Companies, individuals adopt different strategies to tackle the new challenges
Production resumes at a cycle factory in Changli, Hebei province, which employs more than 1,200 local people. (YANG SHIYAO / XINHUA)
In early March, when most businesses in China had yet to fully resume operations, Zhou Yiyan received inquiries from leading property developer Vanke.
The company wanted suggestions for improving the design of its showrooms, so that more space could be provided for disinfection products. It requested the information amid the novel coronavirus pandemic, which has changed mindsets and habits.
Zhou, the founder of Yi Organizer, a studio dedicated to decluttering, or better home organization, said, “Property developers are now attaching more importance to customers’ health-related demands as people begin to think about storage space for epidemic-prevention products.”
Zhou, who was born in Shanghai in 1984, has worked in this emerging industry for five years. Her studio has received three requests for similar consultations so far this year, compared with two in the second half of last year.
“Our overall business has grown since the COVID-19 outbreak, and we want to focus more on consultation work with real estate companies, but professional home organizers are under huge pressure, and a number of such jobs have been lost due to the outbreak,” Zhou said.
Her studio also has an online training program for home organizers, but this business has fallen 20 percent during the pandemic, which has had a significant impact on the economy, especially employment.
Although no target has been set for economic growth in this year’s Government Work Report, there is a clear and specific aim for employment: creating more than 9 million new urban jobs; a surveyed urban unemployment rate of about 6 percent; and a registered urban unemployment rate of around 5.5 percent.
Premier Li Keqiang, delivering the Government Work Report at the opening of the third session of the 13th National People’s Congress on May 22, said: “All local governments need to overhaul or rescind excessive restrictions on employment, and adopt all possible measures to bolster employment.”
Statistics from the Ministry of Human Resources and Social Security show that the registered unemployment rate at the end of last year was 3.62 percent, with an additional 13 million jobs created in urban areas.
A worker inspects yarn at a textile factory in Qutang town, Haian city, Jiangsu province, which provides jobs for locals. (ZHAI HUIYONG / FOR CHINA DAILY)
Zeng Xiangquan, director of the China Institute for Employment Research at Renmin University of China in Beijing, said: “The short-term shock produced by COVID-19 has increased pressure on the Chinese job market, but opportunities often go hand in hand with challenges. Opportunities can be anticipated in areas such as flexible employment, information sharing, targeted talent training, new technological changes and the booming digital economy.”
In Zhou’s case, although some of the students participating in the online program at her studio had earlier lost their jobs, most of them have found ways to survive.
“For instance, one of them is learning psychology, especially positive discipline, so she can help accompany clients’ children, and some of them are trying to give clients fashion tips through online platforms,” Zhou said.
She is just one of millions of people striving to restructure their businesses as a result of the pandemic.
Sun Mingze, who was born in 1979, used to work in the information technology sector. He had a schedule dubbed “996” — toiling from 9 am to 9 pm, six days a week. However, after working in Beijing for two decades, he had saved enough to start his own business.
After spending more than six months investigating the catering sector in the city, Sun and several other investors opened three medium-sized restaurants last year named Daddy Shrimp. The outlets served different-flavored crayfish. Investment in the business, which mainly went on rent and decoration work, exceeded 3 million yuan (US$420,600).
Just as the venture was about to break even, the COVID-19 outbreak emerged, forcing two of the restaurants to close due to high labor and rental costs.
Sun said: “The monthly rent for our 450-square-meter restaurant close to Jianxiang bridge on the northeast Third Ring Road is more than 80,000 yuan. We need to pay six months’ rent in advance, plus an extra month’s as the mortgage.
“At peak times, we have 14 staff members, and the annual cost of running the restaurant is more than 1.2 million yuan. Although we’ve been given a one-month rent exemption due to the pandemic, we are still finding it hard to survive.”
A job fair offering 3,000 vacancies was held last week in Haian. (GU HUAXIA / FOR CHINA DAILY)
However, Sun has not given up, and since March he has been trying different forms of catering, starting in the community where he lives.
“We set up a platform on WeChat for residents in the community, and I made inquiries about delivering popular fast food such as spicy crayfish and lamb spine to neighbors. The platform organizer agreed, saying this would give people more choice than merely cooking at home,” Sun said.
