The social, economic and wellbeing impact on the global level have expanded and challenges for business all around the world are growing faster than ever.
The global aviation industry is forced to ground majority of their fleets, bringing them to bankruptcy as people stopped travelling. H&M, Zara, Victoria’s Secret are closing stores since the pandemic. They have suffered billions of losses and now pivoting their focus on online stores. In Malaysia, non-essential businesses such as construction, travel agencies, tourist hot spots have been forced to close. The market prices for real estate have gone down like never before.
How the Domino Effect Started the Distress.
Travelling eases how businesses run in order to import and export supplies. So, when travel stops, supplies stop. This causes businesses to face bigger operational challenges to make ends meet. The business now is not the same as business before as movement of goods, services and workforce between borders have stopped.
The domino effect of the covid-19 pandemic even extends towards the end value chain, which is the household. As households are reducing expenses and not spending much, that’s when more businesses start closing. Hence, many parts of the world may fall deeper into chaos and become poorer. We are already seeing rising inequality from this pandemic due to alarming job losses and uneven health outcomes among the vulnerable groups of the society. Many people may not be able to afford paying rents and loans to help make ends meet, hence more homeless families in the streets.
So how does the world stop the domino effect? Balancing the economic situation against public health is not straightforward. This is the never-ending dilemma faced by the Malaysian government when they decide to reopen the economy and support businesses and employment, while safeguarding public health throughout the crisis with restricted movements.
To help ease nationwide burden, the Malaysian government granted support packages and incentives to support all SMe businesses and individuals. The Bank Negara Negara Malaysia (BNM) also implemented a moratorium period for loans and mortgages. However, even with the financial relief, it is predicted that many individuals and businesses would still struggle to make ends meet.
Businesses need to reduce costs as much as possible.
Hence, what it means for businesses and individuals is to reduce costs as much as possible to still survive. Businesses need to find new flexible ways of working that will not need costly office leases. They need to learn to innovate and face disruption to support the work-from-home model.
That being said, going flexible with a virtual office in a flexible coworking office space might help businesses reduce operational and overhead costs. Businesses may not want to give up the office entirely, but they would still want to maintain the professional presence. These smart, agile yet affordable ideas will give businesses a competitive edge in today’s deflated economy.
It is crystal clear the pandemic will have lasting devastating effects on the Malaysian economy, as well as the global economy. Despite the uncertainty as to when the pandemic will end, experts are predicting that COVID19 domino effect will stay until 2023, or more years to come. Therefore, it is crucial that businesses respond quickly by reducing costs, innovating and facing disruption to minimise devastating impact, recover and revive stronger and agile than before.
If you need to save your business from the domino effect, get in touch with NOVUX team and learn more about our business solutions. We’d be happy to offer you our virtual offices at a fraction of a cost!