Juggling under the new normal
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Sunshine Kingdom
As a retailer of Malaysian specialty food products for tourists, Sunshine Kingdom’s business is closely tied to the retail and tourism industries, both of which are among the most severely hit by the Covid19 pandemic and the subsequent lockdowns in Malaysia and many parts of the world.
The reopening of businesses since early May has brought some comfort to the owners of Sunshine Kingdom. Its store in Central Market, a key tourist hub in the heart of the city, has opened its doors with the relaxation of the MCO.
However, demand remains slow. The fact that the management of Central Market has waived rental fee for the month of April provided the company with temporary relief.
Aesos Lai, one of the co-founders of Sunshine Kingdom, is still optimistic that the business will see a rebound once travel resumes as Malaysia remains one of the top destinations for Chinese tourists.
As China gradually picks up, recent news of its domestic travels have been rather encouraging. Lai is hopeful that this will slowly reflect in international travels.
Instead of fretting about the tough times, Lai has made use of this down time to indulge in his musical interest to pen a song and a book as a tribute to healthcare and other frontline workers fighting against the Covid-19 pandemic.
ONE of the most striking realities for many small and medium enterprises (SMES) amid the coronavirus pandemic is that consumers are changing the way they get their goods and services. This also means that businesses will have to change the way they reach out to their customers.
Many companies that relied on direct customer contact were faced with difficulties as their operations came to a halt under the movement control order (MCO). With consumers no longer walking through their doors, these businesses had no means to generate income.
Those who were previously averse to going online found that they had no choice but to learn the new tricks of the trade. Many SMES turned to online delivery to garner sales and found ways to move their services online to enable remote working.
However, there were other physical challenges that small businesses still had to deal with even as they adopted the digital way of doing things. For one, they had to navigate through strict roadblocks and shorter operating hours during the MCO which made it hard for them to juggle between catering to growing online demand and delivering their products and services.
Additionally, companies that were in the middle of negotiating new investments or embarking on expansion plans were suddenly left with nothing. Plans were shelved and negotiations came undone.
This would certainly impact the companies’ short- and mid-term plans, possibly even for the longer term as many of them need time to recover.
The SME sector, which is supported by limited capital and reserves, has been struggling since the commencement of the MCO.
Some surveys point to as high as 68.9% of local SMES having experienced more than 50% drop in business within one week of the MCO.
Those in the retail, accommodation, F&B and tourism industries went through an even tougher ordeal in April.
There is no denying that the economic stimulus measures announced by the government have helped cushion some of the impact. From rental waiver incentives, soft loans, loan moratoriums, conversion of credit card balance to long-term loans, and the restructuring of corporate loans to wage subsidies for workers, they help SMES address some of their immediate hardship and cash flow problems.
While many have noted that applying for some of these aids have been quite a challenge, there are also those who have benefited greatly from them.
One of these include Penangbased ice cream maker Ice Estate Sdn Bhd, which leveraged on the extra funds available to upgrade its hygiene standards to meet the new regulations on workplace health and safety.
The need to upkeep workplaces has certainly added to companies’ cost of doing business and the extra funds would certainly come in handy.
Others have also found opportunities in new demand as companies look for cost-effective ways to operate in the new normal. One example is human resources solution company Accendo HR Solutions Sdn Bhd who is working with other organisations that are increasingly looking into new ways and approaches to conduct their business in the future, particularly in terms of optimising their human capital.
These realignment in business models and operations is important and essential in ensuring business sustainability in the future.
While the coronavirus outbreak has taken everyone by surprise and inflicted severe impacts on many businesses, most founders of small businesses have expressed optimism over the long-term prospects of their businesses.
They believe demand will eventually return and the vibrancy of the economy will help bolster them in the future.
For now, though, they are hanging tight, making use of every avenue and tapping new innovations and technologies to generate enough sales to last them in the meantime.