FDI companies in Vietnam have consistently played a crucial role in contributing to Vietnam's economy and its growth. Since the authorization of foreign investment in 1988, Vietnam FDI has been pivotal in transforming the country into a highly appealing destination for international investors. The country’s robust growth in securing FDI has garnered positive feedback from […]
FDI companies in Vietnam have consistently played a crucial role in contributing to Vietnam's economy and its growth. Since the authorization of foreign investment in 1988, Vietnam FDI has been pivotal in transforming the country into a highly appealing destination for international investors. The country’s robust growth in securing FDI has garnered positive feedback from […]
We have been dealing with COVID-19, since it was started in Indonesia, and it blows to regional economics, whether it is small or medium enterprises, like empty malls and factories disruptions. The situation will be going on and haven’t known yet when it is over. Meanwhile, the retail business needs to have the strategies to fight the outbreak.
There also needs a government to do a concrete action, so the economy can recover as fast as possible. However, In February, Indonesia announced a Rp10.3 trillion (US$742 million) incentive package to boost the tourism industry through tax incentives and fund transfers to the most-affected regions. While, the second stimulus package is for the manufacturing industry, importers, and exporters that faced supply chain disruption.
Furthermore, Micro, Small, and Medium Enterprises (MSME) are needed to supply domestic industries and consumers, such as local fruits and vegetables as potential substitutes as the scarcity of some imported products may have been sought by the customers.
The Worst Effect on Retail Business
The Jakarta Post reported, MSME Association (Akumindo) chairman, Ikhsan Ingratubun said that MSME sales dropped from 30% to 35% across Indonesia, from February until March 9. He also predicted, the sector would continue to feel the impact for the next three months.
Meanwhile, according to Law No. 20/2008, the small businesses are defined as having annual sales between Rp300 million and Rp2.5 billion, while medium businesses have sales of up to Rp50 billion.
The outbreak has shaved 0.6% points off this year’s economic growth rate in this country. A spa, massage, and reflexology center in Batam regularly would serve from 30 to 50 Singaporean or other foreign customers. But now is a lucky day, if they serve 1 or 2 customers per day.
Speaking more about the outbreak, the woodcarver in Blitar, Central Java, has seen his income drop more than half since last January as the drum workshop where he works is struggling to survive during this time. He used to carve a djembe drum and earned at least Rp900.000 (US$ 63.09) weekly, but now he is barely making Rp400.000 a week.
Their regular customers are mostly Chinese which accounted for more than 90% of their sales, and now they are operating at only 10% of their production capacity to meet local demands. Some woodcarvers chose to go back to their hometowns, because the drum workshop is unable to provide them with jobs.
Rubber factories in North Sumatra closed. Due to extremely low prices in the market, rubber businesses there are closing down as the demands from Japan and China have fallen down. Whereas, these 2 countries are the region’s top export destinations for the commodity.
Chairman of The Indonesian Rubber Producers Association’s (Gapkindo) North Sumatra, Setiawan Khoe mentioned that several rubber factories in Tebing Tinggi and Labuhan Batu are closing down as the outbreak has spread largely. As a result, many workers in the factories are losing their jobs.
Moreover, North Sumatra is well known as rubber exports for 410.000 tons back in 2019, 20% went to Japan, followed by 18% to the US, while 11% to China, and 7% to India.
While the outbreak may last for a while that we haven’t known yet when it’s over, it is time for the companies to step up. Some enterprises have had brilliant initiatives to help SMEs with grants and emergency loans to cope with the economic shocks. Meanwhile, some of them are educating consumers on the importance of self-quarantining to slow the virus spread.
The Measures Need To Fight The Coronavirus
The pandemic impact on the retail industry is undeniable, with stores and offices being closed, and the global supply chain disrupted. As the virus continues to spread, and the business cannot just go on hold, now it is time for the companies to take action and prepare themselves for its impact.
According to retail data company Edited, have noted five strategies that the retail business can implement to minimize the virus effect on businesses.
Maintain an aura of newness
Sourcing stock and generating newness are quite difficult as factories continue to be quarantined, but that will not interrupt consumer demand, so the retail business have to think outside the box.
Retailers can still create an aura of newness and excitement by promoting products they already have, but the customers may have not seen them yet. Retail business owners should be creative with their promo material, such as making the advertisement look more promising and tempting at once. They can also focus on drawing solutions to support work-from-home nowadays.
Get your future assortment right
Getting an assortment right is key to any retailer’s strategy in any industry level scale. But, it is also important to avoid the wrong investment or deadstock,because its consequence could be severe for them in such a scenario.
They should tighten their operations and bring assortments to a minimum while the markets may cancel unnecessary orders. Retailers can rapidly downsize their orders and uplift them again once the market has recovered. If possible, retailers should consider domestic suppliers too.
Reconsider your discounting strategy
Entering the Eid al-Fitr holiday is traditionally a period of heavy discounting, but it is so hard to predict an end date for the current pandemic, and with ongoing uncertainty or delays to supplies. However, retailers are less inclined to want to clear stock as usual.
Retailers also have an opportunity to align themselves more closely with their customer’s needs. Such as, in these conditions, people may need entertainment to cure boredom while staying at home. Retailers can provide things to entertain and support them.
Maintain consumer engagement
During this time, it can be easy to disconnect with customers, whether it is due to tighten purse strings or lower stocks because of the supply chain disruption. But, it is essential in this period to keep your shoppers engaged.
