Coronavirus - How Does It Affect People and Businesses in China?

Sat, 02/01/2020 - 17:30
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It's Wiki here, reporting on-the-ground. Although the virus outbreak and the situation in China are severe (no doubt about that) it is quite different from what different media outlets may say. One of the best sources to follow for the latest and most reliable news is the Guardian - here (in English).

Trust me, I have received way too many panicky messages from my family who have read fake news on European platforms who blindly follow fake news from China. The amount of misinformation circulating on social media in and outside of China is insane. China’s Watchdog is working hard to censor the amount of false information being spread, closing down WeChat groups and detaining people who are accused of distributing false information. However, many people also distrust the government saying that they have failed to handle the situation well, and draw parallels between the coronavirus outbreak and Chernobyl, underlining the importance of the free flow of information and news. Read more (English)

As people are stuck at home and most public places are shut down, “boredom” has become a national trending topic and there has been a huge in spike in the amount of activity on social media. Over 6 million people have been watching the live construction of Wuhan’s new “built-in-ten-days” hospital (broadcasted live via 5G technology), giving nicknames to the excavators working on the ground. The audience can even "encourage" their favourite excavator, sending them "motivational points" (动力值).

Users motivating excavators in Wuhan with points

As movie premieres planned for Chinese New Year are being delayed as well, Byte Dance also purchased rights to broadcast a movie "Lost in Russia (囧妈)" on its four apps: Douyin, Today's Headlines, Xigua Video and Huoshan (source in Chinese). It was broadcast 600 million times by 180 million people in just 3 days. Bored netizens also take to Douyin, publishing videos tagged as "Staying at home to support the society (在家躺着为社会做贡献)" and "Travelling at home (在家旅个游)" fighting off the boredom by finding creative and amusing ways to parody conventional travel vlogs from the boundaries of their apartments. - View them herehere and here.

"Travel at home" trending on Douyin amid coronavirus outbreak

Jokes and fun aside though. The truth is that the coronavirus outbreak is affecting everyone. Businesses are shutting down, the public holiday has been prolonged by over a week, some cities are completely cut off and most airlines have cancelled their flights to and from China.  Universities have postponed the spring semester, public events have been cancelled, and the international community is advised to cancel their visits to China as well. Nationally and internationally, this will have a long-term effect on economy and tourism. On a social level, there have been an increasing number of incidents where Chinese citizens have faced racism abroad amid the virus outbreak.

What does it mean for international businesses in China? For our PPC campaigns, for example, we are testing the ground. Our SEM team is watching them closely and temporarily suspend ads that do not bring expected results due to the social interest shifting towards the virus, as well as for the services that cannot be offered due to travel restrictions. Content marketing should be ongoing. Many of our projects are about engaging with users in the long-term. They're probably on their phones and computers more than usual now, aren't they?

However, industry-to-industry, we should see a variation. For instance, selling flight tickets now? Won't work well. But selling visas to parents that are now planning to go to the USA a few months later? Maybe a hot item. That's why it makes sense to test the ground and not stop campaigns right away. Think long-term, act short-term.

Businesses and factories will be affected directly as everything has been shut down. Wuhan is considered a key transport, logistics, and auto-production hub, and more than 300 companies of the Fortune 500 had operations within the city in 2019. Industries related to household spending: catering, entertainment, and travel will be affected the most in the short-term. However, considering that China's economy has already shown signs of slowing down recently, it is expected to take a significant hit in the long-term due to the coronavirus outbreak. - Read more (in English)

Looking at the situation in 2003, the global cost of the SARS outbreak was over 40 billion USD. Sixteen years later, considering how much stronger China's global position has become, I anticipate the overall cost to be higher than that. Actually, it has already cost China's catering, movie and tourism industries approx. 144 million USD - just during Chinese New Year's 7-day holiday.

Corona beer meme amid the coronavirus outbreak
One of many memes circulating online (author unknown)

The coronavirus may have at least one unexpected outcome though. Due to the government's order for offices to remain closed until further notice, many internet giants such as Baidu, Tencent and Alibaba have to adapt to the international trend of working remotely or "home office". Until now, they wouldn't allow employees to work from home because they wanted to monitor their performance and attendance every minute of every day (including fingerprint clocking-in). At the same time, Suning and Tencent are racing to develop online office and file-sharing software and platforms - and share them with others for free.

For our office this is not anything new.  At NMG we are allowed to work from home, and we’ll continue to do so until it is safe to return to the office. We've already seen some of our Chinese partners adopt the work-from-home approach over the last week as it allows them to soften the impact of the virus outbreak on their company's economy. We expect more companies to follow suit over the coming weeks.

Another interesting development is that although the winter holiday has been extended in Chinese schools, it doesn't mean a real break for Chinese students! Parents, who are worried their children will fall into the game addiction, are signing their children up for online classes. Some schools have started online classes that students can attend from home to prevent them from falling behind. Moreover, educational platforms are also keen on drawing more users to their classes. NetEase, Tencent and New Oriental have rolled out free live classes, especially targeting Wuhan and the province of Hubei. Netease's class had 140,000 signups within a day!

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