The contributions of small and medium enterprises (SMEs) to our nation’s economy cannot be understated. SMEs in Malaysia represent 98.5 per cent of registered businesses in Malaysia and employ 70 per cent of the country’s workforce, and the severity of the COVID-19 impact on local businesses has been unprecedented, resulting in stagnant cash flows, burdening repayment capabilities and heightened risks of bankruptcy.

Despite the adverse impact to health and the economy, COVID-19 has also been a game changer in accelerating digital adoption in the local business community. We have seen both small and big businesses, as well as the public sector, re-strategise and invest in more integrated digital infrastructure to manage current and future disruptions.

We have reached a tipping point, and eCommerce is here to stay. In last five months, new entrepreneurs and SMEs on our platform grew by more than 200 per cent, even as Malaysians increasingly look towards digital solutions for their everyday needs, and we expect this trend to stay. As lockdown measures eased in Malaysia starting last month, one significant shift we’ve seen is that demand and popularity of our grocery category continues to remain strong, and has become one of the Top 3 categories on our platform.

We believe there will be further acceleration in the digital transformation of SMEs in the retail sector, with the pandemic encouraging more people, young to old, to try and experience online shopping. This increased adoption of online shopping is an additional impetus for retail service industries to integrate online and offline shopping, and digitise their supply chains.

It is clear that the pandemic has been a catalyst for our local SMEs to digitise their business, and has cast a bright light on the absolute need for digital transformation at an accelerated rate to remain sustainable in the long-term, diversify their revenue stream and capitalise on Malaysia’s growing digital economy.

As we move from reeling to reflecting on the disruptions, what are some of the key areas that SMEs and the larger business community need to consider to recover, thrive and flourish in the post pandemic era?

Here are some of my reflections.

Foster resilience by embracing public-private partnerships

Governments all over the world are stepping up efforts to protect people as well as small businesses and their livelihoods. In Malaysia, the government has been generous with its slew of measures via the PENJANA initiative, and one key incentive is the RM70-million economic stimulus package for micro and SMEs.

While efforts spearheaded by the Malaysian government are a step in the right direction, helping SMEs to thrive in this “new normal” will require large corporations to work hand in hand with the government to kickstart economic activities.

It is an unshakable responsibility for companies like us to empower local SMEs to be more resilient, such that they can diversify their revenue and be focused on their business while worrying less on online security, technology, and online operations where we offer strong support.

Our Pakej Kedai Pintar is a RM10-million stimulus package to assist over 50,000 local SMEs digitise their business, stabilise jobs and support the country’s economy. The effort was introduced in April in tandem with the government’s economic stimulus mission and pledge to support e-commerce entrepreneurs and SMEs.

We also reached out to our agricultural-based business community and onboarded the Cameron farmers and prawn harvesters, who traditionally do not have a digital presence, and had to resort to disposing their crops and catch due to supply chain and operational issues. Today, these agricultural-based small businesses continue to grow and thrive on our platform.

Given their crucial role in our nation’s economy, and the vast numbers of businesses and jobs dependent on them, helping such SMEs with their shift is our collective responsibility.

SMEs need to be adaptable and agile in the “new normal”

Adaptability and agility will be key factors for entrepreneurs in the post-pandemic era. Despite the unprecedented struggle the local economy faces, we have also observed businesses which have weathered this storm, and have been able to pivot by adapting to the changing needs of the “new consumer”.

Take for example the experience of Dylan, who owns the restaurant chain Salad Atelier and opened a store on Lazada [recently]. Dylan decided to diversify his business from offering just in-outlet dining (which was prohibited during the MCO) to food delivery, which was seeing exponential growth during the MCO period. Leveraging on Lazada’s logistics capabilities and large consumer base, Dylan’s team was able to adapt and create an additional revenue stream for his business which continues to thrive and grow today.

Entrepreneurs will need to think outside the box, and continue to augment their value proposition to remain relevant and sustain during this post-COVID era; whether that means changing their product offerings, shifting to online sales or collaborating with industry peers to expand their reach.

Remaining nimble for the foreseeable future is a priority. We have seen how quickly things can change, and as consumer behaviour continues to evolve, SMEs will need to adopt this newfound agility as a core characteristic of its business model.

Invest in Digital Solutions and Technologies

Our synergies with the Alibaba economy have allowed us to support and expand local entrepreneurs and brands on our platform to capitalise on these cross-border trade opportunities. Safi, a popular local skincare brand on LazMall, recently made its debut into the vast Chinese market through Tmall Global, through our “Sell to China” programme.

The business landscape today is dynamic and has now evolved to become a borderless marketplace where new opportunities abound. It is therefore important for businesses to equip themselves with appropriate digital solutions and technologies to not only optimise operational efficiency and cost, but also grab the opportunity to expand into new markets.

Although it is hard to predict a recurrence of the virus and the lasting impact of this pandemic, the future we now envision is one where people and businesses are prepared and enabled through technology. This is the brave new world we will have to create together, and now is the time to for us to empower and work with entrepreneurs to help build it.

-- BERNAMA

Leo Chow is Chief Executive Officer of Lazada Malaysia