COVID-19 did not hit the Asia-Pacific region as hard as it did in North America and Europe despite its closer proximity to the origin of the virus, China. Although all member nations continue to face challenges posed by the pandemic.
As a result of national lockdowns and uncertainties brought by the disease, economies took a painful plunge. Malaysia was hit the hardest, its economy contracting by 17.1% during the Q2 of 2020. It was followed by the Philippines, Singapore, Thailand, and Indonesia.
Southeast Asians Spend More Time Online
The pandemic, and the restrictions placed as a response to it, did not stop the public from browsing the internet. Popular internet companies operating across the region reported that use has not dampened the frequency and length of access of consumers to online services during 2020.
In fact, throughout the year, 40 million new people went online. Those who are already using the internet for a variety of reasons prior to the pandemic spend an average of one hour a day to purchase essential goods, to attend online classes, and to consume all sorts of media for entertainment.
While small and medium-sized enterprises everywhere struggled to survive during months of lockdown and a significant dip in consumer interest, online shopping flourished. The adoption of e-commerce has seen a dramatic rise. Shopee, one of the largest e-commerce platforms in the region, saw a 140% increase in online orders in April 2020 compared to the same time the year before. Alibaba’s Lazada, on the other hand, had as many as 40 million users go online to browse or make a purchase on Single’s Day (Nov. 11), the biggest online shopping holiday in Asia.
Digital Evolution: the Key to SEA’s Economic Recovery
The pandemic has threatened the existence of MSMEs (micro, small, and medium enterprises) which are the backbones of economies. They account for 95% to 99% of business establishments across Southeast Asia. They are also responsible for more than half of all employment in the region.
For economies to recover after the pandemic, MSMEs need to survive. For MSMEs to survive, they need to adapt to the changing needs of the public.
Digitalization of services will enable businesses to bounce back and recoup losses, but it would not be easy. Most entrepreneurs will need the help of a search engine optimization or SEO agency to map out a plan that will put the brand at the front and center of major operating systems and social media apps. For example, many Singaporean-based MSMEs utilize the services of SEO agencies in Singapore to increase their brand awareness online.
Online, MSMEs will have to compete with brands that have already established a strong presence in the e-commerce sphere prior to the pandemic. Shopee and Lazada are strong competitors that are, in many ways, similar in influence to Amazon which, globally, has become synonymous with e-commerce.
MSMEs should begin to utilize the many strategies and tools online to increase visibility and profit, both over the internet and in brick and mortar stores.
During the pandemic, opening an online storefront and heavy-investments in digital marketing have allowed businesses to continue their operations despite lockdowns and other restrictions. They have proven to be more resilient to outside factors such as a pandemic.
In Indonesia last May 2020, a survey found that 42% of offline MSMEs stopped operating due to COVID-19. For comparison, during the same period, only 24% of online MSMEs had to halt their processes because of the virus.
There is strong evidence that, even after the global public health crisis has ended, the habits that consumers picked up during national lockdowns will continue to persist, and that includes online shopping.
Going Online Will Still Help Traditional Retail
Even businesses that want to remain offline and sell their products in brick and mortar stores will reap benefits from having a strong online presence. Through the internet, they can increase foot traffic in-store.
Businesses can use social media, send emails and text messages, and other strategies to tell consumers why they need to venture out of the safety and comforts of their homes and visit a physical store. A small neighborhood restaurant that has reopened, for example, now offers outdoor dining to entice consumers who may have been experiencing cabin fever from being indoors for too long but still want to minimize their risk of exposure to COVID-19. A bookstore, on the other hand, will offer scheduled visits to control the number of people within its doors during the pandemic.
Being online has clear advantages for MSMEs, especially at a time when consumers are indoors and using their smartphones or laptops to shop for essentials. If they remain offline, outside factors such as a pandemic can impede their processes and growth which will result in closures. For a strong after-pandemic economic recovery, MSMEs need to survive by going online.