Advantage China conducted a Special Report focused on effective collaboration at the height of the Covid-19 Crisis1. Nearly 300 senior and mid-level managers across more than 50 FMCG Companies including Wal-Mart, CRV Metro, Coca-Cola, Pepsi, P&G, Unilever, L’Oréal, Kimberly Clark, Mondelēz, Mars and Nestlé shared their voices.
*Research was fielded from February 13 to 25, 2020.
What We Heard:
77% of Retailers and 64% of Suppliers experienced improved partnerships during the outbreak.
Actions Making the Greatest Impact:
- Limiting negotiation behaviours
- Accelerating problem-solving
- Increasing frequency of communication
- Enhancing capabilities
- Upgrading capacities
Both retailers and suppliers reported the increasing importance of and improvement in the following behaviours:
Increased Trust was driven by an improvement in accountability from key counterparts. The crisis environment meant there was little time to follow-up or manage other parties. Trust enabled partners to focus on delivering on their commitments during this time.
A crisis setting created an environment that increased Transparency, limited negotiation behaviours and reduced the fear of judgement or blame. As a result, problem-solving accelerated and time was saved getting to the right solution.
Communication & Responsiveness
Business communication increased in frequency from monthly to daily and in some cases hourly, as the crisis evolved and required collaboration to solve issues quickly. Being clear about actions and being available to respond to requests were key differentiators for retailers and suppliers working together.
Along with demonstrating improved collaborative behaviours, the following competencies were deemed critical in the crisis environment:
94% of retailers rated Logistics Support as the competency they most needed during the crisis. Factory closures in China severely limited production, yet retailers needed to provide their consumers with products across a diverse network. Supply chain became the critical focus area for collaboration and continues to be crucial as businesses continue to evolve with the ramifications of the crisis.
Offline To Online (O2O)
The shut down of many major cities in China significantly reduced the number of people going into stores. As such, home delivery via online ordering increased exponentially for all retailers with online capabilities.
73% of Suppliers and 79% of Retailers reported online shopping as critical and that they needed to upgrade their capacity and capability in 2020!
China appears to be on the downward slope of the crisis curve. Advantage China, Managing Director, Jason Gao, drew on Chinese mythology when reflecting on his experience with the Covid-19 crisis when he said:
“Like Yin and Yang there is a good side and a bad side to everything. Life has been very difficult during this crisis, but in business and as a community we have learned to collaborate better and we are stronger and wiser as a result.”