If people have to self-quarantine, retailers can keep them engaged by increasing online activity, such as video sharing social networking service, Instagram and TikTok in which people check on them regularly though. Not to forget, retailers need to expect an increase in home deliveries, so they should promote shipping offers to stand out from competition.
Be honest on your marketing strategy
Retailers should be transparent about the challenges they are facing and the impact that could have on shoppers. These things could maintain goodwill and minimize long-term damage to brand loyalty. Retail business owner should highlight potential delays to deliveries ahead of purchase and have extra customer service representatives if needed.
Before getting into the effect of Indonesian retail business, we should talk about how this outbreak has struck at the core of global value chain hub regions, including China, US, and Europe. Industrial production in China has fallen by 13.5% compared to the last year. It also has an effect on the international production.
This affected the economy, as many production sites closed in order to reduce possible contact between individuals. The significant declines in imports are to be found among products that are used in textiles, electric and electronic equipment. Also, exports from China have declined to all regions across the world.
After all, with the new coronavirus impacting the supply chains globally, and shifting the consumer behaviour on spending, retailers have to adapt, and must assess their response on a daily basis.
The Coronavirus Effect on The Retail Business
The closing factories or slowing down manufacturers, and limiting access to logistics to move goods, all give the disruptions on the retailers business. According to the local news, the retail industry of 7 cities in Indonesia showed a significant decrease in their daily income. Moka, the digital cashier startup reported that 5 cities that have the biggest decline, including West Jakarta, South Tangerang, Depok, Central Jakarta, and Bandung.
Even though there are only 7 cities affected, the percentage of the income decreases in the retail industry is the most significant, if it is compared to other industries. The biggest decline in income is in West Jakarta by 32% per outlet.
Kompas.com reported that clothing retail stores sales fell by 80%, it is because many shops are closed during the pandemic. The Deputy Chairman of The Indonesian Retail Business Association (Aprindo), Fernando Repi added, the groceries sales fell by 45% in the first quarter of 2020, when it is compared to the last year.
From 45.000 SKUs (Stock Keeping Units), it is only 20% contributing to sales. The number of visitors also declined by 50% as the physical regulations have been applied. As a result of the massive decline in sales, a number of retail stores began to carry out efficiencies by cutting their salaries.
Estimating The Impact of Coronavirus on Indonesian Retailers
During this outbreak, Indonesia GDP probably hit as much as -0.5% in 2020, however during the recovery time GDP may be by 0.7%. Its recovery timeline will be debatable. According to the report, economic growth is slowly lifting up in Q2. There are many sectors that got affected by the epidemic. It is indeed directly impacting Indonesia’s economy, especially on lesser exports, potential delay in FDI, and lower tourism revenue.
The overall impact will be c.-0.5% with export will drop the most (c.-2%) followed by investment (-0.6%) and to lesser extent consumption (-0.1%). The sizable impact to Indonesia’s economy is due to the investment and trade activity with China.
Furthermore, the retailers that are most affected are department stores, and then followed by the fashion retails. The closure of several shopping malls in Greater Jakarta has made their sales decrease.
It is somehow different from the supermarket retails, which they can open at any time without depending on the regulations. The supermarkets also sell basic needs, and people clearly shop their groceries on a daily basis. It is no wonder that supermarket retails are now harvesting their turnover during this outbreak.
Since the end of last month, a number of malls have closed or limited their operating hours. Such as Senayan City and Central Park. But, the government fears that the operating hours limitation would give an effect on the revenue of the retails, such as department stores. This could lead to the ability to pay their employees salaries.
They hope that the government once again would give incentives to the retail industry. Giving a tax reduction of PPH 21, or suspension of tax payments, chapters 22-25, and other taxes would be good ways to start though. If both the operational costs and taxes would reduce, the retails industry can survive during this time.
If the retailers do not get the stimulus, the retailers like department stores could get affected. Considering, retails also become the biggest contribution to Indonesia’s GDP, and yet to maintain the economic growth in this industry.
With a lot of things going on, there are ways to minimize the disruption. Let’s check them out!
How Can Retail Business Adapt With The Disruption?
In order to limit the impact of COVID-19, the government and employers advised the employees to stay home and placed controls around both travel and visitor, also stop production and exporting. As the outbreak already has spread globally, retailers should strategize how to protect their workers’ health and support those who became ill. You need to provide clear and consistent communication through your Human Resource Department as well as the travel limitation, so it will ensure the teams avoid making poor decisions.
Monitor Your Consumer Demand
Rewatch the supply and demand plans frequently based on the evolution of the virus, and your consumer’s order, because the demand might occur for certain products. The suppliers for commoditized products are at risk of losing the market, and clients tend to explore on substitute suppliers to get the products.
The retailers must analyze and forecast the effect of COVID-19 on customer demand and the products availability. Prioritizing in-demand products is a must to do.
Evaluate Costs and Contracts
At such this time, retailers may experience increased shipping costs and struggle to meet their financial objectives. Your contractually agreed-upon prices and quantities may no longer be valid. Your suppliers could request the cancellation upon them or otherwise, you need to pass on additional costs throughout the supply chain.
The additional costs related to COVID-19 is an issue of the whole company rather than one department. However, you need to collaborate with your legal team to analyze all suppliers' contracts, and to make sure the company is financially protected against future circumstances.
Furthermore, these three ways will minimize disruption and help to survive the business during this pandemic. We do not know when it will be over, but at least you have a solution to diminish the problems.
