there will be more new lessons to be learned from seizing the opportunity to codify and apply lessons from other regions to better protect workers and businesses. This adaptive approach can be extended to crisis management in the rapidly changing world of the global economy, especially in times of crisis.