Coronavirus learnings from China: Shift your sales channel mix

Naturally when Covid-19 reached its peak in China, person-to-person retail was severely restricted in affected regions. Reacting to this, agile Chinese retailers rapidly redeployed sales efforts to new channels.

Cosmetics company, Lin Qingxuan was forced to close 40% of its stores during the crisis, including all of its locations in Wuhan. In order to keep sales coming in and to continue to reach customers, the company redeployed over 100 of its beauty advisors from those stores to become online influencers. They were able to leverage digital tools, such as WeChat, to engage customers virtually and drive online sales. As a result, its sales in Wuhan achieved 200% growth compared to the prior year’s sales.

The power of social media to coordinate employees and partners

With remote working and a new set of complex coordination challenges, many Chinese companies took to social media platforms, such as WeChat, to coordinate employees and partners.

For example, Cosmo Lady, the largest underwear and lingerie company in China, initiated a project aimed at increasing its sales through WeChat, enlisting employees to promote to their social circles. The company created a sales ranking among all employees (including both the chairman and CEO), helping motivate the rest of the staff to participate in the initiative.

Online maturity has helped China

Of course Chinese consumers are already far more comfortable with online commerce than the rest of the global market, and retailers are ahead of the game.  In the past five years, the likes of Alibaba Group, JD.com, and others have transformed the purchasing behaviour of Chinese consumers, moving them away from bricks-and-mortar shopping into online spaces, often consolidated through super apps such as WeChat.

As of 2019, China’s e-commerce penetration had, by one estimate, reached 36.6% of retail sales, with 71% of Chinese consumers transacting online at some point, mostly via smartphone apps (80% of e-commerce transactions).

Digital transformation now to be ready for the next pandemic

The Harvard Business Review notes: “Of course, the pandemic will subside – and Americans and Europeans will find ways to cope with its effects; the Chinese do not have a monopoly on creativity and solidarity.  But as the US and Europe emerge from the coronavirus epidemic, their governments, cities, and businesses should look at how China’s digital advantages have helped it respond to the logistic challenges presented by the crisis. Covid 19 is a wakeup call for European and the US, which both need to accelerate the digital transformation of their economies — ahead of the next pandemic.”

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