Drinking coffee has become a tradition for Indonesians, from those who live in villages to urban areas. The culture of drinking coffee is also indiscriminate from students, workers, and retirees. It somehow triggers people to build more coffee shops across the country. Having a coffee shop business is tempting though because it can generate a lot of turnovers, and gain profit in the end. If you directly purchase at farmers costs only Rp80.000 per kg, while the cheapest coffee sells Rp15.000 per cup. Imagine, how much the net profit you can get a day.
There is no wonder why people have transformed their businesses into a coffee shop business. Unlike the other culinary businesses, the coffee shops tend to sell both its taste and its creative idea. There are many coffee shops that have unique names and interiors. By giving its unique identity, people would remember easily, and they can go back and forth to the coffee shops.
Unfortunately, the ongoing coronavirus outbreak has disrupted the markets, caused mass public shutdowns, and inspired anxiety all over the country. In March, the government reported that many food and beverage industries, including coffee shops, have experienced a decline in sales by approximately 30%, since coronavirus entered the country.
The government also mentioned, if the sales continue declining, there will be much food and beverage industry closing down. The coffee retailers need to prepare for a potential disruption in business. At least, they need to best prepare for the unknown possibility. In addition, they need to consider their obligations, both to co-workers and the community, to keep the public eating spaces as safe as possible. Before getting into the survival kits for local coffee shops, let’s take a look into how bad the situation is during the pandemic.
The Coronavirus Invasion of Local Coffee Shops
According to local news, Anomali Coffee is fast adapting to the situation, as they close down the coffee shop, and instead of serving dine-in, they chose to transform their meals and coffee into the perfect packaging to takeout and delivery. Such as, they provide take away home food, a litre bottle of coffee, and coffee powder to brew at home.
The Ministry of Industry noted that Indonesian coffee sales fell around 50% – 90% during the epidemic. The Minister of Tourism and Economy Creative, Wishnutama urged that coffee entrepreneurs have to learn how to take the challenges and opportunities during and after the outbreak. The purchasing power in the midst and after a hard time would be so different.
The Minister of Industry, Agus Gumiwang added that coffee sales in Indonesia have declined since the physical distancing regulations. Therefore, coffee retailers need to think of alternative ways to bear the industry. The coffee industry in this country is very promising. As the country is 4th largest coffee bean producing, after Brazil, Vietnam, and Colombia. In 2019, the coffee production here had reached 720.000 tons with the export value of processed coffee products of US$ 610 million.
Coffee farmers in Aceh complained about the drop in selling price up to 40%, from Rp10.000 fell into Rp5.800 per bamboo. In fact, there are currently 1.204 small and medium industries that process local coffee beans from local farmers. After all, the government has to take apart to make it survive through the pandemic. If not, the coffee industry would be stuck and have a little chance to remain open. Thus, there are things to do to minimize the effect though!
The Strategies To Survive
As we know it, over the past few years, the local coffee industry had seen a massive surge in popularity and helped boost Indonesia’s economy. However, the current situation with COVID-19 limits everybody’s movement and consequently slows down the growth of every sector of the economy, especially the local coffee industry.
The Ministry of Tourism and Creative Economy has teamed up with Tokopedia to set the campaign, #SatuDalamKopi to unite in helping to support the economy of the local coffee industry. There are around 800 coffee stalls to join the campaign on Tokopedia. The government fully supports the campaign and gives their appreciation for those who are involved. The effort is to maintain the sustainability of the coffee industry, also support the national economy.
They hope the collaboration can help coffee players to keep and expand their businesses. Other than that, the players have to innovate and adapt to the condition and limitations, through the digital platform. With the campaign, the coffee players are now broadening the business and selling coffee online is easier for the consumers. Now, which means by getting your favourite coffee to your doorstep, you already helped the support of the local coffee economy.
Another campaign, called #togoisnotacrime was made by 15 local coffee shops. These are, Ottoman’s Coffee, Amnesty Coffee, Two Coffee Beans, Common Ground, Copper Club, Kavove, Karakter Kopi, Kopi Lima Detik, Lokal, Obar Bali, Pigeonhole, Say Something, Sensory Lab, SOSITI, and ST. Ali. They collaborated and asked the customers to enjoy the coffee while you are at home, and promoted on social media using the hashtag #ngopidirumah (drinking coffee at home). The campaign also encouraged them to buy coffee for takeaway and delivery through Go Food and Grab Food.
These two campaigns hopefully can reassure people that they do not need to go to a coffee shop to drink the coffee, because, in the end, you can enjoy it with the same quality and taste. There are other ways to survive the coffee business too. Your coffee shop can be open, but it is only for a takeout order. However, the takeout order is working well, some people might be getting bored, and want to go outside to buy something. This could be an alternative too.
Offering a ready-to-brew product can fulfil your consumer’s craving. You can sell both its beans and powder, so they can enjoy coffee at home, which is much safer for them. Also, do not forget to throw the promotions, such as providing the coffee package, or buy one get 1 free, or serving a litre of coffee bottle, which you can consume within 3 days.
To believe every coffee shop is somehow unique and has its own place in the market. In the current critical time, it is necessary to support each other for the continuity of the local coffee businesses and to survive together.
As we know, COVID 19 affected tourism globally, with no exception for Indonesia tourism. The World Tourism Organization (UNWTO) estimated that international tourists arrival could decline by between 20% – 30% globally in 2020. This could lead to financial losses in international tourism.
