Since the Covid-19 crisis stroke the world, including Singapore, made the country have to deal with fatal that blows the businesses. As quoted from the news, Singapore is heading towards its worst-ever recession in nearly two decades. The country’s economy continues to feel severe strain from the pandemic, which has infected 32.343 people there.
The GDP of the country is expected to shrink between 4% and 7% this year, it’s down from the previously projected range of a contraction between 1% and 4%, according to the Ministry of Trade and Industry (MTI).
Some sectors have been severely affected, such as construction, marine, and offshore engineering. It is because there is a manpower shortage due to the outbreak of infections among foreign workers, especially those living in dormitories.
Based on the Accounting and Corporate Regulatory Authority (Acra), in the first three months of this year, there were 239 companies going into liquidation which means a process where the company’s assets are seized and sold, with the proceeds used to pay off its debts and liabilities.
Prime Minister Lee Hsien Loong acknowledged that the economy is weakening due to Covid-19. The aviation and tourism sectors are down, while the gig economy work is evaporating and the rest of the economy is being disrupted by supply chain catastrophe.
The numerous people who will lose their job this time will be much higher because a lot more people are working in the F&B, retail, airline, and hospitality industries, which are hardest hit by the outbreak.
Based on The Straits Times, Restaurant Association of Singapore (RAS) president Vincent Tan told that one-third of the 12.000 restaurants in Singapore could close in the next three months if the situation remains the same or worsens.
The last time Singapore went into recession was during the Asian Financial Crisis back in 1998, which brought economic growth down by 2.2%. Nowadays, The Monetary Authority of Singapore (MAS) has confirmed that Singapore will enter a recession this year, due to uncertainty over how long the economic downturn will be.
Apart from the disruptions, Singapore must be ready to rethink their business model in order to adapt to the Covid-19 crisis. Many people suggested that Singapore’s business is facing the biggest restructuring this year, and preparing to thrive in a post-pandemic economy.
How Singaporean Companies Adapt To The Crisis?
The retail sector in the country had declined in shop occupancy rates, it happened even before circuit breakers kicked in. The vacancies rose to 8% in the first quarter, up from 7,5% in the previous quarter.
Back in March, Singapore’s retail sales also suffered the biggest plunge in 22 years, with necessary items like clothes and footwear taking the most severe hit.
However, there are some bright spots emerging today. For example, Mothercare, a specialized British retailer for mothers, mothers-to-be, babies, and young children, has gradually developed in Singapore.
At the beginning of the circuit breaker which was in April 2020, Mothercare’s overall revenue has declined 70%, but its online sales have more than quadrupled compared year-on-year. The retailer with 11 outlets in Singapore, also made an interesting transition from a physical store to an online entity.
Beyond having a website, Mothercare Singapore has a digital nursery advisory that provides an expert to help on various aspects of being motherhood, from maternity to birth and after, and the relevant range of products that aid a new mother’s journey. The customers can book an appointment online and ask about coaching, consultation, and perks.
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The Singapore chain is now thinking of scaling up, and some of them have partnered with Lazada, a dominant e-commerce platform. For instance, RedMart, the e-grocery unit of Lazada that has been providing the ease of getting daily essentials, such as food staples, paper products, and cleaning supplies.
The Covid-19 pandemic has eventually shifted more consumers to online and increased the adoption of e-commerce into sellers’ business strategies. It has also forced the business to push its capacity to meet the demands of online grocery shopping.
However, the consumers will be likely to continue their habits to shop online for their daily needs even after the pandemic.
Furthermore, the furniture store Scanteak also moved into online sales during the pandemic. The store is riding on its projection that people will need furniture when they are mandated to work from home.
Many F&B joints are closing down, from Italian bar restaurant Jekyll and Hyde to Japanese joints Hashida Sushi, and not forget to mention, Hawkers is also on the list.
The Hawkers, where many stalls that sell a variety of local and Asian cuisines got affected by the pandemic. Singapore’s beloved hawkers are the vulnerable group of the crisis, and it was the reason hawker Melvin Chew created the Facebook group Hawkers United – Dabao 2020.
The Facebook page allows hawker stall owners to inform diners about their offerings, promotions, and takeaway or delivery options. Diners can also join the group to pre-order food. The group aims to be a one-step easy way for the public to search and order food online. Thus, it is the way to keep supporting their favourite stalls while staying safe.
The fitness sector, gyms, and studios also have the alternative to keep providing a session for exercise. Boom Singapore, a boxing exercise provider, was quick to adapt. It offers live Zoom packages and a subscription to archived classes with a few membership tiers. Sign-up has been made easier with a walkthrough video on Instagram.
Lululemon, a yoga apparel company, also has shifted towards partnerships with ambassadors and fitness professionals to equip digital classes in yoga, pilates, dance, and more. They implement engaging content, so customers will return each day online and see themselves as part of a specific group.
The fitness sector has been forced to adopt a new business function out of necessity. It has a value proposition to customers, and they can build a community.
In conclusion, the Covid-19 crisis has made the companies have endless possibilities to grow new opportunities, shift the new business model, retool themselves, and reorient their people to take up new tasks. There is a commonality between all the sectors, and that is Digitalization, which allows them to reach the customers instead of waiting for them to come to you. Imagine, if the sectors couldn’t adapt and switch their businesses into digital, they wouldn’t stand a chance in the crisis.