On the sixth day of the Chinese New Year, Lin Qingxuan founder Sun Laichun lay in bed, feeling that both he and his brand were doomed. "We can't just wait to die!" On the brink of collapse, he wrote a 10,000-character letter titled "A Letter in the Darkest Hour," stating bluntly that "the real difficulties have not yet begun." However, he didn't expect a turnaround two days later. On February 1, all 30 Lin Qingxuan stores in Wuhan were closed, yet sales ranked second nationally. He couldn't believe it. Later, he concluded: It was branding and digitalization that saved Lin Qingxuan. This Spring Festival, many entrepreneurs likely shared Sun's experience of the "darkest hour." In this extraordinary period, how companies should think about strategy is an urgent matter. In light of this, Junzhi Strategic Consulting, together with Cailian Press, Huxiu, Sino-German Management, Huashang Taolue, Caijing Wuji, and other media, launched a public welfare live course. Corporate leaders and consulting experts used professional business thinking and knowledge to help confused companies solve problems and overcome difficulties. The following are cases, insights, and suggestions distilled from this public course. -01- Case: Lin Qingxuan: From "Doomed Again" to Sales Recovery As the founder of skincare brand Lin Qingxuan, Sun Laichun spent 16 years opening over 300 stores in major shopping malls across the country. However, after the outbreak, within less than 16 days, 157 stores closed. In his words, "Every day I open my eyes to million-level expenses, losing tens of millions a month." When Sun decided to write a 10,000-character letter to all employees, it showed that Lin Qingxuan hadn't truly fallen. The letter's purpose was to inspire people; that was the first step. But to deal with the crisis, they needed to find direction and methods. Lin Qingxuan's approach was "full digitalization of sales." On February 1, Lin Qingxuan began deploying operations in stores nationwide: First, connect with existing customers through online social software and conduct online sales through e-commerce entry points. For example, "DingTalk + Taobao" and "WeChat + Mini Program Mall." Second, combine products with pandemic-induced needs, targeting the reality of everyone wearing masks, to create new consumer mindshare — "Lin Qingxuan Camellia Oil repairs the skin barrier and makes skin healthier." From February 1 to 2, Lin Qingxuan's sales recovered. More importantly, Wuhan stores ranked second nationally in average sales per store, with February 1 sales up 234.2% year-on-year and February 2 sales up 182.8% year-on-year. "Cities can be locked down, but perceptions cannot." Sun Laichun summarized Lin Qingxuan's path to survival with three words: "confidence, brand power, and digitalization." Lin Qingxuan's redemption — Brand power is the greatest immunity. Under the pandemic, it's all about a company's brand influence. It was precisely the large-scale investment in Focus Media elevator advertising over the past year that significantly boosted brand power, saving the company at this critical moment. Lin Qingxuan is positioned as high-end, one of the few domestic brands that can compete with first-tier international brands. In brand communication, the fragmentation and dust-like nature of mobile internet didn't make Lin Qingxuan short-sighted. Lin Qingxuan still chose to allocate its limited budget entirely to Focus Media, the core media platform for centralizing and detonating brands, deeply occupying the core living spaces of mainstream consumers. It achieved high-frequency reach in elevator spaces in apartment buildings and office buildings that consumers pass daily, occupying the mindshare of mainstream groups, thereby enhancing brand influence. The pandemic is like a mirror that reveals the true nature; it's like waves washing away sand. What remains are good brands worthy of consumer trust. -02- Trends: Under the New Trends After the Pandemic, Chinese Companies Will Face 5 New Opportunities Chinese companies have long been anxious, stemming from confusion about the economic situation and capital trends. Since the third quarter of 2019, a "money shortage" has spread in the primary market, and many companies felt pressure and reacted. The shadow of "layoffs" has always been present. Data shows that as of December 6, 327 companies closed in 2019, a large portion being startups. The sudden arrival of the pandemic acted as a catalyst, amplifying problems and disrupting many companies' plans. "Not knowing where to go, nor who to walk with" is a common confusion among many business leaders. For this reason, Junzhi Strategic Consulting, with rich practical experience, along with Caijing Wuji and other financial and business media, decided to jointly organize such a public course to help companies boost confidence, see the big picture, and find methods. After all, "Don't let companies go bankrupt, don't let employees lose jobs" is the true responsibility