COVID-19 accelerates digitalization, upskilling across Southeast Asia
By Celine Chen
SINGAPORE, NNA - While many hawkers were late in embracing food delivery technology, Bren Tham of Rolina curry puff stall in Tanjong Pagar, had already signed up with GrabFood in 2019 before the coronavirus pandemic struck.
Although his earnings plunged by 30-50 percent during the disease containment months of April and May in Singapore, the Grab delivery platform generated about 10-20 percent of sales, which helped prop up his business somewhat.
The 45-year-old man, who normally sells about 200-300 curry puffs each day, said, "Most of my regulars are office workers, But many had to work from home during the strict lockdown months, so sales dropped. After the lockdown was mostly lifted, GrabFood did a nationwide promotion of food stalls including ours. That really helped and business went up by 30 percent. So I hope they will do more promotions for us."
Although Tham's business is now back to almost pre-pandemic levels, his dependence on the delivery service provider to push sales reflect the help small businesses and workers need to become more tech-savvy in order to boost sales and business efficiency, even in the Smart Nation of Singapore, which has been at the forefront of technology innovation shaping the future of entrepreneurship in Southeast Asia.
The rude arrival of COVID-19 has forced many business operators throughout the Asian region and elsewhere to accelerate the digital transformation of workplace practices after many workers were mandated to work from home.
Overnight, many companies had to forge a new work culture with telecommuting, virtual meetings and webinars. They also had to upskill or reskill workers quickly to create digital content and manage e-commerce, digital financial services and social media as people flocked online to shop, settle payments and be entertained.
As digitalization was essential to keep operations running, governments swung into action to accelerate the technological transformation of their administration as well as to support digital activities in the private sector. Bridging the digital divide, and rolling out monetary aid and other stimulus measures became important twin tasks.
The worst-hit are micro and small enterprises with limited resources and digital know-how.
After a nationwide 'circuit breaker' lockdown was launched to curb the spread of the virus in Singapore in April, sales plunged for hawker Lee Chin Koon who used to do a roaring business with between 200 and 300 bowls of wonton noodles sold each day.
In his late 60s, Lee became worried when sales fell to less than 100 bowls at his stall in a food center in eastern Singapore.
Fortunately, the food center operator helped him and other hawkers go digital by teaching them how to use food delivery platforms like GrabFood, Deliveroo and foodpanda, and promote their business on social media platforms like Facebook and Instagram.
Trying to use a food app was a steep learning curve for Lee, who belongs to the older generation who is not tech-savvy.
Glad that business has improved with the use of the app subsequently, he looks forward to achieving high sales again.
Said Lee, "COVID-19 taught me that it is important for all hawkers, regardless of age, to be adaptable and be willing to adopt technology and digital services. I encourage fellow stallholders to take the first step and you may realize that it isn’t too difficult to tap on technology to reach out to more customers."
Leading technology companies also reached out to small businesses to encourage them to use their digital platforms for e-commerce and food delivery
In May, Facebook rolled out the Facebook Shops service for businesses to set up an integrated online store accessible from Facebook and Instagram. It was used by many food stalls and small businesses in Singapore and elsewhere.
Singapore-based Grab, which offers transport, food delivery and payment solutions, also sprang into action.
In March, it launched an initiative to bring Southeast Asian wet markets online. For instance, people could go online to order fresh produce like vegetables or fish from a popular market in Kuala Lumpur, and a Grab rider would deliver it to them.
In June, Grab started the small business booster program which provides tools and opportunities to help offline businesses extend to the digital realm. It set up an academy in September to train staff from 3,000 food and beverage businesses to achieve digital capabilities by end-2020 .
In August, Grab and consumer goods giant Unilever collaborated to help small offline retailers in Southeast Asia join Grab's food delivery and shopping platforms. The move also increases earning opportunities for Grab drivers.
Last month, Grab launched its second cloud-based shared kitchen in Singapore. The business model of shared premises is not only cost effective, it also helps food and beverage companies step up their digitalization efforts to meet the sharp spike in demand for food delivery services.
