Updated: Feb 21, 2020
It’s been 11 days since the Chinese New Year holiday has been extended. Taking the city of Shanghai as an example, most companies have allowed employees to work from home starting on February 10th, but any employee who returned from other cities should follow self-isolation for 14 days. For factories and service industries, things are not so “lucky” because business still stays closed. While local governments are speeding up issuing policies to help SMEs to overcome the epidemic period, the disruption of business is so severe, especially for food & beverage industry. A few business owners are crying out that most of their cash flow isn’t enough to pay employees’ salaries and restaurant rents for 3 months.
In the meantime, the online and offline supermarket brand Hema (盒马), an affiliate to Alibaba group (BABA, NYSE), has only 70% employees of their full-time capacity during Chinese spring festival. Due to the outbreak of COVID-19, their online ordering exceeded 3 times than the usual demand before Chinese New Year. The delivery has heavily slowed down because of lacking human resources.
Shared Employees: A new trend of Gig Economy?
Such situation is consistent across other Chinese E-commerce platforms and restaurants. The once unknown manpower platform Bluesea (蓝海), affiliate to food delivery company Eleme who got acquired also by Alibaba group, announced that they will bridge the resource gap between Hema and those restaurants who have available employees to share.
Manpower share isn’t a new concept in the global market, usually it’s a third-party service company providing temporary employees to companies. However, in the case of COVID-19 outbreak in China, to share employees directly between E-commerce platforms and restaurants is something creative in the landscape of “gig economy”. According to Mr. Jia, owner of a famous Chinese north-west style restaurant chain Xibei, 1000 employees of Xibei will be temporarily lent to Hema and work on their delivery service line. Soon companies such as Walmart, JD.com, Lenovo also followed the steps of Hema, collaborating with a few food & beverages companies to solve the similar shortage of human resources.
However, the great innovation has never set foot in the Chinese market before, challenges like the safety and health of employees during the secondment period, what insurance products should be purchased, wage settlement between 2 companies, on-board training, licenses for special positions, etc. are growing at the same time. China isn’t the place that will slow down the implementation before figuring out all the answers. Whether manpower share economy will actually survive the COVID-19 period and become BAU is something interesting to keep an eye on.
Spring of Online meeting and online education have arrived in China!
According to our database, there’re more than 1000 companies having donated cash, goods to Hubei and other provinces, where over 55% of companies chose to donate money, 38% of companies chose to donate goods, mainly with medical supplies and foods. It’s worth to note that 4% of companies chose to provide services instead, such as airlines and logistic companies helped sending goods to Hubei provinces, data and information providers such as Bloomberg provide special data access terms during the epidemic period, and other cloud service companies open free licenses to users.
As mentioned earlier, companies are allowed to work from home since the week of February 10th, but most Chinese companies aren’t geared up with remote working tools. Thus, online meeting service providers such as Dingding from Alibaba, Feishu from Bytedance and other remote meeting tools have released new policies of giving free trails during the epidemic period or for even longer period. It’s funny to see that products like Dingding and Feishu have provided option of using beauty camera inside the application, which is mainly designed for the Chinese market to allow employees who work from home be more “presentable”.
The Hong Kong listed hot pot company Haidilao (6862, HKSE) also suffered from the COVID-19 outbreak, even with 2 customers reported as confirmed with COVID-19 in one of its restaurants in Changzhou, Jiangsu province. Based on a rough estimate, Haidilao could have lost 0.7 billion RMB in the first 9 days of partly closure. Haidilao, unlike restaurants outside of China, take care of accommodation of most of their employees in China. It might be difficult for outsiders to imagine their lifestyle and company’s culture, but Haidilao is famous for their internal cohesiveness and service level. Haidilao has arranged full day schedule for employees including time to measure employee’s temperatures, online training courses, sport exercises etc. during the epidemic period.
Contactless service: no touch, no virus!
Another concept “Contactless service” become buzz word lately inside of China. Again, Alibaba has built up an unmanned supermarket in one of the hospitals in Wuhan, Hubei provinces. It’s very much like Amazon Go, but instead of using actual NFC contactless payment technology, it uses Alipay’s QR code to complete payment.
“Contactless service” also appeared on many food delivery service platforms. As delivery men interact with dozens or even hundred of people on a daily basis, to protect their health and safety and customers require platforms to react quickly. Meituan (MPNGF, OTC MKTS), a Beijing based food delivery company became the leader in the market. First of all, all their delivery men are required to wear mask and gloves; secondly there’s an option in the application to tick the box “require contactless service”. If customers choose this option, the delivery men will leave the food in front of the door with a text message notice. But the governmental policy has changed quickly for some cities, delivery men are no longer allowed to enter compounds to deliver goods and food, residents have to pick up at the compound gate.
(Written by Yiwen He)
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