How Chinese Firms Successfully Manage the Corona Crisis

The Corona (Covid-19) outbreak is affecting many countries and continents, including Europe, Asia and China.  We can say that many countries have been caught unprepared for this epidemic since there has not been such a serious situation in the world for many years.

Of course, every country has its own conditions. But if we look at the issue in terms of business life, the first shock in China, the country where the virus has spread, has been overcome. In other words, many companies based in China have overcome the crisis situation and started to stand up and recover.

In this article, we will look at what businesses in China are doing to overcome this crisis and we will consider the measures you can take as a business owner.

1. Conduct a Continuous Situation Assessment

How Chinese Firms Successfully Manage the Corona Crisis

By definition, crisis means a dynamic process. In times of crisis, which is a dynamic process, you should constantly review your mental models and plans. The initial ignorance and unplannedness thus leaves him to understand the situation, then plan, act strategically, stand up and ultimately learn from the situation. This process should be as fast as possible. So the business owner, CEO, general manager etc. – the most authoritative name of the company – should take the situation in person and not go into unnecessary cumbersome processes.

When we look at the companies that are fighting the effects of the corona epidemic in China the fastest, we can see that strategic moves have been made. For example, in the early days of the epidemic, the beverage company Master Kong analyzed the effects of the epidemic every day and ranked the company’s priority accordingly. The company, which has detected a trend like hoarding and black market, focused on e-commerce rather than retail sales. Thus, he could easily see the amount of sales through e-commerce sites and more clearly observed the amount of products to be offered to the market. As a result, it brought the supply chain back under control only a few weeks after the epidemic increased its severity. This enabled him to increase his market share three times more than his competitors when he started selling to supermarkets again.

2. Take a Flexible Approach


A fast and coordinated action plan is only at the will of the top staff. However, it is possible to be flexible against unpredictable situations by taking the initiative of individuals. Some Chinese companies have adopted a management-staffed approach by blending both senior management support and staff responsibility.


Operating more than 6000 hotels in 400 cities in China, Huazhu has prepared a daily action plan on crisis management under the guidance of senior staff. In addition, the company, which increased the internal communication to a maximum level with an application called Huatong, thus enabled both employees and business partners of the company to be aware of the current situation. Sub-firms that dealt with the company were also able to act optimally, adapting the instructions from the Huazhu center to local conditions.

3. Inform Your Employees Regularly

In the crisis environment, the information flow constantly changes. Official statements may not be made in a timely manner or opposite statements may confuse people. Moreover, different statements in the media can cause confusion. In this respect, employees need a clear flow of information and instruction in order for a company to continue its activities in the event of a crisis.

Some Chinese companies have implemented this system very well for their employees. For example, Supor, one of the largest kitchenware manufacturers in China, made very clear and specific explanations for how the company should operate in the crisis period. Preparing a detailed directive from how to eat lunch within the company to how to evacuate an employee with a potential Corona virus, the company also took measures for the families of the employees. This enabled both employees and their families to be in a healthier environment. As a result, the company started production again in the second week of February.

4. Reorganize Task Distribution

How Chinese Firms Successfully Manage the Corona Crisis

In businesses that are directly affected by epidemic periods such as restaurants, staff cannot continue their daily work. But in such a situation, instead of firing, some Chinese businesses gave their employees different tasks. Some of the existing personnel were even transferred to other companies temporarily.

For example, more than 40 cinema, hotel and restaurant chain employees have temporarily sent their employees to Hema, a new retail chain of Alibaba. Because the newly established Hema needed urgent personnel. In other words, instead of firing your staff, you can give them temporary duties in different companies or you can have them work in different departments within the company.

5. Focus on E-commerce


If you have a store or shop in a shopping mall or on the street, you will be directly affected by a virus outbreak such as Korona. Because people don’t want to leave the house and shop at a store.