On Jan 21, he gave his staff members a Spring Festival break. Three of them chose to stay in Beijing, and Sun started his new venture with them.
On April 1, he received the first order from his community, and now his business has expanded to others nearby.
“If I can cover eight communities, the business can break even and I can at least support my staff members’ livelihoods,” Sun said.
For him, the community catering business has provided a way out of the dilemma faced by the traditional catering industry, one of the sectors hardest-hit by the pandemic.
“The investment and potential risk is much lower. You don’t need to worry about high rents, and the investment yield is also not bad. The only problem is that you need to devote much more time to serving your customers,” Sun said.
He used to spend about four hours looking after his restaurants before the outbreak, but now devotes the whole working day attending to business.
“I start work at 8 am, sending product information to different WeChat groups, answering customers’ inquiries and looking after their orders. After lunch, I begin to arrange orders and monitor the entire process to ensure product quality. In the evening, I send orders to communities, ensuring that they are all received. Sometimes, I do not complete deliveries until 10 pm,” Sun said.
Workers extract electrolytic copper at a recycling factory in Hengfeng county, Jiangxi province. (ZHUO ZHONGWEI / FOR CHINA DAILY)
Despite the hard work, he is determined to continue with his new venture and is considering setting up a kitchen to offer family packages and healthy meals, in addition to the existing fast-food products.
“I’ve rented a booth close to my community, for about 15,000 yuan a month. The gross profit is around 30,000 yuan a month, and if everything goes smoothly, I can break even in two to three months,” Sun said.
After giving customers a brief online summary of his products and prices, Sun also offered them this observation: “During your childhood, you cry after you tumble if there are people nearby; when you grow up, you cry after you tumble if there is nobody nearby; when you are middle-aged, you are the only one that you can count on.”
By last month, the number of representatives on Victor Zhao’s sales team at the Beijing branch of insurance company AIA had risen from 33 to 49, while about 15,000 agents were working for the company, compared with 10,000 at the end of last year.
“Most of the new staff members come from industries hard-hit by the pandemic, such as tourism and overseas study consultation businesses,” said Zhao, who joined AIA’s Beijing branch in 1997, when China become the world’s second-largest life insurance market. Before this, he was a contract manager for a European multinational company.
One of the new employees at the branch is Ryan Yuan, born in the 1990s, who joined in March. After obtaining a postgraduate degree in the United Kingdom in business management, he worked for an overseas studies consultation company, mainly in the UK and the United States. This sector has been severely affected by the pandemic.
A farmer harvests mushrooms at her greenhouse in Lianyungang, Jiangsu province. (GENG YUHE / FOR CHINA DAILY)
Yuan said: “I expect it will need at least two years to recover. On the one hand, most overseas schools and colleges have stopped enrollment for the autumn semester. On the other, Chinese parents are not likely to risk their children’s lives if the pandemic is not totally over.”
However, unlike when Zhao joined AIA, competition in the insurance sector is now much fiercer.
“When I joined AIA four years ago, the Beijing branch had 4,000 to 5,000 insurance agents, but during a phone call several days ago, one of my friends said five people he knew had joined AIA. A few years ago, I was the only one he knew working for the company.”
However, despite a rising number of insurance recruits, slower economic growth has led to reduced consumption. In the first quarter, China’s GDP contracted 6.8 percent year-on-year, and most economists expect the growth rate to be about 3 percent this year, mainly due to the pandemic. Last year, the rate was 6.1 percent.
The shockwaves caused by the outbreak have been far-reaching. For example, last year about 1,000 agents from the Beijing branch of AIA joined the Million Dollar Round Table, a key industry gauge for high-performance insurance agents. However, this year only 170 had achieved targets by early this month qualifying them to join, Zhao said.
“As AIA pays a great deal of attention to customer-tailored policies, we need face-to-face communication to serve our customers, which is very difficult during the pandemic,” he added.
To stand out among the fierce competition, he said he will make more efforts to explore the market for high-net-worth individuals, given his legal background.
“I believe that adopting a different strategy is very important for both companies and individuals this year,” he added.