On the other hand, Indonesia already suspended Visa on Arrival for foreigners to curb the spread of the deadly Coronavirus in the archipelago. The move definitely gives an effect to the tourism industry, bringing the same economic pain with other countries, such as Rome, Barcelona and Singapore as known as a magnet for tourists.
The most popular resort island of Bali, where more than three-quarters of the economy is linked to tourism, the outbreak could prove a catastrophe to the country. In fact, over 15 years, young people have chosen the tourism industry for their jobs, imagining the more people could have loose jobs nowadays.
According to Al Jazeera, following a February 5th ban on tourists who had been in China in the past 2 weeks, the foreign tourists dropped 20%. Months before the outbreak, 400.000 tourists from Australia, Russia, South Korea, India, Japan, and more than 100 other countries headed to Bali. Indonesia’s Coordinating Maritime Affairs and Investment Minister, Luhut Pandjaitan acknowledged, the country’s tourism sector has lost an estimated US$500 million due to coronavirus.
The government plans to provide incentives for the tourism sectors, thus they would get back to work again.
How Indonesia Tourism Can Survive?
One of the tour guides in Bali, Mangku Nyoman Kandia, has been a tour guide since 1984, and couldn’t count how many tourists he has taken. He acknowledged, he never prepares for this kind of situation. Many Bali residents make a living from the tourism industry, but with the regulation of staying at home, the residents are struggling. The coronavirus somehow has collapsed the Balinese economy.
On April 1, only four international flights arrived and departed from the airport, around 95% drop compared to last year. Now the bustling vendors already had shut down their stores, also with many hotels and restaurants closed, thousands have left with uncertainty to grab a new reality. Unfortunately, for the Bali residents that got affected are now doing odd jobs or surviving on their savings. Mr.Kandia himself is living off his savings, and sometimes doing odd jobs, such as construction work, sweeping the streets, driving, just to survive.
The donations arrived at the beginning of this month too, they have been given boxes of rice to 500 – 1.000 drivers. It is unfortunate to know that the residents are now living in uncertainty, and hope that the situation would be getting better.
As quoted from the local news, Detik.com, Bali is not the only area that got impacted. The tourist spot, Mount Merapi that is located on the border between Central Java and Special Region of Yogyakarta, got affected too. The jeep drivers that usually take an off-road on a Merapi lava tour, are now shifting their jobs as the farmers.
The vendors in Parangtritis beach are forced to sell their own stuff only to live life. The food stall on the beach has closed since 25 March as a result of the staying at home regulations. One of the motorcycle rental owners has eventually sold all his motorcycles to pay off the loan.
With the current situation, many travel agents have been forced to lay off to their non-permanent workers, such as drivers and office boys. The agents also experienced difficulties to pay operational costs and wages these past two months. If there is no help from the government, many travel agents will not be able to operate again.
The Incentive Plans for Indonesia Tourism From The Government
Indonesia attracted 18 million foreign tourists last year, missing the 20 million target set by Jokowi in the beginning of this year. However, the plan doesn’t seem to be working well, as Indonesia has already lost many foreign tourists due to coronavirus.
Therefore, the government actually has worked hard in helping the tourism sector. By providing 98.5 billion rupiahs (US$6 million) incentives for both airlines and travel agencies, 103 billion rupiah (US$7.1 million) for tourism marketing and promotions, and an estimated 72 billion (US$ 5 million) for social media influencers to promote tourist spots.
An additional incentive of 443-billion-rupiah (US$27 million) worth of discounts available for domestic tourists on visiting one of 10 tourist destinations promoted by the government.
These prioritized tourist destinations are Lake Toba, Bali, Yogyakarta, Malang, Manado, Mandalika, Labuan Bajo, Bangka Belitung, Batam, and Bintan. Moreover, the government will waiver taxes for restaurants and hoteliers located in 10 tourist destinations for the next 6 months.
The state energy company, Pertamina would also cut jet fuel prices in nine destinations for three months starting from March, and it would cost Pertamina Rp267 billion to provide the discount.
Quoted from CNN Indonesia, Jokowi offered social assistance for those who work in the tourism sector. He projected that Indonesia tourism is expected to last until the end of this year, and it could take up to the next year to recover. Jokowi hopes the incentive plans could reduce the layoffs happening for both hoteliers and aviation industries.
The Government Puts Believe on Indonesia Tourism Recovery
As quoted from Kompas.Com, The Minister of Tourism Indonesia, Wishnutama optimises that Indonesia’s tourism will recover soon. As well as UNWTO predicted, it will be getting better by 2022. As the government has already planned the incentive, they also provide financial incentives in the form of loan repayment relaxation to business players in the tourism sector. Giving cash assistance to employees is helping too.
On the other hand, Wishnutama is also preparing other ways to get it recovered. However, he has not shared the details yet.
After all, during the recovery period, unlike other business sectors, the tourism sector will somehow take a longer time to return to its normalcy. The tourists need to ensure that the situation is back to normal and safe to explore around. They will make sure everything is in shape before they travel again. It will indeed take time, but it will get recovered soon before we know it.
The government also believes that the pandemic will end this year, and the tourism industries will be blooming by the next year. People would go on holidays after staying home for a long time, and the whole tourism industries will be back on track once again. The government might also want to learn from Vietnam on how they can curb the pandemic and bring back the tourism industry.
