Chinese firms overseas should be adaptive as second COVID-19 wave looms

Source: Global Times Published: 2020/9/22 21:50:06

Illustration: Tang Tengfei/GT

As COVID-19 cases soar in India, the prospects of an effective economic recovery grow further out of reach. Chinese smartphone vendor Xiaomi recently launched its "MiStore-on-wheels" project, selling mobile phones and other products through vans.

With a second wave of infections looming across the world, the company offered an example to other Chinese firms operating in India and beyond for how to tackle the challenge with innovative measures, while at the same time preparing for a long winter.

Manu Kumar Jain, managing director of Xiaomi India, wrote on Twitter that the project is a new concept that brings retail experience to the heart of India, connecting villages through a moving store.

Xiaomi has invested in India for several years and become one of the country's top smartphone brands thanks to products that meet the needs of local consumers. It was therefore inevitable that India's surging COVID-19 cases will affect daily operations of the company and its partners.

The "moving stores" project, though likely only a temporary solution, offers vendors an effective approach for reaching more customers stuck in their homes.

Unlike in China, smartphone sales in India depend heavily on offline stores. Mobile vans may therefore prove to be a particularly easy and practical solution under such circumstances, and offer a chance for promotion in the meantime.

The populous country's insufficient health facilities have put India on course for ever higher numbers of COVID-19 cases. With the likelihood the country will overtake the US to become the world's new virus epicenter, India has increasingly poor economic prospects. 

According to Johns Hopkins University, India has reported 5.56 million confirmed infections as of Tuesday, just behind the US' 6.85 million. 

After a steep 23.9 percent GDP slump in the quarter of April-June, rating agency India Ratings and Research revised the country's GDP contraction forecast in the financial year 2021 to 11.8 percent from 5.3 percent, local news outlet The Hindu reported.

In addition to India's prolonged economic recovery, Chinese firms operating in the country also face rising animosity from the local authorities, and need to prepare for potential arbitrary crackdowns. In recent months India has recklessly tried to antagonize China - from provocative moves at the border to attempts at decoupling in economic areas. 

Outside of India, the global economy is facing mounting pressure from the fallout of the pandemic, especially as a second wave of infections start to emerge. The World Health Organization (WHO) has warned that COVID-19 cases are rising again in Europe, creating a potentially serious situation according to media reports.

Under such circumstances, Chinese firms operating overseas not only need to roll out innovative coping strategies, but also to make preparations for a long winter, gathering their strength for the future.

The article was compiled based on an interview with Ma Jihua, a veteran analyst of technology industries.


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