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When the COVID-19 pandemic began to spread, China was the first country to be impacted. What can we learn from how China’s businesses have responded?
By Nancy Wu, Managing Director Grayling China
Impacted by the COVID-19 pandemic, China’s GDP in the first quarter of 2020 fell by 6.8% year-on-year. It was announced during the third session of the 13th National People’s Congress that no specific target for GDP growth would be set. This is the first time since 2002 that no target for annual economic growth has been proposed. The Chinese government has shifted its economic focus from growth to pragmatic stability, and most companies have adopted similar strategies too. In this blog post, Nancy Wu, Managing Director of Grayling China, explores on how businesses have steadily built and maintained brand reputation during each distinct phase of the pandemic.
1. Outbreak period
Talk less but do more: practical actions form the bedrock of good communications
In China, the COVID-19 pandemic broke out in mid-January, in the midst of the Chinese Lunar New Year. A swift decision was made by the Chinese government to control people flow both at home and abroad by extending the one-week Spring Festival holiday to 18 days, and then requesting for organizations to work from home as much as possible. During this phase, responsible businesses led by example – not only heading the government’s advice but also taking additional actions to proactively play a part in reducing the spread of the disease.
As history has shown, the excessive promotion of a brand during a major disaster usually leads to significant public backlash. Consumers in China have high expectations of how businesses should help the country and society during times of crisis. Some individuals have published the amount of goods, materials and money donated by businesses operating in China; if the amount does not meet expectations, it is very easy for enterprises to garner criticism from the public. We believe that at this early stage of a crisis, businesses should uphold social responsibility and empathy and provide help and support to the community as much as they can, rather than focus on communicating brand promotions.
In addition to an official donation of 30 million RMB, our client Huawei donated equipment and materials worth about 100 million RMB to Wuhan. Huawei also supported the opening of “Huoshenshan” Hospital and supplied the grounds with a high-speed 5G network. In a similar case of corporate support, Alibaba set up a special fund of 1 billion RMB for medical materials supplies and a health insurance fund of up to 500,000 RMB for frontline workers. The firm coordinated the production and purchase of medical materials and sent them to hospitals in Wuhan and other cities in Hubei. In addition to local Chinese companies, multinational enterprises such as Honeywell also took action. It donated materials worth $1 million to support the fight against COVID-19.
At the very height of the epidemic, we believe that enterprises should adopt the strategy of “talk less but do more”. Fancy and excessive brand marketing promotions should be avoided. Providing real support and help to the people and regions affected by the epidemic is the right thing to do.
2. Critical period
People first: Positive energy boosts morale
After the initial spread of the virus was controlled, businesses in China transferred their focus from providing healthcare-related materials to actual help for the people, the front-line medical staff and their own employees. How enterprises utilize and expand their influence is crucial to winning public support and employee loyalty, especially when people are worried about the future.
Meituan, a well-known catering delivery platform in China, cooperated with several catering businesses to launch a “medical emergency meals” program, offering free daily food and logistical support for front-line medical staff. Alipay collaborated with Tmall Supermarket, Cainiao Smart Logistics and the Eleme food delivery platform to provide daily necessities for medical teams in and around Wuhan. At the same time, international enterprises including Kimberly Clark joined hands with Tencent Charity Foundation to donate additional medical supplies for doctors and nurses.
For employees adapting to new working practices, CONVERSE held a series of online training courses to upskill and train their teams while working from home and hosted online activities such as meditation and yoga to help employees to destress and keep healthy.
During this period, businesses should put people first and use their influence to help others and support social stability. Communicate core corporate values through heartwarming stories told by employees or volunteers. This will not only effectively enhance brand reputation, but also boost public morale.
3. Post-epidemic era
Innovation transformation: the digital opportunity
Once the COVID-19 pandemic was effectively controlled across the country, people’s lives and work gradually returned to normal and China slowly entered the “post-pandemic” period. However, according to a People’s Court announcement, many businesses, especially small and medium-sized enterprises are still struggling to recover. More than 1000 enterprises have issued bankruptcy announcements, and survival has become the main goal of many small and medium-sized companies.
In this unprecedented time, how businesses obtain enough stable cash flow is the first problem they need to solve. It is also particularly important for enterprises to accelerate the adoption of digital technologies. Many brands in China have shifted to e-commerce sales through live streaming platforms and leveraging new marketing channels and technologies.
In order to promote their fried chicken during the pandemic, the CEO of McDonald’s China promoted new product launches on a global live streaming platform for the very first time.
In addition to McDonald’s, more C-suite executives in China have started to sell products on live streaming platforms. Take Mr. Liang Jianzhang, the chairman of China’s largest online travel agent CTrip for example; he has been selling hotel vouchers valued at over 300 million RMB via online platforms such as TikTok, Kwai and WeChat. Similarly, Ms. Dong Mingzhu, chairman of household electrical appliance brand GREE, achieved amazing sales results of 100 million RMB within half an hour, by using online and social media platforms.
COVID-19 is a turning point for brands. Enterprises need to quickly grasp the change in consumer behaviors and embrace innovation and new technology, so as to effectively and proactively respond to the challenges posed now and in the future.
COVID-19 has had profound impact on the whole world. We have seen different countries adopt different strategies and means in the face of the pandemic. In this uncertain time, understanding the differing characteristics of different markets around the world and adopting tailored communications approaches for each can optimize impact and help avoid potential misunderstandings.
The Chinese market is complex and challenging. Values of nationalism, patriotism and collectivism are widely held, along with the desire of Chinese consumers to conform to societal norms. Chinese consumers are more willing to choose mainstream products and services and tend to follow the mainstream point of view. If businesses want to deliver successful marketing communications in the Chinese market, they must first understand the characteristics of the market to succeed.