Every cloud has a silver lining as many Shanghai companies have been discovering when their business models were put to the test by the novel coronavirus epidemic.
Yicai Global visited several in Shanghai’s Songjiang district yesterday to learn how they were able to mitigate the disease’s impact on them and find new ways to survive.
Left Pocket Studio, known for its cartoon programming for kids and its collaborations with US entertainment giant Walt Disney and Chinese video hosting service Youku, has had several overseas projects postponed because of Covid-19, said General Manager Yu Xin.
With 90 staff, it has had to quickly devise a new strategy to find other sources of income. As a result, it has brought forward many short- and medium-term projects to replace the medium- and long-term projects it already had in place, he said.
The studio has decided to develop popular science animations targeting children who are studying from home now that many schools have closed due to the pandemic. It also plans to team up with several manufacturers to make masks and other products based on these cartoon characters to sell to the kids, Yu said.
“Our staff were able in a short period of time to complete 40 six-minute episodes of popular science animations which are now available on Youku’s kids channel,” Yu said. Other projects such as science laboratories and drawing lessons are also in development.
“The company needs to try out new business models and develop new content to take advantage of the emerging opportunities being presented by the epidemic and to survive the hard times,” Yu said.
Haisu Food, which supplies frozen meals to airlines and five-star hotels as well as operating its own local food outlets, has also been hard hit by the epidemic. It has had to close most of its stores and the majority of its clients are in sectors that have also been badly affected.
Haisu’s sales dived once the epidemic started, said General Manager Cao Zhehui. As a result, it turned to e-commerce to boost turnover and began to co-operate with well-known online fresh food marketplaces as well as trying out live-streaming to promote its products.
“All of our frozen dimsum dumplings are available on online platform Youcai and 80 percent of our staff are now back at work,” he added. Many of the firm’s direct-sales outlets have also resumed operations, he said. The firm employs around 100 people.
The company has not had any problems with cash flow so far as it has been able to benefit from government support for small and medium-sized firms, he said.
Huitian New Materials, a leading industrial adhesives and sealants supplier, has also been forced to look for new opportunities. Through its parent firm, Hubei Huitian Adhesive Enterprise based in Wuhan, it was able to provide raw materials and other supplies to the emergency field hospitals and ambulances being built in the contagion’s epicenter.
It has also quickly seized the opportunity presented by the spread of the virus overseas to expand its services into countries where business has been frozen and to hire foreign talent, Chairman Zhang Feng told Yicai Global. The firm’s production plants are all now back in full swing.
“Competition in the adhesive sector is quite fierce,” Zhang said. But the pandemic can also be seen as an opportunity for growth that is unlikely to ever be seen again.
The firm previously competed with several foreign-backed manufacturers for market share. Now there is huge space for expansion. And the price of upstream materials has also dropped due to the difficulties in exporting them, which is also good news for the firm, he added.
Huitian New Materials has survived the hardest times and its growth this year may be better than expected, for the market will stabilize further post-pandemic, Zhang added. First-quarter net profit could increase from a year earlier by as much as 10 percent, according to the company’s performance predictions released on March 31.
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