of the entire Chinese business world at this special moment. What is the future of China's economy? You may not need to worry too much. Based on historical experience, major pandemics generally have limited impact on the macroeconomy. Except for the 1918 Spanish flu, other major pandemics in history caused GDP losses of less than 2% in affected regions. This impact on capital markets will manifest as a short-term decline, but once the pandemic turns around, a rebound will quickly follow. Moreover, with the guarantee of population base and market size, China's economy will continue to grow, ensuring that after the pandemic, economic development will quickly return to normal. According to Junzhi Strategic Consulting's analysis, the pandemic has a huge impact on the consumer market, but danger and opportunity coexist. The pandemic and quarantine have caused great distress to the consumer market, turning the originally booming Spring Festival consumer market into a depression. But after the pandemic slows and restrictions are lifted, the consumer market will see a small surge; this is the first opportunity. "First, there's a change in consumer mindset; people want to live in the moment. Second, there's accumulated year-end bonuses; these hot money will eventually flow into the market." After the pandemic, some new trends have emerged, giving Chinese companies 5 new opportunities:
First, the accelerated development of online consumption habits will lead more users to buy products and services online, so industries related to personal consumer brands and consumption habits will see huge development space; Second, convenience businesses meeting community needs will accelerate; more companies will deploy community O2O services; Third, many companies are forced to strengthen online models; online businesses such as education and training will develop rapidly, but competition will also intensify; Fourth, demand for personal transportation will increase; new energy vehicles, used car sales, and even new single-person travel modes will see a boom; Fifth, people will pay more attention to health, so health, wellness, and fitness industries will see new development. -03- Methods: Turning Crisis into Opportunity, 5 Preparations Starting with Strategy On May 6, 2003, an Alibaba employee was diagnosed with SARS. Subsequently, the entire company was quarantined, and Jack Ma was stunned. However, Ma and Alibaba eventually pulled through, not only stabilizing morale through care and incentives, maintaining production through makeshift "online work," but also discovering society's real need—online shopping. Taobao was born during the quarantine, and Alibaba was reborn from the ashes. Since then, the high unity of internal cohesion became Alibaba's most powerful weapon. Lesson from Alibaba during SARS: "Unite internally, discover trends externally, and launch Taobao immediately without waiting for the pandemic to end." Focus Media, now a leading media company, was founded during the SARS period in 2003. "Starting a business during this time was very difficult; the pandemic and lockdown made business development tough," said Jiang Nanchun, founder of Focus Media. But Focus still believed that elevators are urban infrastructure; only in the unique, must-pass scenario of elevators would consumers actively watch ads. So Focus worked late into the night every day, which attracted the attention of SoftBank, an investment firm next door. In May 2003, SoftBank invested in Focus Media. Subsequently, after SARS passed, Focus and China together entered a golden five years. Focus covered 90% of China's quality buildings, became China's second-largest media group, and went public in the US with a market value exceeding $8.6 billion. Lesson from Focus Media during SARS: "For ambitious people, crises are always opportunities; every crisis is a chance to change the market landscape." How to unite strength in times of crisis, how to successfully meet challenges, turn crisis into opportunity, and achieve survival against all odds? Xie Weishan, Chairman of Junzhi Strategic Consulting, led the audience to think from five dimensions during the live broadcast of this public course, which is what Chinese companies need to do at this turning point. Step 1: Restructure Strategy. In the face of new competitive forms, rethink corporate and brand positioning, and readjust strategy. "The core of restructuring strategy is to handle the relationship with competitors. How can we unite with peers to achieve development?" In this action to support the epidemic area, Feihe Dairy was among the first companies to donate 100 million yuan in cash. In the infant formula industry, Feihe's donation alone equaled the total donations of all its peers combined. In 2015, Feihe ranked only seventh in the entire Chinese market. When Feihe's strategy was defined as "milk powder more suitable for Chinese babies' constitution," the company began to take off. In 2019, Feihe became the