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How Chinese companies responded to Covid-19 and its economic impact

© Effie
© Effie   -   Copyright  Effie   -   Alex Xu, President of Effie Greater China, Senior Vice-President of Effie Worldwide (left) Alenka Potočnik Anžič, Marketing Director of Hisense Gorenje Europe (center) Carol Chang, EMEA Marketing Director at WeChat Pay (right)
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Since the first cases of the Covid-19 virus emerged in late 2019, it has claimed almost 700,000 lives and affected almost every country in the world in unprecedented ways.

As countries and cities were locked down to contain the virus, industries of every stripe took a huge hit, causing a slump in global economic activity and creating mass unemployment as workplaces were forced to close down.

China was among the first countries to successfully contain and control the virus, and consequently Chinese businesses had a headstart in finding ways to adapt to the new reality. Alex Xu, president of Effie Greater China and senior vice-president of Effie Worldwide, talked to Chinese businesses such as WeChat Pay and Hisense to learn more about the issues they face and the strategies evolving to deal with these.

Effie is a global not-for-profit organisation, whose purpose is to lead, inspire and champion the practice and practitioners of marketing effectiveness through education, awards, ever-evolving initiatives and first-class insights into marketing strategies that produce results. The organisation recognizes the most effective brands, marketers and agencies, globally, regionally and locally through more than 50 award programs across the world and through its coveted effectiveness rankings, the Effie Index. Since 1968, Effie has been known as a global symbol of achievement, while serving as a resource to steer the future of marketing success.

“This is a defining moment in business,” said Xu. “The impact of Covid-19 is affecting both small and big business. Marketing leaders need to stay the course and adapt to the evolving new normal. For every problem there is a solution, and shopping demand will eventually rebound with huge growth opportunities.”

Shifting to e-commerce

He spoke to Alenka Potočnik Anžič, marketing director of home appliance manufacturers Hisense Gorenje Europe. After sales in offline channels stopped “almost overnight in most of Europe,” she said the company – which already had a well developed online business and high market share in countries including the UK, Germany and Russia – urgently transferred further resources into the development of its e-commerce side.

One advantage held by the company was an HQ in China, which had already weathered the worst of the storm and had gained valuable knowledge in constructing a response. Hisense Gorenje Europe was able to look at these case studies and adapt them to their own markets. These online initiatives helped the company to face down the challenges and compensate other losses.

In tandem with a bottom-up approach to supporting the development of the e-commerce business, Potočnik Anžič told Xu that “We set a clear midterm strategy with the goal of improving overall marketing performance, shifting our focus from inside-out to outside-in by tracking the overall customer journey.”

She explained that the primary focus for marketing is omnichannel communication and marketing solutions need to be developed accordingly. “Good marketing makes the company look smart. Great marketing makes the customer feel smart.”

Asked for advice to give to other European marketers, she stressed trust, effective communication, and above all the intelligent use of remote tools: “Borders are mainly in our heads.” She emphasized the positive aspects of employees working from home, and how in many ways coworkers were able to connect better than in those times when communication was limited to physical interactions.

The rise in online transactions

Carol Chang, EMEA marketing director at WeChat Pay, also stressed the importance of the shift to online activity. “The pandemic has accelerated the digital transformation of many businesses,” she told Alex Xu, and explained that in the absence of face-to-face commerce, WeChat helped shops to find new revenue streams online.

During the lockdown in China, WeChat saw a notable increase in the adoptions of ‘mini programs’ – smaller apps accessible from within WeChat itself – and mini-program livestreaming, and is now seeing a similar trend in Europe.

These mini programs might include shops or delivery services, spanning both international and local businesses, and provide a way for retailers to have direct contact with customers. This is particularly crucial as a means for businesses to serve while tourism is down, as well as high-street footfall.

Chang believes that even as the pandemic situation begins to ease, many of these changes are likely to remain in place, and that cross-border commerce will continue to provide opportunities to tap the all-important Chinese market. “We would advise merchants to take the opportunity to build up their online presence on WeChat and prepare for the rebound,” she says.

As the long-term effects on business around the globe become clearer, this advice could be rolled out to other regions, as one thing’s for sure – businesses’ reliance on e-commerce is unlikely to return to pre-2020 levels.