How Can SMEs Adapt in the New Norm?
The new norm has caused the world to be ‘digital by default’. While this has been a no-brainer as far as pivoting a business goes, the question is, what could this look like for SMEs in Malaysia?
With Malaysia now well into its Recovery Movement Control Order (RMCO), most businesses have resumed full operations. This has been good news for the SME owners (some of the hardest hit during the MCO). However, the outlook remains cloudy with lowered consumer confidence and spending power at play.
Let’s take retail for example – you will find shopping in a mall like One Utama is not the same as before with 20-30% of the stores still shut, people queueing in line just to get into stores, and limited customers in restaurants to keep to the social distancing SOPs of the day. Hair salons may have resumed operations, but are they prepared for a second wave of infections?
Naturally, the pandemic has sparked the rise of e-commerce and digital marketing. However, 89% of SMEs in Malaysia are in the service industry which relies heavily on face-to-face interactions.¹ And despite the funding that the Malaysian government has put aside to support SMEs, there was still a sharp drop in revenue with 56.56% of businesses reporting zero revenue during the MCO.² Given that SMEs contribute 38% to the nation’s GDP and provide employment to 65% of the workforce, the survival of SMEs is crucial.³
Tech is vital for SMEs to survive
Digital transformation has been in vogue for the last decade. But the question for most organisations big and small has been: how exactly do we implement this successfully across business functions, and in the most cost effective manner?
SMEs can benefit from the increasingly wide range of online tools to support digital transformation such as digital marketing tools like Facebook ads and automated payment platforms like Ezypay. This is happening across the board. For example, restaurants are now implementing QR codes for access to digital menus or on receipts to obtain customers’ feedback. More restaurants are also partnering with food delivery providers such as GrabFood and FoodPanda. Grocery stores are installing self-checkout counters to reduce human contact with customers. For business-to-business companies, we’ve seen a rise in webinars and online training sessions equipping struggling brands and individuals to get a better grasp of their own branding effort while marketing their own expertise.
But the overall breadwinner of tech providing a promising future for SMEs is the potential of artificial intelligence (AI) during these tough times. And no, you do not need to break the bank to benefit from AI. Big private corporations like Huawei and Microsoft have partnered with government and non-profit bodies to help drive SMEs further into digitalisation. There are even a few AI startups in Malaysia that need the support of other SMEs too such as Fraudlabs Pro which focuses on protecting online e-commerce stores from fraud and Hyperlab that can help install chatbot tools.
There are many uses to AI for businesses in the insurance, finance, creative, and other various industries: to provide multilingual online chatbots and service assistance for a more automated and holistic customer engagement; paired with machine learning, AI can help companies make sense of big data for predictive analysis on trends and opportunities; it is also a great tool that complements digital marketing initiatives to learn more about customer behaviours.
Product and service diversification
(1) The shift towards online shopping and transactions has been a huge boon for businesses in maintaining cash flow even at the peak of the lockdown.So if your business has not opted to make the switch, it’s time to reconsider it. But it is not a one-size-fits-all solution. SMEs must understand their product offerings before determining the platforms suitable for expanding their businesses. It’s not about the number of platforms that your products/services are available on, but the relevance of these platforms for your products to meet your target consumers.
For example, online marketplaces like Lazada, Shopee, and Zalora are well-established platforms for startup clothing brands because of ease of setting up shop online. There is no need to deal with the hassle of launching a website and having to constantly manage the back-end for updates because everything is done for you on e-marketplaces. In addition, it is also a great opportunity to leverage on their existing customers on these platforms versus having to develop the marketing funnels to drive a new audience to your website.
(2) With changes in consumer/client priorities, one of the areas that businesses may need to pivot is their product/service offering itself. To ensure that what you are offering is still relevant and providing value to your prospects, analyse your product and service offerings, then think about your customers’ needs and how you can meet them strategically and realistically. For service providers who depend on face-to-face interactions, think of ways you can productise your offering both in-store and online. As an example, the medical aesthetics clinic, Lyfe Clinic not only provides medical aesthetics services, they also sell some of the best face care and oral supplement brands on their website. Consulting companies, on the other hand, can offer training services in the form of pre-recorded webinars as a way to not only market their expertise, but create funnels towards a productised offering such as tools and templates made available to prospects at a fee. This can be a great way to generate a new stream of passive income even if another MCO takes effect.
Learn more about your customers
If your business is already diversifying its offerings and platforms, and utilising tech to manage marketing campaigns, that’s great! But these efforts cannot serve as standalones to yield optimal returns. Combining tech and the diversification of your business’ offerings with data analytics is another vital asset for companies.
Leverage on the slew of data analytics tools available to collect, aggregate, and analyse your businesses’ data from marketing, sales to customer service and from there, derive useful insights on your customers’ ever-changing needs in real-time.
Organisations like Oracle and IBM have made their data analytics tools available on a ‘freemium’ model for SMEs to start experimenting with these tools without incurring costs. Other online data tools like Google Analytics are a great way to start merging data trends with your business strategies. These key data points can not only optimise efficiency of your operations, but also enhance customer experience and provide support for strategising future business plans or roll-outs.
With the right data analytics tool, companies can understand more diverse product and service opportunities out there and determine the best technological strategies to support their expansion initiatives.
There’s a brighter road ahead
Yes, our industries and consumers are riddled with uncertainty, but the good news is, you do not have to worry about being ‘late in the game’ anymore because businesses big and small are all having to pivot anyway. In a sense, there is now a level playing field, which means there has never been a better time to make the bold move towards digital. We’ve already seen the bloom of Facebook and Instagram live sessions, brands leveraging on TikTok, and online marketplaces — anything is possible.
And best of all, if you’re willing to react, adapt and keep up, there are plenty of resources out there to help your company get started in your journey towards digitalisation. So, are you ready to get ahead in the game?