How to manage your business with China at the time of Coronavirus

The spread of Coronavirus from China to Europe is generating significant changes in the world economy and consumer behavior.

China is the economic epicenter of Asia and the virus is severely testing multiple sectors and all the companies / professionals who operate and do business with the Country.

Now that Italy has also been attacked by the virus, the need to keep the business active is stronger than ever.

Global tourism and retailing have been hit particularly hard, as Chinese tourists provide an important source of income for many markets and Italy is a favorite destination for tourists worldwide.

In China, some businesses have come to life this week, but concerns about the virus are far from over, with many offices still closed and employees choosing to work from home.

It is not a comforting scenario, but the choice is not – and cannot – be abandoning years of work and investments in a market that will soon return to the center of the world economy. In this moment of deep crisis, the only possibility for companies is to minimize damage and better manage their work in order to be ready at the moment of recovery.

What we often forget is that this is a temporary crisis. If the development of the coronavirus were to follow a timeline similar to that of SARS, we can predict that retail will begin returning to normal in summer. It is at that moment that we must aim, with vision at when all Chinese citizens, closed for months in their homes, will return to normal more eager than before of traveling and making new purchases.

Several companies have grasped the change that coronavirus has brought to stand out even in this historical situation. With the government requesting millions of Chinese citizens to stay at home, most of the offline stores, cinemas, restaurants have been closed for over a month, in favor of e-commerce platforms and online in general.

Obviously, non-essential goods have also slowed down online sales. At the end of the day, why buy a new dress or a new accessory if I can’t go out and wear it?
Chinese consumers have decreased purchases, but increased the use of games, social media and training platforms. This is where the real opportunity is found for brands that have commercial relations with China.

Online performance keeps growing

In dark scenario of a slowed down market, the only sector that seems not to have suffered sharp slowdowns is digital. 

Chinese New Year is normally a growing season for online product performances, as people have more free time to devote to social media and shopping. This year, with the quarantine imposed by the Chinese government, online performance has been even greater. 

According to a report on WeChat between January 20th and February 2nd, accounts on short video social platforms such as TikTok and Kuaishou gained between 100,000 and 500,000 new followers. The report explains that state-run social media accounts have experienced the greatest growth on both platforms. On all social platforms, content related to health and fitness, and games for children were the most popular during the spread of the virus followed by livestream, adult games, and online training apps.

Utopia’s advice for dealing with this delicate historical moment

Be supportive

Although the virus generates a lot of fear and discomfort in our own country, with a profound uncertainty in terms of the performance of the Italian companies themselves, showing support and empathy is certainly better than remaining silent (or worse accusing China of having spread the virus). 

Support does not necessarily have to be of an economic nature, even a simple message of encouragement or the creation of campaigns aimed at raising awareness are widely appreciated.

For example, hospital workers must continually wash their hands and suffer from extreme dryness in the skin, sometimes wounds. Several brands have taken steps to ship their hand moisturizers to hospitals.

Forget sales and commit to communicate your brand values

With the decrease in sales, several companies have chosen to completely block their marketing in China. The equation is simple, the marketing budget is extracted as a percentage of sales, if there are no sales, there must be no marketing. Correct?

In the meantime, some companies have decided to continue investing in their digital communication with the aim of increasing their brand awareness exponentially, and the message that has reached consumers is “we are not just a commercial brand” and “we believe in your market”.
Several brands took advantage of the presence of online users to create games, training platforms or fitness classes for their customers who are forced to stay at home, keeping their presence alive and sending a positive message to consumers.

If you are offline, take the ball and move to digital

Several companies still entrust much of their services and sales exclusively to offline activities, but China is the largest digital market in the world and it has been even before the coronavirus! What are you still doing offline? 

Everything is online in China, social media is the main “search engine” used in the country, e-commerce is constantly growing and the country is about to adopt a digital cryptocurrency.

The current situation has given the market a further push towards online activities and you cannot continue to lose such large market shares.

This does not mean eliminating your offline activities. At the end of the crisis there will be a great demand for new experiences, such as restaurants, KTV, travel, spa (which could suggest to brands that normally operate exclusively online of building campaigns based on experiential activities). 

What we want to say is that digital rules on most of the communication and sales dynamics in China, and this fact can no longer be ignored.

An example of a brand that has worked very well following an online and offline integration logic is Prada.

Milan Fashion Week suffered heavily from the absence of Chinese celebrities and influencers. 

Having already integrated several digital strategies into its daily communication with the Chinese public, the Italian maison has faced the challenges of the Covid-19 virus in an excellent way.

First of all, the show was broadcast live on their WeChat miniprogram (it is the third time they make a decision of this type).

They also shared the show’s “behind the scenes” with the public, managing to involve millions of users . 

Cai Xukun, the Chinese spokesperson for the brand, was not present at the show due to travel restrictions between Italy and China, but helped to engage the public online thanks to a collaboration with a famous Korean singer. 

In addition, the themes of the fashion show, technology and sustainability, have been widely appreciated by the Chinese public. 

Finally, Prada has decided to open a flagship store on Tmall, confirming the trend of brands to switch from exclusively offline experiences to online ones.

Empathy, entertainment, training and digital are the keywords for your communication in China during the coronavirus, creating a recognizable brand associated with positive values is always the best marketing strategy you can have.