It has been 1,5 months since Indonesia reported its first confirmed COVID-19 infections. Yet, it continues to soar, sending fear, anxiety and concern through the country, especially those who live in infected areas. Indonesian president, Joko Widodo declares COVID-19 is a national disaster. However, he has not locked down the country, yet he applied the Large Scale Social Restriction (PSBB) policy to maintain physical distance. The government sees how the coronavirus outbreak impacts on the Indonesian people and the economy. Many businesses have faced the potential of losing revenue due to the outbreak. On the other hand, the startup in Indonesia have adapted their services for users who are spending time at their homes.
The COVID-19’s Impacts on Indonesia’s Startup Company
The pandemic indeed takes an effect all around the world and almost all industries. This also makes an impact on startups funding. The venture capital firm surveyed 139 investors to measure their perspective on this outbreak. Quoted from Fintechnews.sg, 83% of respondents are already seeing the negative impacts on their investment plans, while 62% expect the startups will take effect of the pandemic for 1 or 2 years.
TaniHub Group’s CEO, Ivan Arie Sustiawan explained that agriculture e-commerce is getting higher on the transactions by 15%-20%. The high demands are for fresh vegetables, fruits, herbs, and other ingredients to maintain the body’s immune system.
The PSBB policy also has affected the P2P lending Modalku. The company said to reschedule payments and to adjust loan services both limit and tenor. Per March 2020, Modalku has transmitted 1.750.506 loans worth Rp13.49 trillion.
What Startup in Indonesia Do During The Pandemic?
Source: www.mime.asia
Last March, Grab, Tokopedia, and OVO donated IDR 1 billion each as a call to the public to fight against the coronavirus together. The donation has been distributed to help supply personal protective equipment (APD) to the medical professionals through the National Disaster Management Agency (BNBP).
A state-owned mobile wallet startup, LinkAja has collaborated with Kitabisa.com to raise money for 55.000 personal protective gears for health workers, including hazmat suits, N95 masks, medical safety goggles, shoe covers, latex gloves, and surgical gloves. The donation will be distributed to five coronavirus referred hospitals.
According to CNN Indonesia last March. In Singapore, the senior leaders of Grab will take salary cuts off up to 20% to mitigate the economic impact of COVID-19 as it rapidly spreads across Southeast Asia. Meanwhile, Grab Indonesia will not follow, but they agree to donate IDR 160 billion or US$ 10 million.
Grab Indonesia is also working with the Health Ministry to provide free online COVID-19 screening service on its platform GrabHealth powered by Good Doctor. The service allows people to check their COVID-19 status by filling out the questions through the Grab application. It will be connected to the doctors 24 hours a day, allowing the users to screen anytime they need. Grab hopes the screening services will prevent the coronavirus from spreading further, as people will not need to go to hospitals, which they already were overwhelmed by the infected patients.
How Are The Startup in Indonesia Adapting To This Pandemic?
Blibli, one of Indonesia’s e-commerce platforms has focused on adjusting the operational services. They practise contactless shipping, and the procedure applied to all their logistic partners. They also maintain product availability by limiting the products at merchant partners.
Indonesia’s online transportation, well known as Gojek, have put social distancing between the drivers and customers for their food delivery services. Grab Indonesia is doing this as well, and the Grab drivers need to take some additional measures to protect their health. Also, their drivers are equipped with face masks and hand sanitizers.
Both Gojek and Grab, especially on their food services have put contactless delivery service and contactless drivers, supported by quick automatic messages on their chat’s feature. This feature is created to remain social distancing and reduce physical distancing for the users. They also suggested their customers use non-cash payments.
How Is Grab Helping Their Users?
Grab Indonesia has teamed up with The Health Ministry to provide a special service for COVID 19 screening. As mentioned above, you can connect to the doctors 24 hours, if you feel unwell or unsure about your condition. With this service, it will help the public to identify their risk level. Once you consult the doctor, he will give you the recommendation in line with the ministry’s COVID 19 protocol to see the result. The online screening also prevents the virus from spreading further, as you would not need to go to the referred hospital.
If using the service, you would receive medical recommendations from doctors regarding your health condition. If your screening is mild to low risk, the doctor would recommend you for a self-quarantine. However, if the results show a high risk, the doctor would suggest going to the nearest hospital. The Health Minister would update regularly the COVID 19 news on its application. The health consultation service on the application is free of charge though.
The Donations From Startup in Indonesia
On the other hand, Tokopedia has opened donations for COVID 19 medical workers through Tokopedia Salam. They have been working together with WeCare.id, BenihBaik.com, Human Initiative, and others. You can also donate while purchasing the items on its application, by giving Rp5.000 from each transaction, it will be donated to the medical workers.
The outbreak surely has hit hard the startups businesses, however, some companies have their potential to be profitable, yet some others are not. Businesses are actually can prepare to survive the crisis by having a Business Continuity Plan. Planning ahead is important for any business, especially in the event of a crisis or a disaster. Business Continuity Plan is essential for managers to drive their companies to overcome hardships caused by the Coronavirus pandemic.
In the event of the spread of the pandemic and social distancing in many countries, offline-to-online shopping is an inevitable tendency. Vietnamese people use e-commerce platforms to buy necessities, hence it can be said that online shopping in Vietnam has become “a habit” during the pandemic. The number of online shoppers increases, so the power of Vietnamese e-commerce changes during the Coronavirus pandemic. The article will help you answer this question.
User behavior has changed: from offline to online shopping
Since the outbreak of the Coronavirus, half of the Vietnamese urban citizens have declined to go outside. Results from Statista have revealed the insight into customer’s perception about shopping and outdoor activities. The participants are those living in three major cities: Hanoi, Ho Chi Minh City, and Danang. The number of citizens visiting supermarkets, grocery, and wet markets reduced by 50% and 45% of participants in the survey stocked more food at home. Additionally, online shopping activities increased by 25% whereas out-of-home consumption occasions reduced by 25%.
