A learning curve for startups
New services and agility keep tech companies at the forefront
Tech-enabled companies have generally had the upper hand while many businesses fumbled in the wake of the Covid-19 pandemic and the subsequent movement control order (MCO).
They already have a system that supported remote working and digital transactions and were better equipped to cater to consumers’ shift to online purchases.
Even so, it wasn’t necessarily a breezy path for these companies to adapt to the challenges posed by the current outbreak and the change in consumer habits. Given that this is an unprecedented circumstance, many tech startups have found that they, too, needed to change strategies, reallocate resources and shift focus to cope with the rapid changes under the MCO.
This couldn’t have been more true for logistics startup Thelorry, which enables consumers and companies to book lorry delivery services. The platform saw a sudden drop in its consumer business as moving services across the region suffered due to nation-wide restrictions.
“For Thelorry, it meant a temporary pause of our consumer services. Inaction wasn’t going to help, though. What we needed was to pivot our business to where the opportunity arose within a business relatable to logistics while adapting our business to the new situation and keeping an eye on what was happening so that we can keep adapting as things change,” shares co-founder and executive director Nadhir Ashafiq.
New initiatives
Within a week into the MCO, the platform launched Thelorry Grocer, a new delivery service for consumers to get fresh groceries and other home essentials.
But was this enough to cover the dip in the business?
“I guess the answer would be we have gone into survival mode to keep our business afloat and to offset as much business losses as possible. Like most entrepreneurs out there, rather than panic, we remain innovative and pivot direction where necessary,” he says.
Fortunately, its business-to-business segment remained upbeat as it serviced e-commerce brands such as Lazada and Shopee, which flourished as online shopping increased.
Although Thelorry was able to quickly roll out a new service, Nadhir notes that the short time frame made it a challenge to recruit drivers in the beginning. Nadhir himself was on the ground making up some of the routes.
Amidst falling margins, the startup had to also be mindful of its new pricing strategy in meeting growing demand for its new service.
But he stresses the importance of embracing change as the landscape evolves.
“We need to collectively reassess and adjust our plans in the current dynamic environment,” he says.
Thelorry isn’t the only one to have rolled out a new service.
When MCO was first initiated, Happy Bunch couldn’t operate as it was deemed a nonessential business even though it is an e-commerce company.
“Like other online retail companies, our business is payment upon purchase, which usually happens within the same month. So when we can’t generate any revenue, cash flow becomes an issue.
“Not knowing when we could resume operations meant that we had to look for alternative income streams,” says Happy Bunch executive officer Beh Lee Yen.
A few weeks in, the flower delivery startup launched Happy Mart to introduce other products such as cakes, snacks and baby gift boxes, which could still be used for celebrations. It also worked with its flower wholesalers to supply fresh vegetables directly from Cameron Highlands.
While the new service did not cover their shortfall, Beh says it gave them new insights into consumer buying patterns.
“The Happy Mart in its current form is likely a temporary solution. But the insights we have gained from it will allow us to adjust our gift offerings going forward,” she says.
Likewise, advertising platform Adeasy rolled out its SME campaign in early April to support its core user segment as revenue dropped more than 50%.
Therine Goh, chief operating officer and co-founder of Adeasy, notes that as businesses cut costs during this time, expenses for advertising will naturally decline.
“We are a SME ourselves and we know how hard times are now. The objective of this initiative is to provide visibility to SMES and help drive immediate revenue for them via a one-stop webpage.
“We’re also working with Otomate Me to provide SMES without a digital presence the option to create an online order page to receive orders directly via Whatsapp. This is a probono initiative from us, and is completely free for SMES to list and sell.
“We are also in the midst of developing new business models to pivot to for the estimated long recovery period post-mco. So far, I think what we’re doing is enough to keep the team and business going,” says Goh.
The main challenge is to ensure that it can sustain the business long enough to ride out this crisis.
Making adjustments
chief
Some startups like Amazin’ Graze have been fortunate to see booming sales over their platform. However, some adjustments were still necessary to ensure that it could meet the demand amidst restricted movement and supply chain disruption.
Amazin’ Graze chief executive officer Amy Zheng says it had to deal with reduced workforce and difficulties with procurement and delivery schedules.
“Many campaigns and product launches we had planned were also moved or cancelled due to the MCO, so the team had to work out a new plan overnight to meet the new demands from the public,” says Zheng.
As its retail partners expanded their e-commerce capabilities, the company also reallocated more resources for its online platforms and targeted its marketing campaigns and customer service towards digital channels. Some of its manpower were repurposed to take on new roles as more orders came in online. They also created bulk sized packaging for best selling products and created DIY kits to match new consumer trends.
Meeting f uture demands
The pandemic has undoubtedly leapfrogged consumers’ switch to online purchasing.
Understanding this behaviour, says Nadhir, is essential for a company to develop agile services and better serve their consumers in the moments that matter most. As more people become comfortable with using the Internet to seek services, this will help Thelorry build towards its goal of becoming an everyday super service.
“Ultimately, we want to serve more of the everyday needs most relevant to consumers’ lives. At the same time, it is about improving livelihoods. Operating in a dynamic environment means rethinking what we know about our consumer trends and remembering that little things go a long way in helping our consumers,” he says.
He believes positive consumer sentiment will eventually return and when the economy picks up, the logistics industry will resume its uptrend and allow Thelorry to return on its growth path.
Goh adds that as startups adjust their strategies to meet future trends, there is also a need to put in more legwork to support those new strategies.
“We’ve learnt that being quick to pivot is not enough, what matters is also how well we understand the purpose of why we’re doing it, and how it’s executed. Don’t just pivot for the sake of pivoting. It has to make not only business sense for us, but also provide actual value to our users.
“Moving forward, even though we should act fast, we will invest more time in doing prep work such as evaluating and researching the market and products before rolling out anything,” she says.
Ensuring that the company remains flexible is also key for many startups as they prepare for the future given the uncertainty ahead.
“I’ve learned to build a business that is flexible and can adapt to changing environments because change is the new normal. These are mindsets and key strategic decisions that a business needs to adopt.
“For example, the ability and speed to change product offerings, the ability to create new departments and also decrease or even shut down other departments quickly. There are always opportunities during crises and I believe that most businesses can create new value during crises if they manage to adapt sufficiently fast.
“Even if you have the best plan and the best team, the world can always send you a curveball to disrupt everything. I’ve learned that it’s important to diversify your business so that you have a product to offer during good times and during challenging times.
“If your business only offers goods and services that are doing well during good times, you will not be able to weather storms when people tighten their wallets during down times,” shares Amazin’ Graze’s Zheng.
With demand for healthy food with longer shelf life set to rise, Amazin’ Graze is also looking to beef up their production capacity and product offering.
Meanwhile, Beh notes that the changes in consumer behaviour may impact its future product offering.
She observes that more people are gifting essential items like its fresh vegetable boxes, which could be built upon.
“The other big change which is going to stay for a while is that people are looking for things to do at home. Even after the MCO is lifted, many people will continue to stay home for safety measures, which is why you would have probably seen many DIY products launched in the last couple of months. So, we will take inspiration from that in our future offerings.
“I think I’ve learned that gifting comes in many forms (not just flowers). It is really the thought that counts.
People are at the core of our business and brand. It is pivotal for us to invest in building up a community and introduce products, services and experiences that can add value to their lives,” says Beh.