industry leader in China, ranking first in net profit, growth rate, and sales scale. Being among the first to donate 100 million yuan in cash is a very significant act of kindness. For the Chinese market, Feihe did something remarkable, making great efforts for the voice and reputation of domestic milk powder. Next, Feihe will join hands with domestic milk powder brands to form a brand alliance to revitalize China's dairy industry. In addition, Feihe's brand rise is inseparable from detonating 300 million mainstream consumers through Focus Media's elevator media. China's 300 million urban mainstream consumers have a strong vane effect and are opinion leaders and word-of-mouth champions. Step 2: Seek Innovation. The pandemic may bring new demands, such as health and wellness needs, or the need to boost immunity. At this time, decisively abandon original plans and carry out all-round, full-process innovation. After all, any small progress, accumulated, will form a huge domino effect. Step 3: Actively Deploy. Don't wait passively; instead, focus on trends already discovered and actively deploy for the future. Stopping is not for waiting, but for a better departure next time. Step 4: Strengthen Brand. Product power is the foundation of a company; brand power is the company's true immunity. The real epidemic will eventually pass, but the epidemic in business warfare always exists. How to strengthen the brand? This is a question every company must consider from start to finish. The best way to promote a brand is not to promote yourself, but to have all sectors of society willing to speak for you and praise you. For example, during this pandemic, at a critical moment, Bosideng donated down jackets worth 300 million yuan to builders in the epidemic area, and they were best-selling styles with an average price of over 2,000 yuan. As a representative of the renewal of domestic brands, Bosideng once faced major challenges. On one hand, it did subtraction, embracing young people and collaborating with international stars to increase brand fashion sense; on the other hand, it went high-end, partnering with Focus Media to influence over 300 million urban mainstream consumers with high education, high consumption, and high income, creating a centralized and large-scale brand detonation. Step 5: Adjust Operations. "Many companies often say they don't have time to practice internal skills. Now is an opportunity. Every improvement now will multiply the company's strength after the pandemic ends." Junzhi's 5 suggestions for confused Chinese companies: restructure strategy, seek innovation, actively deploy, strengthen brand, and adjust operations. -04- Future: The Real Epidemic Will Pass, but Beware of the Return of "Price Bloodbath" In the past few dozen days, Chinese entrepreneurs have shown their responsibility and integrity, donating money and supplies to fight the disaster. However, for companies, all focus must return to the economy. On February 10, many companies resumed work or started working online, meaning China's economy began to accelerate, and competition restarted. Xie Weishan emphasized that Chinese companies should also be wary of the return of the "price bloodbath," a commercial plague. The material abundance brought by industrialization and the market expansion brought by globalization jointly released the demon of "price bloodbath." Low-price competition and neglect of product power will be the beginning of a vicious cycle. In the past 20 years, Chinese products once swept the world quickly due to "good quality and low price," but when costs rise, indulging in "price bloodbath" will definitely drag down many companies. How to deal with the price bloodbath? First, for Chinese companies, finding the real needs of society is very important. "In the future, capital will be more cautious and will never pour money into homogeneous products. Therefore, how to find your unique competitiveness is the key to surviving and thriving." Second, product power must be improved. After the pandemic, Chinese people will be calmer and more cautious. "Shopping around" will become the norm, but sensitivity to price will actually decrease. At this time, it's all about product power. Finally, it's a comprehensive spiral rise driven by brand enhancement, which is comprehensive "strategic innovation." Currently, Western management theories are basically aimed at solving application problems, such as high efficiency, fast processes, and standardization, essentially improving operational efficiency. Chinese companies need to draw nutrients from Eastern wisdom, from internal morale to external environment, from strategic direction to execution details, and innovate in every aspect. In this first lesson of the 2020 corporate strategy public course, tens of thousands of people watched online and asked questions. It is hoped that the sparks of thought generated will help more Chinese entrepreneurs. Tips will be paid 400-2000 yuan once adopted.