The Edge Featured: Rebooting businesses post-MCO
During these difficult times, most businesses are not even thinking about profits; merely surviving the Covid-19 crisis is good enough.
With the commencement of the Conditional Movement Control Order (CMCO) on May 4, businesses are cautiously reopening as restrictions were gradually eased.
Although most business owners are eager to resume operations, the outlook is still cloudy, owing to weak business confidence and poor consumer sentiment.
And the lack of coordination and cooperation between the federal and state governments on the implementation of the CMCO has not helped the situation.
A walk around 1Utama Shopping Centre last Wednesday showed that 60% to 65% of shops were open. But the mood was sombre, and the atmosphere was not unlike that at certain deserted malls.
Over at KLCC last Thursday — Wesak Day and a public holiday — most shops were open but the crowds were clearly missing although there were a number of people browsing in a bookstore. Not surprisingly, the supermarkets had more patrons.
In restaurants open for dining, their capacity was markedly reduced to ensure a safe distance between tables. Before entering any shop or restaurant, even just to buy a loaf of bread, temperatures and contact details of customers were taken.
As we adjust to the new normal post-MCO, what’s next for businesses?
Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai acknowledges that the pandemic has created uncertainty and affected consumer confidence. As a result, consumer spending patterns will change in tandem with the new normal as people become more cautious.
“We expect the post-MCO period to be slow in general for most industries, especially those that have not been in operation since March 18. Many may need to rebuild their businesses by reconnecting with customers and suppliers to make up for the loss of time and business,” he tells The Edge.
Soh says the FMM was one of the 59 organisations that submitted a joint declaration to support the government’s decision to allow a major part of the economic sector and businesses to resume operations under the CMCO.
He, however, admits that there are concerns among employers on carrying out their commitment to ensure the safety and health of their employees.
“Employers are cognisant of the risk of their employees being infected and the possibility of the spread of the virus to other employees. Some of the recommendations under the new normal may not be easy for employers to implement immediately and would need time and planning,” says Soh.
In order to minimise the risk of infections at the workplace, he urged companies to strictly observe prescribed standard operating procedures (SOP) during the CMCO, including the use of personal protective equipment (PPE), social distancing, regular sanitisation and disinfection.
Lack of coordination disastrous
Malaysian Employers Federation (MEF) executive director Datuk Shamsuddin Bardan says the lack of coordination in implementing the CMCO has led to uncertainty and misunderstanding, especially for companies that operate in several states in the country.
“I would say this is a disastrous situation for us. Some companies can operate, some cannot operate. All this confusion could have been avoided. Malaysia is such a small country; we can’t afford to have this kind of inconsistencies. That would give a wrong signal to investors, be they locals or foreigners, who are watching the situation very closely,” he tells The Edge over the phone.
Shamsuddin says state governments should accept and support the federal government’s decision, considering that most employers are very keen to resume operations.
“State governments may make some minor changes here and there, but it should not be a departure from the CMCO. That should be the message being sent to businesses.
Unfortunately, that is not the case at the moment, and hence, some employers in certain states are still confused. And because of the confusion, they would rather not operate,” he explains.
Shamsuddin adds that politicians should set aside their political differences for the time being, for the sake of putting things right.
“We shouldn’t politicise the reopening of businesses. If we are indulging too much in politics, it is difficult for us to move forward. Let us now talk about rebuilding the nation and the economy. At the end of the day, if the employers do not have money to pay employees, where do we go from there?” he asks.
Oceanflair Group founder and CEO Navindran Karunakaran is of the view that without a vaccine, there will be anxiety and fear among the public, which makes jumpstarting the economy challenging.
“We need to send more positive messages to help Malaysians regain confidence and go out again. Having said that, I believe we should be able to bounce back pretty fast, because generally, our culture is that we still like to go out and meet people,” he says.
Navindran, who operates four F&B outlets — Vin’s Restaurant and Bar, Manja KL, Velvet Lounge and The Food Company — says post-MCO, businesses focusing on the premium and high-end markets may find it more difficult to recover.
“People will become more price-sensitive, because their spending power is lower. Everybody will go down a few levels.”
Navindran suggests that Malaysia launch a huge “buy local” campaign to help local small and medium enterprises (SMEs). This will save businesses and jobs and protect the people’s wealth.
Healthcare supplier LAC Medical Supplies Sdn Bhd director Liew Yoon Poh concurs that business and consumer confidence post-MCO is definitely not encouraging.
“Many businesses are forecasting a gloomy 2Q, 3Q and 4Q. SMEs are bleeding indefinitely and have no vision of how long they have to sustain losses. [If the government can afford it], another stimulus package or fiscal policy booster will be helpful to spur the economy,” he says.
Although the decision to reopen businesses under the CMCO is welcomed by the SMEs, Liew says the guidelines and conditions should be made clearer.
“We fully understand that we do not want another wave of Covid-19 infections in the country and are willing to abide by the measures recommended by the government, but we are confused over the different instructions by various government agencies, and now even state governments,” he says.
Liew adds that an alignment of the objectives of these agencies is crucial to allow businesses to operate while ensuring that the public’s health is protected.
“We suggest having one authority or agency to issue directives so that there will be minimal confusion. The state governments and federal government should communicate and agree on steps and measures before making public announcements,” he says.
Brand strategy design consultancy firm Brand Soul Consultancy Sdn Bhd founder Stella Wong points out that her top priority right now is to continue engaging with clients via various digital platforms and offering services in branding and marketing, without laying off anyone from her team.
To increase business confidence, says Wong, business leaders must take full advantage of new technologies such as remote work software and online business platforms to boost resilience and ensure business continuity.
“The Covid-19 pandemic may have affected many of us in business, but those who can react fast to the challenges and rebound quickly are set to reap the benefits when this storm has passed,” she says.
Meanwhile, Ng Han Che, the owner of a mobile gadget store in Setia Alam, Selangor, says his priority is to break even this year.
“Our sales will remain slow, at least until July. Hopefully, our revenue is still enough to cover our fixed costs, which are about RM30,000 every month. I don’t even dare think about making profits now,” he says.
Before the MCO, his shop was open from 11am to 10.30pm. Currently, under the CMCO, its operating hours are 10am to 8pm.
“This could be a problem for us because customers usually visit our shop after they finish work and dinner. In other words, our peak hours are between 8pm and 10pm. Now that we are required to close shop after 8pm, our sales will surely be affected,” he says.
Ng adds that the business environment will remain very challenging because mobile gadgets and accessories are not essential products. “When the economy is good, many people want to buy new smartphones and gadgets. When the economy is bad, people are less willing to spend,” he points out.
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