Bloomberg Businessweek - USA (2020-08-31)

BUSINESS

BWTalks

THEBOTTOMLINE Althoughexportsarea decliningshareof
China’s economy, its factories still rely heavily on global consumer
demand. So holiday season orders are being closely watched.

Whathaveyoulearnedaboutyour

businessduringthepandemic?

Thatnomatterwhat

happensasrestaurants

open,peoplehavegotten

a lotmoreconfidentin the

kitchen,andtheyplanon

continuingtocookathome.

Andtheywantinteresting

solutionstohelpthemthink

abouthowtomakethat

timemoreconnectedto

familyandlessfocusedon

preparationandplanning.

Haveyouhadproblemswithyour

supplychainandlogistics?

Oftentimes,we’resourcing

fromthesameplacesthat

restaurantssourcefrom.So

we’reabletogetreallyhigh-

qualityingredientsandhad

minimaldisruption.When

wehavehada disruption,

wecanjustswaprecipes

betweenweekstomake

surewe’regettingthe

freshestpossibleproducts.

Haveyouhadtotweakyourproduct?

Simplicityis keywhen

facedwithrapidlychanging

environments.Soearly

on,wedidmakesome

modificationstoourmenu,

tostreamlinesomeofthe

recipeavailabilitytomake

it fasterandeasiertopack

andmanagelogistics.Over

time,we’vereintroducedthat

complexity.We’realready

backuptofullserviceon

ourfamilymenu,andvery

closetofullvarietyonour

two-personmenu.We’re

goingtocontinuethat,along

withintroducingthenew

productsandvariety.

Let’stalkaboutthegorillain theroom:

Amazon.Areyouworriedaboutit

comingintoyourbusiness?

I’mlessfocusedonwhether

bigplayersthatmightfocus

onmultiplethingsaregoing

tocomeintothespace,

andmoreonhowcanwe

actuallymakethebest

product,becausethisis all

wedo—andwe’reexpertsat

it. Ourculinaryauthorityand

[ability]tocreaterestaurant-

qualityexperiencesonan

individualbasisin every

person’shome,that’sreally

mostimportanttome.

○BlueApronHoldingsInc.added20,000customersinthesecond

quarter,anditsaveragerevenuepercustomerrose25%○Thecompany

reporteda$1.1millionsecond-quarterprofitvs.a$7.7millionlossayear

earlier○Itsshareshaveplungedabout95%sinceitsIPOinJune 2017

Long-ailingBlueApronhadalmostbeen

givenupfordead.ThencameCovidand

a rushofhomeboundcustomersforits

mealkits.ItsCEOis countingonsomeof

thatkitchenloveoutlastingthepandemic.

—CarolMassarandJasonKelly

Linda Kozlowski

will go ahead celebrating it, and those who
shop for Christmas will go ahead shopping for it.”
Other Chinese executives caution that the easy
gains from an initial reopening phase are over and
say further growth will depend on the virus being
contained. Large holiday gatherings, for example,
may not be on the agenda this year, says Andi Feng,
whose company, Bigger Tang, based in Dongyang
city in Zhejiang province, makes festive decorations
including snowflakes and neon lights.
“Even looking ahead to Christmas, many people
still don’t feel comfortable enough to attend large
events or parties,” she says. “That could be the
reason why gifts are selling well, while a company
like us that makes decorations is still struggling.”
Feng says that before the pandemic, about 70%
of her company’s revenue came from exports, with
Europe accounting for the biggest share. The crisis
has forced her to focus more on domestic demand.
She’s cut staff from 100 to fewer than 30 and has
needed government loans to stay afloat. “Our cli-
ents are afraid of ordering too many goods because
everyone is afraid the products will end up stuck in
their hands,” she says.
Mark Ma, who owns Seabay International
Freight Forwarding Ltd. in Shenzhen, is seeing
catch-up demand in the U.S. and Europe that’s driv-
ing orders for goods, particularly bicycles as con-
sumers look to avoid public transportation. About
a third of the goods his company handles are sold
on Amazon.com, he says. “Traditionally our peak
season starts in May and June,” he says. “This year
our peak season was delayed by the pandemic dis-
ruptions, but we’re seeing it here now.”
Willie Tan, chief executive officer of family-
owned Topchoice in Hong Kong, which uses
Chinese manufacturers to produce ceramic table-
ware, hopes he can see a similar later-than-normal
sales bump this year. To make up for lost revenue
from the pandemic-plagued spring, his employees
are multitasking to keep costs down, with sales
agents pitching in to pack their own boxes of sam-
ples. While Tan has seen strengthening demand
from around Asia, the picture is more subdued in
his other key markets including Europe, the Middle
East, and South America.
“We are hoping that during September and
October people need immediate deliveries, and
we will have an opportunity to fill spaces on
their shelves for Christmas,” he says. If those
orders don’t transpire “it will be a big problem.”
—Enda Curran and Jinshan Hong

13

○ Interviews are edited for clarity and length. Listen to Bloomberg Businessweek With

Carol Massar and Jason Kelly, weekdays from 2 p.m. to 6 p.m. ET on Bloomberg Radio.