Catching a wave: scale-ups in China navigating the Corona virus

by Anna Fenko,, March 20, 2020

The general view is that scale-ups operate in a VUCA world – volatile, uncertain, complex and ambiguous. In current times that is more true than ever. So, catching the Corona shock wave, instead of being drowned by it, is now a key success factor. How can scale-ups use the lockdown to keep innovating and developing new products and services for the new world that will emerge after this crisis? ScaleUpNation has talked about it with Bessie Lee, the founder of Withinlink (Shanghai, China).

What are the implications of the restrictions on travel and face-to-face meetings for young, innovative, fast-growing companies?
If your company is young, innovative and fast growing, you should find it a lot easier to turn around compared to big corporations. Based on China’s experience, everything moving online wasn’t as bad as everybody had thought. It actually improved work efficiency for many. We have seen many of our portfolio companies enjoying strong revenue growth exactly because their solution does not require any face-to-face meetings.

Join forces
But what about those companies that rely heavily on physical contact?
We have seen many young and agile technology companies in China being very innovative in helping each other through this tough time. Those innovations included “staff sharing”: retail restaurant businesses seconded their staff to food and grocery delivery companies. Restaurant businesses were badly impacted by social distancing and mandatory quarantine. Their staff were idled. At the same time, food and grocery delivery service providers were short of people. The two industries coming together made the perfect solution.

“If your company is young, innovative and fast growing, you should find it a lot easier to turn around compared to big corporations.”

Disrupt the old model
Can you give other examples of how innovation can help scale-ups to survive this crisis?
One of the industries badly impacted by the virus outbreak was the cinema. Chinese New Year is normally the peak season for release of new movies. This mandatory shutdown of cinema was a nightmare. One movie producer/investor decided to partner with an online video platform in China and release his box office title on this online video platform. This is a smart way for the movie producers to recover their loss and for the online video platform to acquire new users and build relationships with their current users.

Every need is an opportunity
A lot of scale-ups are losing customers now as everybody tries to cut their costs to a bare minimum. Can scale-ups turn this situation and catch the corona wave instead of being drowned by it?
We won’t be able to survive this crisis without the profound change of everyday behaviour and the way the business operates. As people are changing their habits and ways of work, their needs are changing too. What do your customers need the most now? I have an example. In most Western countries medical experts and media discourage consumers from buying or stocking up masks to avoid shortage. On the contrary, the Chinese government encouraged and demanded people to wear masks, which created a mask shortage. The government urged manufacturers of all kinds to investigate if their production lines were able to be converted to mask production. Companies such as Sinopec, Shanghai Auto, Gree (large home appliances manufacturer) etc. quickly converted part of their production lines into mask productions.