While we end the 1st quarter of 2020 and embark on the 2nd quarter, the whole world is in the midst of a pandemic which has caused unprecedented disruption to business since the end of the 2nd world war. No country, or person can say that it has not caused a disturbance in its lifestyle or its consumption pattern. In fact, we are still in the middle of it under curfew and our lifestyle and consumption patterns will change significantly as we come out of the pandemic.
We are a second world economy, where the main focus of the government will be at the bottom of the pyramid. It is where the politically astute will focus for the greatest socio-economic impact and where the need lies at this moment, which will translate in to votes. Other strata of the pyramid will receive different levels of support, almost exclusively connected with the banking and financial sector. Professionals and the self-employed will have to fend for themselves along with the rest of the businesses.
The frequency of pandemics are increasing[1], this pandemic is by its nature, forcing humanity to change its lifestyle and consumption patterns. Where the current paradigm is to increase the congregation of customers to a single location, the new paradigm will want the customers distributed uniformly so that they can be severed equally and adequately. This will be the new paradigm which will, after a while become the new norm. Post pandemic consumption patterns and consumer behavior will cause an urgent and immediate review of strategic and or tactical plans for customer interactions, for all businesses, be it B2B, B2C, B2G or any other construct. The supply chain disruptions will also require some tweaking of strategy as we minimize mass gatherings and human contact.
Post pandemic economic recovery, will have to take place to encapsulate this new paradigm. Businesses and professionals providing products and services, will have to perform a variety of new tasks to engage with new touch points that the new paradigm will create. The businesses and professionals who will win the race, are the those who can predict where and when these new touch points will manifest and be able to service them immediately. In some cases, we will have to resurrectdead products and servicesinto new products and services such as, home delivery and mobile services as we did with recycling, when global warming hit us.Some may find automated vending machines and brand specific kiosks as the answer to engage with customers. For others, the old paradigm may return once an effective vaccine or a cure is found in the next 4 to 6 quarters. Those who have already geared up, will be unstoppable, example Amazon Home Delivery in the USA, global and local currier and delivery companies, Pick Me in Sri Lankawho will emerge as major winner in the now transitioning and the recovering new economy.
With a reinfection rate of up to 10%[2], the COVID 19 pandemic will continue to cause localized havoc from time to time withlow intensity sporadic hot spots until aneffective vaccine or a cure is found. These localized quarantine areas will be strictly policed to prevent social spreading of the virus. The ability to function in this dynamic environment will be a key requirement for business success.
Governments may bring in new legislation to extend operating hours (some may even make it 24 hours a day) of retail businesses and other service providers to enable them to serve customers with adequate social distancing. Longer working hours and even lower productivity may be the price we will have to pay to stay healthy, alive and in business during this time.
The businesses and professionals who have already invested to take their business online will have an advantage. However, this advantage can be overcome by their competitorsthrough rapid investment and implementation tactics. Some of the existing online facilities will also need to be ramped up to cater to the new demand. At any rate a digital presence will be required just to exist in the new paradigm, thus creating a stampede by those who trail to get online. This stampede will devour all available ICT resources in the short term creating a major shortfall of ICT equipment in the coming months. Employees and professionals will be clamoring to obtain adequate ICT infrastructure to be able to work from home or from isolation. With disruption in supply chains, global ICT companies and their local agents who get their manufacturing plants online fast, will get the maximum market share. Heady days are in store for ICT equipment manufacturers, and telecom and data service providers.
With COVID 19 spreading to different parts of the globe at different times, there will be a significant disruption to the fashion / garment industry as well. The next season’s orders may just not come as the consumers are in lockdown. Any available orders will of course go to the lowest cost manufacturers. It is prudent to note that Sri Lanka had stopped being the lowest cost garment manufacturer for a very long time. The garment industry may not have a choice but to ride out this pandemic or be prepared to change their factories to manufacture Personal Protective Equipment (PPE) that is in demand now.
Businesses that relied on moving or gathering a large number of customers to one place will be the worst hit. Tourism / transport / entertainment / dining etc. these businesses will have to look at innovative methods to stay in business until a vaccine or a cure is found. As with the ICT industry there will be a run on all personal transport equipment (Motorcycles / Mopeds etc.) as consumers will seek to switch from public transport to individual transport. This demand will have the potential to spill over to the small car market as well.
Tourism, a key sector, will no doubt be hard hit by the pandemic. However, as we come out of the pandemic, we will have to leverage on our health services being ranked 21st[3] globally. The Sri Lankan Government must negotiate directly with international insurance providers for the travel sector from the 20 countries ranked higher than Sri Lanka, enter into an agreement with these companies to underwrite all health cost of tourists during their visits to Sri Lanka form these higher-ranking countries. Then promote Sri Lanka as a destination to these 20 [4]countries until global tourism industry recovers.
The entertainment and dining industry will have to reduce the covers they serve to increase the physical distance between their customers. Some AMC cinemas in the USA had already expanded the space between each seat before the cinemas were shut down. The new reality of going to the cinema may include the usher handing you 3D glasses along with a face mask.