COVID-19 opens up new frontiers for firms
BEIJING (China Daily/ANN) - Businesses adjust strategies to survive setbacks brought about by the virus
Struggling to mitigate the economic fallout from the coronavirus outbreak, some Hong Kong companies operating on the Chinese mainland have adopted proactive strategies to offset heavy losses and keep their businesses afloat.
The abrupt disruption to their operations has inspired many to rethink development plans and explore new products and market channels, but experts have warned of the long-term risks of steering toward a new direction.
M Visioner — a virtual reality application tech enterprise based in Shenzhen — is among those bruised by the outbreak. Its chief executive officer, Hong Kong entrepreneur Ronald Tse Chi-hang, said the company’s main product is a VR-based system for surgery, but mainland hospitals have seen their budgets dry up, having spent substantially more on protective gear for their employees to ward off the disease.
Anticipating sharp falls in revenues in the first quarter of this year, Tse spotted a new opportunity and wasted no time getting around the company’s tumbling fortunes.
As part of efforts to detect suspected cases of the novel coronavirus, the entrances of public places, including residential communities, public buildings, and transportation and commercial complexes, are manned to keep a tab on people’s body temperatures. The demand for convenient, accurate and large-scale temperature-checking devices grew as more companies and factories resumed operations in mid-February.
M Visioner was quick off the mark as it raced against time, trying to come up with an intelligent body-temperature checking system using facial recognition technology that can detect a person’s temperature within a range of 2 meters from a terminal device and send the data to a cloud management system.
According to Tse, it takes just three seconds to check a person’s temperature even if he or she is wearing a mask, and any potential error is limited to within 0.3 C.
The entrepreneur, a doctor who graduated from the Chinese University of Hong Kong, said he had not left his Shenzhen office in five days in order to develop and put the new product on the market as soon as possible.
So far, the startup has received more than 500 orders for the device from clients like operators of commercial buildings and schools.
Jens Ewert, head of Life Science and Health Care Industry at Deloitte China, said he expects the demand for medical intelligent devices and software embedded with artificial intelligence, 5G and cloud technology to surge over a long period.
He believes the government will systematically improve the prevention and control systems for contagious diseases, especially its early warning and standing prevention capabilities across the country, after the outbreak.
He said new enterprises that can fit into the upgrading of the healthcare system to better prevent and make an early response deserve investment and to be included in a company’s long-term strategies.
AI-based clinical monitoring and diagnose support tools, in particular, will get more attention, given the fact that the system is still short of well-educated healthcare professionals, he said.
But, in his view, professional healthcare solutions are unable to be sustained without a deep-rooted analysis and long-term solution planning, especially for newcomers to the medical sector.
Besides the medical industry, enterprises in other sectors are also striving to combat the negative impact on business from the coronavirus.
Team Green — an eco-friendly design product brand of Hong Kong-based printing company Starlite Holdings — has also found a solution, using e-commerce on social media to cushion the economic losses.
“We’ve opened new sales channels on social media, such as WeChat stores, and promoted first-level distributor applications through WeChat Moment this month,” said He Jianzhu, manager of Team Green’s Shenzhen branch.
“With these measures, our sales volume at the end of February had gone up, compared with the beginning of the month,” he said. He thinks it’s an effective solution and the company will continue to promote online channels after the outbreak is over.
In addition, Team Green is exploring new products, but sales have yet to improve as factories have not returned to full capacity with delivery firms under increased pressure.
The company’s factory is gradually resuming operations, and a complete resumption of work is likely by the end of this month.
“The outbreak is a great challenge for us, but it has given us a chance to rethink our future and grow more steadily. We plan to continue expanding our internet platform, improving digital management and information sharing, and enhancing our supply chain model,” He said.
In the financial sector, the outbreak has pushed banks to speed up their digital transformation.
Last month, the digital bank of Hang Seng Bank (China) accounted for 98 percent of its total trading, while the ratio of retail and wealth management product sales on the online platform soared to record highs.
The trading volume of the bank’s fund product online boomed by 176 percent in February, compared with its monthly average.
“Our investment in the digital bank has had a remarkable effect during the coronavirus outbreak, and we’ll strengthen resources to further develop in that direction and promote online services of retail banks and wealth management as the ‘new normal’,” said Judy Qin, the bank’s deputy chief executive and head of Hang Seng Bank’s retail banking and wealth management division.
Last year, the bank gained access to the central bank’s internet banking payment system and launched payment, wealth management and loan products to mobile application.
In the future, the financial institution plans to set up online direct bank platforms to enable investors to open accounts without having to show up at offline banks. In addition, it plans to launch a customized fund account on its digital bank and augment its functions, providing comparison, information inquiries, and investment consultant services.
While online channels can certainly grow the market and are necessary to cash out products in stock, what’s more important is to strengthen research and development of a company’s hot product and focus on its key business direction, said Cao Zhongxiong, executive director of New Economy Research Center at the China Development Institute, a Shenzhen-based think tank.
But he warned of the risks of blindly rushing into a new avenue, with excessive equipment capacity and materials to fight the virus after the outbreak.