Overview on the current situation of the industries in China affected by COVID-19 - Gi Group

Dear Members and Friends of CICC,

China-Italy Chamber Of Commerce is Glad to share with you an article by its Member Gi Group.

The particular historical moment we are living is affecting not only our daily life but also our vision of the future. We are all wondering how the post pandemic world will be: how will our society deal with an unprecedented spike in unemployment? How many activities will never reopen? How will children go to school? How will our social life change?

If the enormous health tragedy is excluded, experts agree that the virus is an accelerator of global trends at environmental, technological, social and business level. Consumption models are moving to digital platforms, interactions with costumers/suppliers/competitors have to be redesigned, we are in a process of reinvention and the labor market reacts changing, evolving and leaving behind old habits and strategies.

China was the first Country to face Covid-19 outbreak and the new reality after that, 2020 signed a big change in the Chinese corporate world.

The industries with major positive or negative impact were the catering, tourism, entertainment, logistics and education industry.

Compared with the Spring Festival 2019, this year 78% of catering enterprises lost more than 100% of their operating income during the outbreak. In February, about 70% of hotels and 93% of restaurant closed. Even though the takeaway business saved some of the daily revenue of big restaurants, the human resources costs and the heavy back office work hit the industry very hard. Same happened to hotels that received a large number of cancellations.

Entertainment industry is changing too.

Cinemas, that can now use only 75% of the seats available, registered a fall of affluence of 29.55% compared to 2019, but the income are still very high and increasing compared to the period 2014-2018.

Most of entertainment business are moving to online market, which exceeded 140 billion yuan in the first quarter of 2020 and is expected to reach 500 billion yuan, with a growth rate of 27.7%. Analysts believe that the impact of the outbreak stimulated the online cultural and entertainment activities and amplified the value of the industry, pushing at the same time online platforms to upgrade.

The logistics industry is one of the few industries that has been positively affected by the outbreak. Because of the epidemic, to avoid close contact, people massively used e-commerce, online shopping, instant distribution, that led to a high growth trend of the logistics industry. Last year, China’s logistics industry parcels reached 60 billion; this year, the business volume registered a rapid growth since February and is now stable at almost 20-30% of the speed growth range, expected to exceed 70 billion orders for the whole year. In the first three quarters of 2020, the total revenue of the logistics industry was 7.4 trillion yuan.

With the sharp rise in logistics demand in the e-commerce industry, Ali, JD.com, Pinduoduo and other e-commerce platforms are improving their logistics layout. The international aviation logistics and the medical cold logistics supply chain system are in a strong and fast development moment.

Under the impact of the epidemic, the education industry had to adjust to a new reality too, rapidly moving to online education. The K12 education market, with 24.777 million users in 2019 is expected to exceed 37 million in 2020. The online education solution, however, raised doubts on its quality between students, parents and teachers.

With the normalization of the epidemic, while offline education is trying to find its own unique competitive advantage, online education is trying to establish an excellent brand reputation.

For all the changes and new challenges the after pandemic market presents, a good dose of courage, creativity, ethics and agility is required in tackling roads never traveled before. To make the difference today is people, with values, skills, attitudes, and spirit of collaboration. Now more than ever, is important to pay attention to talent, knowledge, continuous training, soft (or transversal) skills. The leadership models must also change: leaders have to inspire and facilitate the work of their teams with coaching and emotional intelligence.

It’s time to catch the great opportunities in front of us and think bigger.

Gi Group

Gi Group is one of the world’s leading companies providing services for the development of the labour market. The Group is active in the fields of temporary and permanent staffing, search and selection, HR consulting and training, as well as in a variety of complementary activities.

Kind Regards, 

CICC Team.