According to the research conducted by Nielsen across Southeast Asia on customer behavior, many products are preferred in online shopping. On 19 Feb 2020, online sales for hand sanitizer jumped from 6% to 60%. Other products are also bought more on online platforms including canned abalone, lip care, beauty eye care, base makeup, insect repellent, hot cereal, shampoo, adult diaper, and household cleaner.
Because customer behavior has changed, the shopping tendency is certainly switched and is pointed out in three points: stocking, increase in e-commerce, and the matter of price. First, when the infected-Coronavirus cases rocketed, Southeast Asian markets witnessed “panic buying”. Many people flocked to supermarkets, convenience stores to stock essential items due to the fear of the virus. Second, the power of e-commerce has lifted up as more people turn to online platforms to buy what they need to avoid contacting in crowded places. Third, the price will not be a matter. It is easy to understand. Some items such as face masks and hand sanitizers were quickly sold out, then when sellers increased the price of these products two or three times, buyers were still willing to pay.
So, people have turned online platforms to their favorite “shopping place”, whether the power of e-commerce has changed in Vietnam?
How have Vietnamese e-commerce platforms been changed by the pandemic?
It is predicted that Vietnamese e-commerce will boom during the pandemic because people have the tendency of shopping online to avoid going out to public places. Nevertheless, whether this prediction is true or not? Based on research and study from iPrice Group, Vietnamese e-commerce, in general, see little advantages during the pandemic.
Managers of e-commerce platforms have different viewpoints about if their e-commerce takes benefits or not. VinID saw positive signs because of the rising number of visitors on the website and in the app. Besides processed food, VinID recorded a higher demand for shopping online on fresh food namely vegetables, fruits, and meat. Besides, the application in the ecosystem and discounts on payment have attracted a large number of new clients. Mrs. Mai Lan Van, Director of Marketing VinID, has shared her thought in the interview with VTV that “The number of users shopping and buying online on VinID has increased three times”. With the e-wallet VinID, customers can pay for many categories like buying food or paying water/ electric bills.
Mr. Tran Ngoc Thai Son, founder and CEO of Tiki, confirmed that "Within the last 24 hours, we have received a lot of questions from our customers whether they can use our service or not. We ensure that all activities on our platform will be operated as usual". As a result, customers are capable of shopping with qualified products, fair prices, and quick delivery nationwide".
Tiki ensures two points during the pandemic
Since the mid of February, there has been no case that violates the price regulation on Tiki. Therefore, Tiki is a company that has good management on this issue. In order to successfully supervise online kiosks, Tiki has strictly investigated the quality and price of products as well as fined those who break the rule with the most serious fine of permanently eliminating the kiosk on Tiki.
One more important thing is the health of staff and customers. This is the top priority of Tiki during the pandemic. To operating employees, Tiki is the first e-commerce platform that checks the body temperature for each employee, require washing hands regularly. Shippers under Tiki company are provided face masks, dry hand sanitizers for free and are required to wear masks when they deliver goods and contact with customers.
Besides the two aforementioned points, Tikin encourages clients to use online payment with a view to minimizing the possibility of infecting via money contact.
To sum up, Vietnamese e-commerce has witnessed a switch in customer behavior, from offline to online shopping. People have focused on hygiene and healthcare products such as face masks, wet tissues, and hand sanitizers. Although online platforms are believed to take little pandemic-drive surge, many Vietnamese people, at least, try and form a "new habit" of online shopping. Certainly, Vietnamese e-commerce will grow dramatically post-pandemic and in the upcoming years.
As we are witnessing, the COVID-19 pandemic has put its impacts on every aspect of society worldwide. Economics is also a sector that has severely suffered from the outbreak, almost all of the production and services are crippled and the F&B industry is not an exception. Facing the business pressure of the pandemic, instead of choosing to give up and float, the Vietnamese F&B market witnessed many brands dare to think, dare to do, innovate, and test to survive. They choose to remain fighting, to protect their own brand and their employees. This is also a matter of Vietnamese coffee shops. This article covers how these coffee shops can survive during the crisis then we can see whether their abilities to recover are potential or not.
How are Vietnamese coffee shops influenced by the COVID-19?
Under the global pandemic, almost no industry is out of its sphere of impact. In Vietnam particularly, coffee shop business is one of the F&B industry group that has suffered a great loss due to this outbreak. The decline in the number of tourists, the limitation in the number of residents in crowded places have led to a sharp drop in revenue, while shops still have to pay very high rental costs, which are the main reasons for the big trouble of coffee shops’ owners.
According to the owner of a restaurant and a brand of coffee in District 1, this company has been in a pathetic condition in the season when domestic and international tourists both declined, of which the coffee system sometimes dropped by 50%. customer.
A lot of coffee shop shut down
Meanwhile, the Doha coffee shop at 223 Phan Xich Long, the outstanding culinary street in Ho Chi Minh City, also hangs a sign to stop operating from February 24, even though it was opened on September 9, 2019. This business admitted that the COVID-19 epidemic had an impact on reducing the number of visitors.
According to Mr.Vo Duy Phu, the director of commerce and marketing, The Coffee House, the Vietnamese coffee chain, said the COVID-19 epidemic had disrupted the system's plan to accelerate the opening of 100 restaurants in 2020. According to the plan, right after the Lunar New Year, the chain will open more points of sale, but the impact of the epidemic makes this plan must last into May and the last months of the year.
