Coronavirus (COVID-19): latest updates from China

Jiong-Jiong Yu
Senior Retail Analyst
@RetailAnalysis

Date : 31 March 2020

Following the outbreak of Coronavirus (COVID-19) three months ago, retailers in China have responded with urgency and empathy as the situation evolves - we will continue to update this article with the latest developments...

Contactless delivery

  • Remote drop off: customers of all major retailers, including Walmart, Carrefour, Alibaba and JD.com,  can have their orders delivered touch-free by specifying where to drop the goods when they place orders using the App
  • Smart lockers: Shixing Fresh has set up smart lockers for fresh food delivery in selected residential areas. Each locker is a refrigerator that has different temperature settings to keep food fresh. Customers will be notified via SMS when goods are ready for collection
  • Drive-through for groceries: Sinopec started selling fresh vegetables at its petrol stations through its Easy Joy banner. There is no need for the customer to get out of the car or roll down the window. Staff put fresh vegetables and meat directly into the customer’s car boot
  • Smart vending machines: JD.com set up five smart vending machines. To make a purchase, customers need to scan the QR code on the cabinet door. The door will be opened for customers to take out the product. Payment will be made automatically once the door is closed

Hiring from other industry

  • Alibaba’s Freshippo launched “Sharing Staff Plan” on 3 February to hire staff from industry sectors, especially catering and restaurants, that have been severely affected by the outbreak
  • Walmart China issued a nationwide invitation to hire new staff to work at its stores. It also launched a "Joint Employment" project with caterers, hotels, KTVs to employ more than 9,000 part-timers as drivers and warehouse workers

Livestreaming becomes an important marketing tool

  • According to Alibaba, the number of orders generated using Taobao Live increased by 20% week-on-week in February
  • Tencent is adding a livestreaming function to its WeChat Mini Program
  • Many retailers are trialing livestreaming for the first time, with favorable results

Supporting staff, suppliers and consumers

  • Free delivery: eight Carrefour stores in Wuhan have been preparing thousands of “daily sets” in-store (fresh and necessities) and delivering them to local residential areas and hospitals. Orders are all managed through WeChat community groups and delivered by volunteers.
  • Rent reduction: to alleviate the pressure on merchants renting spaces in its member stores, Walmart China reduced management fees and rent by 50% during the peak of the epidemic (25 January to 8 February 2020).
  • Employee incentives: Walmart China spent more than CNY100m on protective equipment and provided employees with 40 disposable medical masks. In addition, the company has launched employee incentive plans, including transportation and accommodation support.
  • Access to information: JD.com set up an aid channel to transport donated goods to Wuhan. The retailer also launched digital initiatives to provide the latest COVID-19 updates using its query function and free-online health consultants
  • Fund for medical staff to support daily lives: Meituan set up a US$28.8m fund dedicated to caring for China’s medical staff. This has gone towards medical resources, supporting the daily lives of workers. The platform has also provided free takeaway meals and use of its shared bicycles to medical staff

Collaboration for the greater good

  • Collaborate to facilitate sale growth: JD.com worked with brands to provide CNY1.5 bn (US$212m) of promotional coupons to consumers in China. Coupons are designed to generate demand that may have been suppressed by the epidemic, helping brands and merchants to resume sales and operations, facilitating economic growth
  • Collaborate with well-known restaurants: Walmart launched a range of premium ready-to-eat signature dishes online, in collaboration with more than 30 famous restaurants in China. The dishes can be easily heated at home, meeting shoppers’ needs for convenience and quality
  • Collaborate to ensure supply: Affected by the pandemic, agricultural products have not been able to reach the market in time. To help solve this, Walmart adjusted its supply chain and sourced goods directly from local famers. This localised sourcing not only helps save tons of products that otherwise would have  become unsalable, it also helps keep prices low and stable

On the road of recovery

By end of March, China has no new infections of the coronavirus domestically for the first time since the start of the crisis. The country is working to return to a state approaching normalcy.

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