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Business cautiously resumes in China

Business cautiously resumes in China
Rush hour traffic this week in Guangzhou

Business cautiously resumes in China

China:

For Europeans and North Americans experiencing the early days of lockdown, a glimmer of light has been shone as China returns to work. The University of London’s Imperial College, which has been modelling the epidemic for the UK and other governments, points to success in controlling the spread of the virus in Wuhan, where Covid-19 originated from. We’ve asked some of our friends and contacts in China how business is faring for them as the country cautiously gets back to work.

The Beijing Metro this week as people go back to work
The Beijing Metro this week as people go back to work

Ruisheng, a distributor based in Guangzhou, was back in the office as early as 10 February, maintaining distancing from its clients. ‘We’ve organised quite a few remote training sessions for our dealers and it’s worked out well,’ says the company’s Stanley Yau. ‘Our Q1 business has no doubt been affected by the virus, especially the club and live market. Government projects started up again in March and our sales are gradually resuming. We are worried about the situation in Europe now, because most of our suppliers are from Europe, and, if they have to shut down, then we may not have enough products in the second half of the year. Our plan is to keep stable and steady this year and will base our stock on the demand of the customers.’

In Beijing, distributor DMT went back to work at the end of February. ‘We still ask the staff to avoid rush hour and have implemented day-on and day-off rotation, so it’s not completely resumed,’ said Ken Chang. Out of its three main business sectors – live sound, broadcasting and personal music – it’s no surprise to learn that live sound has been hit most severely, with broadcasting starting to pick up a little. Least affected of all is the personal music market as people stream content at home. ‘I think the live market needs to wait until the second half of the year to resume,’ adds Chang. ‘Though the situation in China is better now, it hasn’t resumed 100% and people are still isolated compared to before. I don’t think this will change for at least two months. The industry is going to face difficulties and reshuffles this year, but we are still optimistic because there are still a lot of infrastructure projects going on. Chinese government policy is supporting the industry, we have the 5G opportunity and we also expect the live market to rebound.’

Pro audio manufacturer SAE, based in Foshan, south China, officially went back to work on 2 March after a period of working from home. ‘The rate of attendance is now about 85%,’ says SAE’s founder, Bill Lee. ‘We’ve developed a complete system from protection and cleaning to quarantine according to government regulations, with a team to check and monitor whether all these methods have been implemented. If people were found not to be obeying the regulation, we would implement punishments from warning to penalties and even firing.

Traffic is slowly picking up in Beijing
Traffic is slowly picking up in Beijing

‘The factory is running steadily and normally after getting back to work and we can achieve our expected production goal. But our suppliers are not stable now; raw materials like semiconductors need a much longer lead time and the price has gone up sharply, which will greatly affect the new orders.’

Lee estimates that 90% of China is now out of lockdown as order is being restored, but the problems are now with overseas suppliers as they go into periods of instability. ‘We may try to find some reliable local Chinese supplier to replace the foreign suppliers until their situation is stable,’ he says. ‘We will also keep contacting our customers in both China and abroad to find new sales opportunities and prepare for growth in the second half of the year. We hope suppliers and customers can unite and help each other to get through this tough situation, and don’t pursue harsher supply terms or much higher prices. It is time to make our contribution to the future of our industry.’

In Shanghai, TOA China’s team worked from home for two weeks in mid-February, returning to the office later in the month and encouraging staff to commute in their own cars rather than take public transport. As the company couldn’t travel to put on marketing events, it has developed a series of online training for those working remotely, and is predicting that networking, plus intelligent, user-friendly products, will be big trends going forward.

And distributor Budee, headquartered in Beijing, is anticipating a return to work from 1 April. ‘Everyone is still working from home,’ says strategic alliance director, Mills Xu. ‘The most common dilemma facing most companies is cashflow. There’s been over two months without major revenue, but everyone still has to pay rent on offices and warehouses, plus salaries and insurance for our staff. But we are certainly not considering laying people off – we’ve given our employees many years of internal training and they have all contributed to who we are today.’ Xu is encouraged that the Chinese government has done its best to control the virus, and is now turning its attention to rebooting the economy.

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