How Vietnamese coffee shops survive during the crisis?
We have no longer heard any invitations like “Cafe?” or “ See you later at the coffee”. The whole society is conducting social distancing whether it is a crowded city or a small street. Young people tend to visit cafés after a meal at the restaurants or enjoying a movie at the cinema. Thus, the closure of these establishments has indirectly impacted the coffee store chains. So, facing this challenge, the coffee shops owners must find a way to save themselves.
Change the business model
In the epidemic situation, in order to still meet the needs of customers, have revenue but still ensure the implementation of the policy of social distancing, not gathering in crowds, the “giant” coffee shops of Vietnam such as The Coffee House, Highlands Coffee, etc. has shifted to online-home delivery business model.
Highlands Coffee has just announced to halt all services at its stores, excepting take away, as of the end of March 31. During this time, the cafés will only serve for takeaway and online orders via food delivery applications.
Coffee shops change the model of working
Similarly, Starbucks has also temporarily halted serving customers at its stores in the city until the end of the month. The Coffee House has also begun offering home delivery to keep the virus from spreading.
With the F&B brands that have been strong in the delivery segment from before, such as The Coffee House, Starbucks, etc. this is the time for brands to assert the role of the platform, while promoting to make the most of the potential, enough revenue to "stand" through the pandemic.
Furthermore, under the great competition of brands, every brand must have their own measures to attract attention and actively interact with customers. This is the "golden time" for new creations, from attractive deals of brands such as mass discount, hourly discount, combo purchase, earning points, giving drinks, etc.; to new delivery methods such as fishing rods, ordering in front of the gate, ship hotpot and home services, etc.
In recent times, aiming to increase their foothold in the local market, Highlands Coffee, Starbucks, and The Coffee House have accelerated expanding their networks with 240, 49, and 145 stores across the country. While making online ordering available, their performance depended heavily on the physical stores.
Achievements after efforts
The methods of online selling with the promotion and reasonable promotion strategies have brought positive features for some brands. According to CafeF, some coffee brands in Vietnam also increased online sales during this period:
Starbucks Vietnam: Since the end of March 2020 when major cities request to close, Starbucks Vietnam's revenue from delivery has increased by 50% compared to the average of February sales.
The Coffee House: With discount throughout, orders from 50,000 or more are free shipping. Sales of online sales as of March 29, 2020 increased 30% from the previous week, as all The Coffee House shops were closed.
These remarkable achievements are the results of the creativity and flexibility in the online business methods of Vietnamese coffee brands, cafe and milk tea establishments from big to small. In a time when the disease is still unpredictable, the online selling time will still maintain an important role, even after the epidemic, this can become a long term trend caused by the specific changes in customers’ demands.
The role of retaining staff
The pandemic has caused many Vietnamese coffee shops to “reeling” to stay afloat, while many forced their employees to temporarily leave work due to the social distancing and the decline in revenue. The free time has been so long that a large number of staffs may or have to look for new jobs to meet their daily life demands, which is the other leading concern of the shops’ owners. Therefore, the question “ how to retain staffs?” needs to have its answer.
Mr. Phu Vo, Co Founding of The coffee house shared that: “Beside measures to improve the customers’ experience and maintain the online business, we still try to ensure the welfare of employees so that they can have days off but still get paid. Just like that, mutual support is stimulated so no one is left behind. ”
In short, it cannot be denied that no industry is outside the impaction of COVID-19. However, “In a time of crisis we all have the potential to morph up to a new level and do things we never thought possible”. Thus, we can completely believe that Vietnamese coffee shops still keep the business circle running despite any crisis. Hope that the pandemic will end as soon as possible for not only coffee brands but other industries could also come back to their normal status with great business development.
The majority of sectors are affected by the Coronavirus pandemic and the fashion industry is no exception. Consumer behavior in shopping clothes has changed, many international fashion shows have been canceled, clothes shops have been closed due to the national isolation. It is time for owners of fashion shops to come up with solutions to boost sales during the pandemic. This article offers insights into the fashion industry and gives examples of Vietnamese fashion brands in the way they cope with the situation.
COVID-19 drags the fashion industry in the world
Loss in the revenue among luxury brands
According to a new report by Altagama, most nimble brands could experience a decline of $10.8 billion in luxury sales this year. Then accordingly, the whole industry could lose up to $32.4 - $43.2 billion in 2020. A lot of international fashion shows have been called off such as Milan fashion week and Paris fashion week. A famous beauty brand like Shishedo also canceled its event which was scheduled for February 25 in Paris. In addition to high-end brands, popular brands are also suffered from a reduction in sales and revenue. It is because Chinese consumers have driven 70% of global growth in luxury garments since 2012. Now, China restricts the number of Chinese residents to go outside, then their shopping purchase certainly declines.
Negative impact on garment factories
Usually, brands pay money to sewers weeks or months after delivering, instead of paying upon orders. Then, in response to the pandemic, many fashion brands and retailers have canceled and stopped paying their orders, even when clothes or products are made. As a result, garment factories have no choice but to keep and store these inventories and dismiss their workers.
During the pandemic, the employees’ health is the most important thing. It is essential for fashion stores to prepare hygiene items such as hand sanitizers and face masks for staffs, set new working norms, for example, working from home. Moreover, protecting your clients is another top priority. Fashion brands should introduce new processes and policies for customers, namely wearing masks in stores, use dry hand sanitizer before going into the shop, and suggest online shopping.
