Look east for lessons | Here is how Asian Companies adapted to Coronavirus

The novel coronavirus pandemic has been unfurling since late last year. Many governments brushed it under the rug and took cognizance of the situation when it was almost too late. The entire world is under lockdown barring the place where it originated. As we grapple with the situation, we should look at how some Asian companies adapted to coronavirus pandemic. 

China recently opened its state of Wuhan after a lockdown of 76 days. The affect on the economy along with the psyche of people is adverse, if one tries to describe the damage. Some enterprising entrepreneurs have successfully "thought outside the box" and adapted to the crisis. Let this act as an inspiration on how there is always a bright side to things and a lesson that having foresight can do wonders.

Making use of alternatives

Asian companies seemed to have adapted to Coronavirus to address the situation and aid in the repair and containment. China, in particular, acted smart and figured out strategies that would help them fight better. It was in late January when the they realised the impending doom and started taking measures to take the pandemic by its horn. 

So, when Liu Haili, the founder of the drone-maker Hydrogen Craft Corporation, analyzed the situation at hand, he understood the need to modify the business in accordance with the virus, in order to survive. Applying all brains to bring a practical solution to the table, the company initially advised the usage of drones for spraying disinfectant. Immediately after, they decided to use carts with ultraviolet C light that would be more effective for cleaning railway stations and airports. 

And even though the said carts were not their core products, they still acted as life-saving equipment for the company. Hydrogen Craft Corporation now expects to generate around 1.1 million dollars from this initiative, which will be sufficient to keep it afloat. 

All efforts to stay afloat

Another story comes in from a restaurant owner in Nanjing, Wu Zhenzhong, whose chain of seven fast food and barbecue restaurants were forced to shut down in the peak hours of the Lunar New Year holiday. To cope up with the situation, the restaurant decided to keep the previous year’s profits in the business and not pay them to its co-owners. The rent for two months was waived by Landlords and they offered future discounts as well. For the employees who were bound to stay in the city, free dormitory housing was provided with minimum wage pay.

The only businesses that witnessed a considerable increase in demand were associated with online grocery shopping. Catering to the demands of 1.4 billion people, all of whom were confined to their respective homes, JD.com recorded a year-on-year growth of 260 per cent in its online business of grocery, in the month of February alone. But even as the stats sound intriguing, a major hurdle for the store was to procure supplies amid the countrywide disruption of transport and distribution. 

Addressing this situation, Tang Yishen, the head of the department said that there were times when the suppliers couldn’t find any trucks so JD had to take matters in their own hands and had to send trucks to get supplies to their warehouses. 

Cash Appreciation

While countries adapted to Coronavirus, the lockdown had a drastic impact on multinational Asian companies. Samsung, the world’s largest producer of smartphones, screens and computer chips was coerced into shifting its factories offline, at home, which happened to be the case in the countries of India, Europe and Brazil too. The stores of Canada and the US were also closed until further notice. 

Hyundai, along with Kia, that is ranked as the fifth-largest carmaker of the world was also forced to close its plants across China and South Korea, facing the worst sales of the decade in February. 

But even though these factories are shut across Asia, a striking characteristic that has been buying time for such large-scale organisations is the appreciation of cash. Both the above-mentioned groups are rich in cash and have the strength to survive many quarters before they will be required to make serious adjustments to their respective companies.

Pertaining to this situation, an analyst Jeon Min Pak, said that having cash buffer does make a huge difference. This is even truer in the case of Japan, where, in the broad Topix index, 53 per cent of the stocks are net cash, excluding financials, in comparison to 13 per cent and 15 per cent of US and European stocks. 

Mr Smith from CLSA also noted that it was only weeks ago when investors were urging Japanese companies into buying more stocks from their excessive cash. But now those piles of cash are what are helping these Asian companies get adapted to Coronavirus and sail smoothly.