SURVIVE NOW, THRIVE LATER: LIFE BEYOND THE PANDEMIC FOR THE SME RETAIL SECTOR

Innovate or die - a common concern observed throughout the effects of the Movement Control Order (MCO) in reshaping the business landscape.

- SHARON CHANG

Small and medium enterprises (SMEs) took the hammering -- some reported a drop in sales as much as 90 percent -- with restrictions to operate brick and mortar stores, interstate travel, and all sorts of social events, creating financial strangleholds in the retail industry.

As Malaysia SMEs are in a precarious situation – seeing zero cash flow -- abandoning their once tried-and-true methods of conducting business and, instead, adopting a new strategy could be the only way to survive this new normal.

Predominantly, business owners must be prepared to expect that their customers will not be visiting their stores as often as they used to before Covid-19, says Vernon Chua, Co-Founder and Chief Executive Officer of Innergia Labs. This decline in footfall traffic is going to weigh heavily on their sales and therefore their cash flow.

Going digital is key – more so amid the prolonged pandemic. Chua believes that for business survival, business owners need to repurpose their communications and marketing through online channels and messaging applications to engage with their customer base.

“Generally, there are businesses who just hanker down by reducing costs and preserving cash flow to ride out the storm,” Chua says in a response to a question. Though it might seem to be a valid strategy as survival may perhaps be their main objective, however, if all they did were cut pays, shut down outlets and negotiate for lower rentals while waiting for the government’s stimulus package to take effect, it will be an opportunity lost to grow their business.

Hence, businesses should gear towards building their online presence and fine-tune their branding, Chua points out, to have a higher chance of survival and thrive when the economy recovers.