Have a careful cash management
When the national economy is in the crisis, cash management may help owners have a sufficient budget to run and operate fashion stores. You can set up a “cash control tower”, with representation from both the procurement and sales team to check how much the cash flow reduces.
Review your current inventories and assess the supply chain
KPI in sales is disrupted because of the pandemic, then you had better quick review your in-year buy based on factors including categories, depth, confidence in style and “fashionability” (basics or evergreen items versus on-trend clothes). Some products that have been storing for such a long time, can be on the list of flash sales during the holiday. You can also determine which products can be delayed for the summer or fall of 2021.
Guide to the business continuity plan for fashion brands
Focus on digital channels
If your country requests national isolation, then digital channels are your buoys to sell clothes during the pandemic. The first thing you can do to amplify digital is to restructure and improve your website. Creating a look-like fashionable website will increase customers’ spending time on your web, then surfing around and is likely to increase the buying desire. Furthermore, digital marketing is significant as it not only engages customers, drives customers to your website but it also entices them to visit your stores in the geographic market when stores are reopened.
Interact with customers
Interacting with customers on social media will help them acknowledge that your brands still survive and are ready to serve customers. Additionally, it is also a time for your brands to strengthen your brand image. For example, you can share a story about how your stores keep hygiene during the pandemic, how your warehouse workers stay healthy or how a tube of lipstick can bring joy in the period of chaos.
Comeback: mid-term plan for fashion brands in 2020
When the social distancing is over, besides must-do things, fashion brands need to prepare a medium-term plan to come back and grow after the delay. Here are things you should bear in mind. (This part is referred from McKinsey’s analysis)
Reopen stores and trigger purchasing power
In the spirit of reopening stores, head managers should ensure to safeguard the health and trust of employees and customers. You can decide which stores you will reopen, for instance, certain stores are reopened to serve a more value-oriented customer segment. Furthermore, methods to trigger purchasing power is necessary. First, because of the closure extent, employees may leave your company, then hiring news staff maybe happens. Second, digital marketing should be boosted to invite loyal customers to revisit your stores. The second method can be done by implementing a sale campaign, offering gifts or discounts. Third, compliance with local hygiene requirements. Despite being allowed to reopen stores, the number of infected patients is still being treated, then regulations need to be met such as cleaning practice or store density. According to McKinsey, “consumer behavior and preferences may have changed during the crisis, so forward-thinking retailers will reopen with a new operating model centered around customer engagement and styling.”
Adjust merchandising plan for fall 2020 and spring 2021
Weeks of shutting down have certainly affected the sales and the revenue of fashion brands. After reopening, stores ought to reassess sales data and exchange insights to vendors and suppliers, then adjust a merchandising plan for fall 2020 and spring 2021. Maybe, planning to introduce new fall collections is needed to show how you are ready to provide new items, new stylish clothes after the pandemic.
Example: How does Vietnamese local brand respond during and after national isolation?
MOMOCO
Before the official request of national isolation from the government, MOMOCO had temporarily closed its store chain in Hanoi since 20 March. Although physical stores were shut down, online stores on Facebook, Instagram, and Shopee are still active. Besides, the brand emphasized that a new collection of affordable prices would be published in the upcoming days. This is such a good strategy that helps the brand keep engaging clients to visit their fan page or website on days of social distancing.
MOMOCO temporarily closed stores to ensure the health of staff and customers.
Since 22 March to 31 March, MOMOO offered “Deal of the week 15% off of all items”. This sale campaign only applied for items that were sold online.
On the first of April, many items were off up to 50% - 60%, they were sold at the same price (149,000 VND - 249,000 VND - 349,000 VND). Besides, during this time, MOMOCO also posted related content that focused on specific items to trigger purchasing such as “essential shirts”, “Hazel Cardigan”, and bottom dresses.
On April 10, the new collection named “Everyday is a holiday” was officially launched. The name of the collection was fit with the context of the current social distancing in Vietnam. In the new collection, MOMOCO would like to bring feminine items with lovely and gentle colors combined with striped and gingham patterns. Additionally, for each order from the new collection, MOMOCO would take 20,000 VND to donate the government in the fight against COVID-19. What meaningful action!
Then on April 22, the government allowed shops to reopen, MOMOCO made an official announcement on its Facebook’s page with an assurance of all employees wearing face masks and preparing hand sanitizers in stores.
Even though you are not working in the fashion industry, the business continuity plan is essential to all businesses so, what is the business continuity plan? Let's read this article to understand how to make the plan.
In conclusion, when the Coronavirus spreads to many countries, the global fashion industry are affected. Shops are closed, orders are canceled, garment factories are shut down, then workers face the threat of unemployment without allowance. This is a chain of negative consequences that we can see. In response to the situation, fashion brands should prepare in advance the business continuity plan and implement solutions quickly to keep engaging customers and attract them to revisit your stores. The peak of the pandemic will soon be over then everything will return like its normal pace. Therefore, being ready and be flexible are what managers need now.
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Founded in 2009, Viettonkin Consulting is a multi-disciplinary group of consulting firms headquartered in Hanoi, Vietnam with offices in Ho Chi Minh City, Jakarta, Bangkok, Singapore, and Hong Kong and a strong presence through strategic alliances throughout Southeast Asia. Our firm’s guiding mission is aimed towards facilitating intra-ASEAN investments and connecting investors in Southeast Asia with the rest of the world, thus promoting international business relationships and strengthening inter-nation connections.