Among those that have taken up the cloud kitchen facility as an additional business channel are established Singapore chains such as Putien, which operates Chinese restaurants, and sushi and salad group Maki-san, and Japan's teishoku set-meal chain Yayoi.
While many businesses have fallen on hard times, some managed to rise above the pervasive gloom to emerge more resilient.
When Singapore enforced the closure of most retail businesses and beauty centers from April, Bella Marie France beauty treatment chain and Svenson hair treatment outlets launched their e-commerce platform so that existing clients could continue to have access to their products.
Amy Quek, CEO of Global Beauty International Pte. Ltd, which runs both businesses in Malaysia and Hong Kong too, said, "Growing our online presence on social media and e-commerce helped us pivot our business into a more digitalized and efficient operation model to ensure business continuity and success. We managed to generate a threefold increase in sales revenue from April to June 2020 compared to 2019's annual total. We made sure that our prices were competitive and we also gave free delivery."
The company, which reopened their offline outlets with safety measures in place several months ago, was fortunate to retain most of its staff with the help of government assistance schemes.
Quek added, "We feel more confident now to move forward our plan to expand to Indonesia."
A survey by Bain & Company in 2018 found that only 16 percent of SMEs in Southeast Asia actively utilized digital tools, while 75 percent of them saw digital integration as an opportunity to enhance intraregional trade and growth. Bain, a global consultancy, believed that a digital alliance could boost the GDP of ASEAN economic bloc of 10 countries to $1 trillion by 2025.
Speaking at the virtual Singapore Summit in September, Singapore's Trade and Industry Minister Chan Chun Sing said the coronavirus pandemic had indeed fast-tracked digitalization.
In September, Singapore launched a center to boost regional collaboration to prepare ASEAN immediately for the changing nature of work as a result of the pandemic and fast-changing technologies.
Called the Regional Centre for the Future of Work, it will institutionalize the regional bloc's collective effort to take advantage of emerging economic opportunities and tackle challenges brought by the COVID-19 crisis.
In February this year, the Asia Foundation said in its report on the future of work in ASEAN that the Fourth Industrial Revolution would present opportunities to establish new centers of innovation and growth in the region.
It noted that a cohort of talented young entrepreneurs, software engineers, web developers, and product designers were already building creative communities in Southeast Asia’s urban hubs and produced "dozens of globally impactful companies and inventions".
They include billion-dollar internet companies like Grab, Gojek, Tokopedia, Lazada, and Sea.
Asia Foundation said, "As the world economy shifts toward digitally-enabled services, the future of ASEAN’s industrial competitiveness and income growth lies largely in these innovation and knowledge sectors of the broader economy."
Going digital not only allows businesses to overcome short-term pandemic challenges, but also positions them to reap long-term economic benefits, said S. Iswaran, Singapore's Minister for Communications and Information, when speaking at a virtual event to mark DBS Digital Day in September.
Digitalization allows businesses to connect to global markets and expand their customer base, he said.
"Businesses should therefore seize this opportunity to reorganize their resources, revamp their models and redesign customer engagement," said the minister.
He added, "Businesses which go digital can also obtain better insights through data and deliver more customized services and products to customers."
Apart from retail and food businesses, trade fairs and education have also shifted online.
Professor Graham Kendall, who has seen the benefits of higher education's big transition to online learning, hopes virtual meetings and webinars are here to stay.
The CEO, provost and pro-vice-chancellor of the University of Nottingham in Malaysia, said, "Webinars are not only more efficient, they save a lot of time and money too. People don't need to commute or spend time at a seminar lunch. So, the big plus points are better time-management and cost-effectiveness."
As webinars have enabled much multitasking to take place, people are more likely to sign up, said Kendall, who is a computer scientist by training.
"You can switch off your microphone and camera and still be present for the webinar when you need to attend to other things like replying to an email, chat with a colleague online or with a family member at home," he added.
On top of that, "digitalization reduces carbon footprint and is much kinder to the environment," he concluded.