The truth of what's happening in China
Updated: Mar 27, 2020
What’s happening in China? What impact has COVID-19 brought to China’s economy?
Our Director of China Marketing Doris Li spoke to Vito Wang in our Beijing team to find out how life is in China today and to paint a real picture of China at this challenging time.
Doris Li (born in Shanghai and now a proud Melbourne resident) leads the China marketing practice at How Communications. She has over 15 years' experience in marketing across China and Australia. With Doris’ strong connections in China, How Communications has established a team network in key Chinese cities including Beijing and Shanghai with over twenty consultants.
Vito Wang leads the on-the-ground execution team for How Communications in China. Vito has 15 years of experience in marketing and PR in China. He has led strategies and campaigns for clients including Samsung, Maeil Dairies, Shiseido, Cooper Tire, NEC, China Mobile.
D: Is business back to normal?
V: At present, various provinces and cities in China are gradually reducing and canceling control measures, and residents' lives have gradually returned to normal. Several provinces have resumed schools this week. The focus of prevention in Beijing Shanghai, Guangzhou, Shenzhen and other first-tier cities has shifted to imported cases.
Factories and service industries are returning to normal one after another, and there are also policies in various provinces, cities, and regions to encourage return to work. However, the impact of the pandemic will still exist more or less until the school is fully resumed.
D: Who is doing well – what type of businesses and why?
V: Due to the COVID-19 situation, people are ordering daily consumer goods from e-commerce channels, which has seen an upsurge from the second half of last year due to the popularity of live streaming. As people are staying home, some FMCG products have experienced an increase in sales, including rice, noodles, oils, cooking wines, beverages, baking materials and other products that you could DIY at home. In other words, products that could help people to spend time at home, including toys like Lego and books.
D: What mistakes do you see from Western companies entering the market?
V: First is the understanding of policy risks, especially in new areas. China's policies and regulations still have incomplete areas, or in other words, the policies are not global enough yet. Some changes in policies will directly affect the strategy of overseas companies.
Second, whether overseas companies are fully prepared before entering the Chinese market, have a sufficient understanding of the market, and have a comprehensive response strategy in the face of the situation they encounter. It is important to have people who have a proven China marketing record in your management team or as consultant. Try to avoid those who have been to China once or twice but calling themselves a “China expert”.
Furthermore, it is very important for overseas companies to decide their team structure in China (foreign employees or local management), as well as selecting trustworthy Chinese partners and suppliers. Whether you fully understand the Chinese market and have the ability to leverage key resources, determines whether you will make a good start in the market, which leads to your determination to enter the Chinese market and the business strategies accordingly.
Finally, the efficiency of overseas companies' decision-making process in China is important. A fast and efficient decision-making process could be a key of success or failure. There’s obvious difference between the Chinese market and overseas markets, including cultural differences and consumption habits. Again, make sure you have someone who knows the market and culture very well to help in your decision making.
This market is not for the faint of heart and you need to make the right decisions at the right time with a full understanding of the market.
D: Is now a good time to enter the China market ?
V: China has a high demand for overseas products, especially with the rise of cross-border e-commerce, the imported food market has grown rapidly, and the market potential for coffee and snacks is particularly large.
On the other hand, overseas companies must be aware of the fierce competition in the China market. For example, while many overseas brands in food, beauty, health products and other fields have entered China, there are also new local brands emerging in China, forming fierce market competition. There has been huge impact on is foreign brands that entered the Chinese market early, such as Procter & Gamble, Unilever, and Byersdorf, whose market share is being eroded.
D: What’s changed when you go out now?
V: Personally, I have been traveling by car. The only differences are the need to bring protective equipment and keep a certain distance from people.
D: What’s changed at home?
V: I had enough time to adjust my living environment to be more comfortable and make the house work-friendly.
D: Are people still wary of the virus?
V: The management of community buildings in first-tier cities is still relatively intensive, as imported cases now occur every day. However, some people have begun to go out, and the impact of COVID-19 is gradually fading in China.
D: What is a big consumer trend you’ve seen?
V: E-commerce businesses have further increased their market share, online live streaming is more popular, and personalised products recommended by Wanghong (online celebrity) continue to emerge, which will have a strong impact on established companies. In addition, the state's stimulus to consumption has begun to take shape, and policies to stimulate automobile consumption will soon come to action.
If you are thinking of taking your products and services to China, but you’re not sure about how to proceed, speak to How Communications - our Director of China Marketing Doris Li can help.
We also offer free resources to help your business manage communications in a COVID-19 environment in Australia right now. Send us an email at email@example.com to access the complimentary information and we’ll get back to you shortly.