How to adapt your business during this time of crisis
Written by Jack Zhang, CEO and Co-founder of Airwallex
By now, all of us have been impacted by the COVID-19 crisis in one way or another. It has brought a global economic shutdown, and with it, a great number of businesses, especially small businesses, are struggling. Many are still coming to terms with the severity of this crisis and its long-term implications while figuring out how to survive these unprecedented challenges.
However, I hold the firm belief that any setback also presents an opportunity. Looking back at the SARS outbreak in early 2000, this event accelerated the adoption of e-commerce in China. Companies like Alibaba and JD.com adapted to this crisis and emerged stronger than ever post-SARS. Today, these two companies are the biggest e-commerce companies in China.
Even in China today, post COVID-19, we have witnessed a sharp impact on traditional industries that have been affected by self-quarantine measures such as mining, manufacturing and traditional retail. In contrast, we have continued to see e-commerce thrive and I truly believe this shift to digital and online will continue even after the lockdown ends, life normalises and shops reopen.
It is therefore crucial for businesses to adapt now and capture some of these consumer behaviour shifts to not only ride out the impact of COVID-19, but be even better positioned after it ends. Here are my thoughts on how businesses can adapt to changing economic conditions.
1. Deliver your product through digital channels to meet the new demand
Businesses that traditionally have been reliant on physical locations and on-site staff can continue to keep their doors open by leveraging digital channels to deliver their products or services. It is now easier than ever to take your business online through e-commerce platforms like Shopify or virtual meeting tools like Zoom.
Some companies have already proactively looked ahead and made significant changes to meet these shifts. For example, Pokéd, an Australian restaurant with nine stores across Melbourne and Sydney selling healthy Hawaiian-inspired poké bowls, lost its business crowd in usually high-traffic CBD areas when companies started to work from home. To adapt to this new environment, they have since focused on building an online store to deliver ready-to-cook poké meals in packs of ten and at a discounted cost for the bulk purchase. They are already seeing the benefits of this shift through higher value transactions and lower fixed costs.
Gyms and fitness centres are also adjusting to increased digital consumption. A number of gyms are now creating online workout content or holding online coaching classes on Facebook Live or Zoom to keep their members engaged.
2. Increase your customer base quickly by tapping into online communities and marketplaces
Over the last few years, the number of online marketplaces has exploded due to the convenience and variety they offer to consumers. Participating in these marketplaces can also be a great way to super-charge your customer base during these times, as they can generate mass awareness and access to a large global customer base quickly.
Examples of these are food and beverage platforms. F&B outlets and restaurants are increasingly getting online into marketplaces such as UberEats and Deliveroo. Although they may make a lower profit margin per order, the benefit is that they can access larger volumes of orders very quickly.
In a similar manner, physical retailers who no longer see in-store traffic can stay in business by setting up an online Amazon or eBay storefront, immediately making their goods available to customers all around the world.
Facebook communities are also a powerful way of communicating with targeted groups of customers. For example, a business selling musical instruments can look up musician communities on Facebook to sell directly to their target audience.
3. Adapt your pricing model to access cash flow and ensure customer loyalty
Every business in this environment is struggling for cash. Creative ways to unlock cash flow will be critical for businesses during this period. One way to do this is by offering a discounted price for a long-term subscription to a service or product.
A great example of this is the Malaysian arm of low-cost carrier AirAsia. They have launched an Unlimited Pass that allows unlimited travel across certain countries for a year, at a price of RM$499 (approximately $190 AUD). A low-cost deal for unlimited travel will attract customers to purchase with AirAsia in a time when no one is travelling or buying flight tickets, helping them with their cash flow. It also means that customers will choose AirAsia when borders open up again, driving customer retention.
Whether your company is offline with limited ability to offer a service right now or a technology subscription service, think of ways to be creative with your pricing to unlock short-term cash flow while ensuring customer loyalty during COVID-19 recovery.
Each business may be facing a different situation, and there is no one-size-fits-all answer to responding to the epidemic. However, my encouragement is for businesses to continue to adapt and accelerate in whatever ways they can in the current environment.
For any offline businesses, look for ways to shift your business online wherever possible. For those businesses that are already online, look for ways to scale even further by tapping into online communities and marketplaces. While your business may be sailing through unchartered territory right now, I hope that implementing even a small amount of these recommendations will land you in a much better position post COVID-19.
Ready to scale your business with Airwallex business account? Get more from your spending with our free multi-currency virtual cards. Open a foreign currency account with us and say goodbye to high foreign exchange rates and bank transaction fees. You can make international money transfers in multiple currencies, in one business day or less.
Related article: Constant product innovation is critical to finding market fit
Our products and services in Australia are provided by Airwallex Pty Ltd ABN 37 609 653 312 who holds AFSL 487221. Any information provided is for general information purposes only and does not take into account your objectives, financial situation or needs. You should consider the appropriateness of the information in light of your own objectives, financial situation or needs. Please read and consider the Product Disclosure Statement available on our website before using our service.
How businesses are using embedded finance to stay one step ahead
Freight forwarders vs third-party logistics: What's best for your...