On the 13th of April 2020, Richard Wee Chambers (“RWC”) hosted an Impact Webinar on the “Impact of Covid19 on SME and Startups” via Facebook live. RWC was honoured to have Mr. MW Tang from Malaysia Digital Economy Corporation (“MDEC”) and Mr. Inbaraj Suppiah from Pixaworks Creative on board the panel of speakers.
Subsequently on the 25th of April 2020, RWC hosted another Impact Webinar via Facebook live on the “Impact of Covid19 on SME – What is the way forward?”. This time round, RWC was honoured to have Mr. Wayne Lim, Chief Editor of Malaysia SME Journal, as well as Mr. Kenneth Ho from Beamstart on board the panel of speakers. RWC’s very own managing partner, Mr. Richard Wee was present as moderator in both webinars.
SMEs are generally known as small and medium sized enterprises. In view of the spike of Covid 19 and the Movement Control Order (“MCO”) announced by the Prime Minister on 16th March 2020 which has been extended until 12th of May 2020, it is evident that most, if not all businesses are severely affected by this unprecedented, global pandemic. With the drastic decrease in spending power, SMEs have felt the pinch in terms of revenue – leading to pay cuts or even cutting down on jobs, resulting in employees getting retrenched. Majority of businesses are said to have entered uncharted territory with no income – and some unfortunate ones bite the dust when the overhead costs no longer support the operation of the business.
Reality has dawned on us that this unprecedented, global pandemic has brutally impacted the economy – and it would not be too far-fetched to say that we are currently experiencing an economy shutdown as opposed to a slowdown. As John JN aptly puts it, “What had happened is unfortunate, what is going to happen is uncertain”. How then do we move forward from here? What is truly in store for the SMEs and startups in Malaysia?
A monetary system is indeed one that ties the whole world together. Nonetheless it is believed that post MCO, there will be no liquidity in the market – as many will suffer from having no income. Those who are fortunate to have income, albeit significantly reduced will nevertheless hold back on their spending, especially on non-essential products and services. The direct consequence that arises out of this is that money is going to be short in the market. Flowing from this, it is believed that money will no longer be the solution in sustaining the economy. Instead, businesses or even the Government are encouraged to trade by using a trade point system. With the trading system possibly coming into play, we look forward to the day where trade points can be used to pay income tax.
As we proceed into the sixth week of the MCO, it is pertinent to note that consumers who were once reluctant to purchase goods and services online for fear of the risk of online credit card transactions, have now started to embrace digital spending. In order to ensure effective social distancing, consumers have resorted to Grabfood, Food Panda and various online platforms to purchase groceries and their daily necessities. SMEs need to realise that the Internet and going online is now the “new normal”, and therefore there is an avenue for SMEs to survive with the Internet. It is believed that SMEs should start digitalising themselves if they have not – as it is the first step towards going global. Old school entrepreneurs are encouraged to look into migrating their revenue stream to the digital world.
Nonetheless, digital transformation alone does not change the way businesses operate. It is believed that going digital is part of the solution – however entrepreneurs are encouraged to come up with more creative solutions and to seek potential opportunities in a more effective way. Perhaps SMEs can consider finding a business angle to trade digitally with certain parts of the world like Taiwan and Hong Kong that are either less affected by this pandemic, or are slowly recovering in terms of economy.
As the saying goes, “united we stand, divided we fall”. It is believed that SMEs should come together as one in moving forward. SMEs should leverage existing Facebook communities to their advantage – to participate and to discuss on solutions for potential bounce back of businesses. A group relationship and collaborations among SMEs are strongly encouraged in looking at long term sustainability of businesses. SMEs that are slightly larger in size could possibly share about 10 to 20% of their extra lead with the smaller entrepreneurs. Perhaps this is the time where competitors become friends, as some may say. Community assistance is of paramount importance in ensuring that SMEs get right back on track as they steer through unchartered waters.
Many believe that it will take time for everything to be restored to its original position. Social distancing will remain the norm and the MCO will be gradually lifted by stages. It is of course, impossible to come up with a “one size fits all” solution in view that the problems encountered by each business vary accordingly. Nonetheless, entrepreneurs are strongly encouraged to take the lead in moving forward.
Published on April 26th, 2020