Coronavirus

What Will Business Look Like Post COVID-19? Ask China

What Will Business Look Like Post COVID-19?

Though the phrase “new normal” has gotten thrown around a lot lately, in many ways it is something of a misnomer. Here on the ground in the U.S., things are very far from normal – new or otherwise – with businesses closed, employees working remotely and people sequestered in their homes for at least the next month. Consumers are concerned for their futures – both health-wise and economically – and over a quarter of American small businesses don't think at this point that they will reopen.

As PingPong Co-founder and Chief Business Officer Ning Wang told Karen Webster in a recent conversation, a problem that once looked like a crisis that was local to China and limited to a “supply-side story about factories and sellers” has now blossomed into a global geopolitical story affecting nearly everyone, everywhere. Making grand predictions about the future is premature, he noted, since the story (as well as the global response) is still taking shape.

“I think people are still in shock, and when people are in shock, they either do nothing or they go crazy and run around and try to do everything at once,” Wang noted. “People are mostly reacting instead of thinking like a team and focusing on coordinated and even proactive steps.”

That has to stop, he warned, because neither frozen nor frenetic people are terribly useful in mitigating a crisis. But that reactive phase will end, an experience Wang had firsthand while living and working in China during the earliest days of the COVID-19 outbreak, as he watched it progress through the peak and back toward something like a “new normal.” The rest of the world will get there, too, he noted – and a post-COVID-19 world will be actively under construction.

A world that will be different from today’s in some ways, he noted – but quite possibly a bit better.

China on the Other Side of the Curve

As infection rates have fallen in China and real progress has been made in extinguishing the outbreak, Wang told Webster, signs of normalcy are returning. People have been back at work for about a month, the factories are spinning up again, restaurants are re-opening (with strict capacity caps) and life, on the whole, is coming out of stasis – albeit slowly and very carefully.

The China Aviation Authority has said all airlines flying to and in China, for example, cannot be more than 75 percent full, and are legally liable if they are home to another outbreak. Restrictions on movement may soon be back in effect, said Wang, as Chinese nationals are repatriating from parts of the world where COVID-19 is on an upswing, not a downswing, and there is a concern about them re-igniting another wave of outbreaks. Movie theaters and karaoke bars remain closed, and karaoke may in fact simply be a dead art form in China moving forward.

“Karaoke may never come back because of what it is,” Wang noted. “People exchanging a microphone they hold close to their mouth in a closed space – it is an excellent place to spread disease.” In fact, he added, it might be a while before consumers desire to be in large crowds for anything but very pressing reasons, with anxiety lingering from the last few weeks.

But, Wang noted, many things have also rapidly leveled up in the face of COVID-19, such as grocery delivery. The high-speed rail infrastructure present in China, combined with the eCommerce infrastructure built by players like Alibaba, have rapidly made online grocery delivery the fastest, cheapest and easiest option for Chinese consumers – and Wang expects that new commerce habit will stick. Plus, he noted, people's home cooking skills have improved during the crisis.

Those changes – and others that are continuing to emerge – are pushing China’s suppliers and supply chain players at a time when everyone is facing challenges.

“On the supplier side, it's pretty clear there is a struggle for survival, and the priority right now is taking care of people,” Wang said. “Some of the factories are not back online because of lack of workers or lack of demand, depending on what region they are in.” He pointed out that there has been a lot of repurposing, rethinking and pivoting to reapply skill sets in new contexts. One example is all of the firms that have flipped to making medical masks almost overnight.

But, Wang noted, some players will lose, because they will be unable to recover. But the global markets will recover – and might even become stronger than ever.

Anticipating the Real ‘New Normal’

Because the world is still more reacting to COVID-19 than working in concert to combat it, it is hard to make predictions, positive or negative, about what will come next. The data is still coming in and changing the picture by the day. But what is apparent, said Wang, is the scale of movement that the crisis has unlocked. The U.S. has voted for $2 trillion in stimulus disbursements to help the economy ride out the infection wave. Although the country has the largest economy on Earth, its actions are being mirrored at various scales worldwide.

If those entities can work together, they might be able to find better ideas for running the global supply chain, so that black swan events don't have the capacity to roll up the sidewalk on global commerce at the drop of a dime. This could mark a new beginning of the era of globalization – and perhaps a smarter, more balanced one.

While some firms will lose, Wang said, he learned while working at PayPal in 2008 (during the last crisis) that not every firm will lose. Some will find they are uniquely able to respond to the demands of the time, and from that position will rise to the top – and bring an awful of helpful innovation along with them.

“Even in the most broken situation, there are people who actually come up with great businesses – and I am certain we will see that when the dust clears,” he predicted.

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NEW PYMNTS STUDY: LEVERAGING THE DIGITAL BANKING SHIFT – SEPTEMBER 2020  

The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.

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