Cosmetics company Lin Qingxuan closed 40% of its stores in Wuhan in the past 2 months. However, more than 100 cosmetic specialists working in these stores enabled the staff to work on the internet. In other words, the personnel whose job was suspended in the store were given the task of marketing on the internet. As a result, the amount of sales in Corona epidemic in central Wuhan increased by 2 times compared to last year!

6. Use Social Media for Coordination

Due to the difficulties of home working and epidemic coordination, many Chinese companies provide internal communication using their social media platforms.

For example, Cosmo Lady, China’s largest underwear company, sent instructions to its employees to increase sales through WeChat. All employees, including the company’s CEO, were told to actively market at WeChat.

7. Make a Recovery Plan

Only 6 weeks after the first Corona case, China began to overcome the crisis. There is currently a 27% loss compared to the same period of 2019. In other words, the circulation of products and people continues, there is vitality in the economy. Similarly, carbon emissions have decreased by only 25% compared to the same period of 2019. So production has not stopped. The real estate market also came to a halt in the first days of the crisis, but it has now reached 47%.

Even if the future seems uncertain in other countries and economies, China’s process is showing something important. Even when the crisis begins and continues, a plan for recovery and flattening should be made.

For example, a luxury China-based travel agency was about to sink in the short term. However, focusing on long-term preparations, the company instructed its existing staff to work more selflessly, find more customers, and the company managed to survive in this difficult process.

8. Act According to Your Industry

The speed of overcoming the crisis in different sectors and different markets will also be different. In the first 2 weeks of the epidemic in China, there was a sharp decline in all markets, but the software, health and service sectors came to their attention within 2 days. Transportation, retail and energy sectors have improved only 5% since the crisis period and at least they are not very promising for now.

This means: Every company needs to adapt to its industry. For example, a major global food company is using this crisis to change its product range in China, increasing its healthy product options and improving its online sales channels.

9. Follow Opportunities

Even if the corona epidemic negatively affected almost all sectors in China, demand has increased considerably in some sectors. For example, hygiene and healthcare products, e-commerce between businesses, remote communication services, and social media are the economically profitable sectors of this epidemic. For example, the video platform valued at $ 28 billion, called Kuoishou, has begun offering online education for schools and universities. Thanks to this initiative, which is also supported by the Chinese Ministry of Education, it has been moved to the educational video medium across the country. Another chain of restaurants started to offer the products ready to cook at home. People who are under quarantine at home can cook and consume food from the restaurant in their own home.

10. Develop Regional Strategy


Regional public health policies, epidemic dynamics and administrative consultancy services can offer solutions tailored to each region’s own circumstances.

For example, one of the most important dairy companies in China has moved its production in the regions heavily affected by the crisis to less affected areas. Again, marketing campaigns, advertising and budget management were reorganized in line with regional differences, customer demand and speed.

11. Respond to New Needs


New needs arise in times of crisis and epidemic. This gives companies an important opportunity to innovate. In this process, many Chinese companies were able to take the opportunity out of the crisis.

The insurance industry is a sector with strict rules almost anywhere in the world. However, as a result of the Corona crisis, Ant Financial firm added a new type of insurance related to corona to its insurance coverage. The company’s 30 percent increase in health insurance revenues in February shows that this is effective.

12. Identify New Consumption Habits


If the corona outbreak ends worldwide, even if the danger passes, many things will not be the same anymore. For example, SARS disease, which was also derived in China in the past years, has contributed greatly to the development of e-commerce in China. How does the post-corona process work, it is difficult to predict for now, but we can see for sure that online education, the health supplies distribution system will undergo a radical change.

Some Chinese companies have already started this change. For example, a Chinese global confectionery company has accelerated its digital transformation. The company moved its meeting-based events organized for Valentine’s Day to digital media.


So we can talk about something like a new world order after the Corona epidemic. What this crisis shows us for now is that in such a global and uncertain environment, flexible approaches have gained more importance than ever in business life.

Get well soon!

Leave a Comment