Commerce in times of SL turbulence
Sri Lanka has suffered much in the last few weeks, from the Easter Sunday attacks to this week’s unfolding situation with mob attacks on minorities. Typically, such terror attacks have an immediate short-term impact on sectors such as tourism and investment. But if the security establishment is able to quickly identify and address relevant causative factors, such incidents become isolated or even one-off. However, in a context where there is continued violence, the impact of the current incidents on the economy becomes far worse, and recovery takes a much longer time. I believe technology can play a role in mitigating the consequences that are a product of these turbulent times.
Technology E commerce has become a viable alternative to purchase goods and service, and the data that we have gathered at Takas. lk over the past few weeks supports this. Post the Easter Sunday attacks, we at Takas. lk expected next to no sales in the given context, both short to medium term. However, while we experienced a slowdown of approximately 20-25 per cent on the number of orders we received, the momentum on e-commerce continued, and has continued to this date.
Even more surprising was the fact that during the month of May, Takas did not run any promotions due to recurrent social media black outs; whereas May is usually the period where we do most of our promotions.
The reason in hindsight is quite simple. Given the current security context, and the fact that shops are closed, Sri Lankan residents have been incentivised to shop online or gain services. Consumers were afraid, or not capable, of accessing products or services either for security concerns or due to travel restrictions. Consumers were thus simply no longer incentivised by discounts. They needed either a product or service accessible to them from the security of their home or office.
Take-away for business in the current context
Prior to the attacks, the Government succeeded in stabilising the economy, thus creating a robust foundation that enabled the economy to better withstand shocks of this nature:
Inflation reduced to 2.9 per cent in March
Trade deficit recorded in February was the lowest monthly deficit in over 5 years Currency appreciated to 4.5 per cent thus far in 2019 – which is the 3rd best performing currency globally this year. Exports and FDI reached all time highs in 2018
From a macro-economic perspective, this will mitigate some of the risks associated with continued turbulences.
However, the key takeaway is: Embrace app-based technology (such as for banking) and eCommerce.
Consumers who relied more on traditional shopping channels, now have more incentive than ever to use products such as; Apps (banking or services), Takas, and Uber Eats to either get services/ product/ meals while mitigating security risks that concern them. Consumers who are already buying online will continue to do so. These consumer purchases are thus no more driven by discounting or marketing only.
Steps to be considered by the government
While, from a macro- economic standpoint, a lot of work has been achieved to stabilise the economy prior to the Easter attacks, the need of the hour is to provide security to all citizens. Regaining security will enable to rebuild confidence in the economy, and with that recovery should take a shorter time.
Restrictions on social media
While it is understood that regulating social media is needed in times such as this, the blanket restrictions on social media has to be removed in the short to medium term. The main reason for this been an economic one. Most Business Process Outsourcing (BPO) use social media to do their day-to-day business, such as WhatsApp messenger.
If the tourism sector is to recover apps usage, platforms such as Instagram also have to be allowed with immediate effect. Instagram is a powerful tool in communicating to the rest of the world that things are returning to some form of normalcy in the island post the attacks, with the hopeful control of any riots.
Summary
Even in the darkest hours there are opportunities. What we have experienced as a company is an indicator for viability of eCommerce/ Technology B2B/ B2C for both product and services to add value to a consumer life while at the same time adding to much needed cash flow and growth. It is up to us to now take a lead and take this forward.
(The writer is CEO and Co-Founder of Takas.lk, and a Non–Executive Director of People’s Bank. The views expressed in this article are his own and do not necessarily reflect the opinions of the organisations stated above. He can be reached on Lahiru@takas.lk for comment).