COVID-19: Internet innovation and upgrading
April 20, 2020
The unexpected outbreak of COVID-19 around 2020 is exerting enormous impacts on China’s offline retail, services, and travel industries, and the current rapid spread of the pandemic is threatening the global economy.
However, we foresee the crisis as a rare opportunity for internet-based enterprises to accelerate bringing production and service activities online by widely employing digital and intelligent technologies. This will facilitate innovation and upgrading of B2C solutions as well as lead to an explosive development of B2B/2G solutions.
The impact of the COVID-19 outbreak on internet-based enterprises: From emerging to full-blown
Traditional industries are subject to impacts of the coronavirus outbreak in varying degrees. This in turn is impacting internet enterprises differently, from demand dynamics to the operational mode (i.e. online, offline, or a combination of the two), bringing a sea of changes to some but not to others.
- Disrupting impact in terms of plummeting market demand. Certain internet companies, including those in OTA, catering SaaS, and entertainment and movie industries, rely heavily on offline segmented operations. They are coming under substantial impact amid the COVID-19 outbreak.
- Transformative impact. Certain internet companies are facing dynamics in online and offline operations. Some cancel offline operations and go online completely.
- Booming impact. Rigid demand is forced to move online, with routine manned operations becoming unmanned and intelligent. This dramatic development presents itself as an increasingly profitable opportunity to B2C and 2B/2G enterprises.
Dilemmas faced by internet enterprises: To be defensive or offensive?
Defensive or otherwise
Should they stubbornly stick to their offline business, believing in cash as king, or make strategic adjustments for doubling their growth potentials?
Defensive and offensive or otherwise
Should they make breakthroughs in given areas emphasizing customer centrism or reinvent themselves by innovating across the board?
Offensive or otherwise
Should they rush into the game, aiming for sweeping success? Or be prepared in the first place and proceed steadily in a step-by-step manner?
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The way out: Building up internal capabilities as a foundation for growth and developing step-by-step strategically
What is the way amidst the COVID-19 outbreak? This question challenges the wisdom of the CEOs of many internet enterprises. Our suggestion is that this be approached comprehensively from a variety of perspectives as described below.
- From the perspectives of the government and employees, the enterprises should, in carrying out their social responsibilities, ensure that employees are engaged in work and get paid. In doing so, they assist the government and people in overcoming the difficulties imposed by the coronavirus outbreak.
- From the perspectives of customers and shareholders, it is necessary that internet enterprises see beyond the epidemic and transform it into an opportunity for continuous innovation, provision of high-quality products and services, and for improving customer experience. In doing so, they become growth hackers profiting from an expanding base of customers, and this in turn will facilitate widespread adoption of platforms among them. Emerging strong out of the epidemic will pave the way for their long-term, sustained growth.
Our recommendations: A five stage, 10 step recipe for breakthrough growth!
1. Customer acquisition
- Vigorously developing new products and capturing new customers
- Resolutely adjusting business strategy in response to changes in market demand
2. Growth strategies
- Engaging in mergers and acquisitions at appropriate times to strengthen market positions
- Expanding operations through customers, partners, and social media marketing
3. Customer retention
- Upgrading customers’ B2C experience and promoting B2B transformation
- Strengthening platform trust through ironclad guarding of personal information and rights to privacy
4. Relevance
- Developing open platforms and exploring as a service model
- Developing solutions jointly with ecosystem partners
5. Operations
- Developing one middle layer platform for greater capabilities and integration of resources
- Combining intelligent and manned operations for greater efficiency
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Contact us
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Shanshan Wu
Managing Director – Internet and Digital Growth Strategy, Accenture Strategy, Greater China
Robert Hah
Managing Director – Accenture Strategy Lead, Greater China
Shan CHEN
Director – Accenture Strategy, Greater China
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