The coronavirus pandemic shook the business world hard and left industry and commerce in tatters in its wake. This was a phenomenon not unique to any particular country as across the globe business owners and entrepreneurs were hit badly with the protocols that followed in an effort to curb the spread of the virus.
Saudi business owners found themselves in similar dire straits when the external factors related to the pandemic started in March 2020. Some folded and closed shop, but many others took upon the challenge and started branding new products as a way to respond to the uniquely challenging situation. According to a recent study by Kaspersky, more than 32% of small and medium business enterprises actually thrived in spite of the economic drought spelt by the effects of COVID-19.
When the lockdowns were first imposed, more than half the businesses suffered a massive drop in financial stability and they quickly resorted to taking a host of cost-saving measures. In light of this, besides regrouping their existing manpower and launching new offerings and business opportunities, other measures had to be taken in an effort to survive.
Borrowing a page from Steven Callander, a political economy professor at Stanford Graduate School of Business who said, “The objective is to handle a crisis as a management problem” and “to thrive in the spotlight”. In light of the pandemic, the decisions were especially complex. The ability to adequately respond to a crisis can enable a business to make the most of it. Accordingly organizations had to consider external factors — a lockdown, new sanitary requirements, a radically changed lifestyle — and their business capabilities.”
The Kaspersky study highlights how in addition to the launch of new products and services, as an active response, nearly every fifth organisation entered new business sectors (14%). Innovation led to finding quick solutions and rapidly or else face the risk of being closed down. Business owners soon realised to maintain a customer base in spite of lockdowns and curfews, new measures had to be employed and thus digital marketing and services began taking a more dominant foothold.
Manufacturers of medical accessories such as masks, sanitisers, etc took the lead in quickly ramping up production to meet the growing need of a public slowly becoming aware of the threat of the pandemic. Companies that were involved in staging events, entertainment, art, and cultural shows had to resort to a digital alternative to satisfy their clients. Shops and restaurants devoid of customers began building delivery processes and boosting their online sales.
The government, acutely aware of the massive financial impact to the SMB’s, quickly responded with financial assistance to qualified recipients. Among other anti-crisis measures, taken at the time was allowing all or most employees to work remotely (72%). But the study also shows that the majority of decisions still aimed to optimise expenses: organisations introduced budget cuts (26%), reduced pay or working hours (50%), diverted budgets, or stopped investment plans (28%). One in ten companies had to take critical measures such as laying off employees (10%) or stop paying bills (8%).
Andrey Dankevich, Senior Product Marketing Manager at Kaspersky commented that “Although some decisions were hard, they were necessary. Now, it is good to know that the overall feeling about the results of the pandemic is somewhat positive across small companies: (56%) agree that their business responded well to the global challenge. The lessons learnt should now help them to better prepare for future challenges, improve the current investment plan and processes, try new things boldly, and become more digital. I also believe that the products and services launched in response will stay relevant because anti-COVID-19 restrictions are still in place and people continue to follow digital habits picked up during the pandemic.”
I had a chance recently to discuss the challenges of running a small business with Ahmed, a barista owner who had launched his coffee shop just months before the world became aware of something called the COVID-19. “We started small but were quickly growing in popularity, and our reputation spread beyond the neighbourhood we were in. Our clientele was increasing and so were the tables we had to put in place to accommodate them. Suddenly the virus came and we were all shut down. It was a depressing time for me, but then I realised that I had to do something or permanently close down. I reached into my customer base and began promoting alternative coffee products online which drew enough interest and money coming in to sustain me during the lockdown months. Today we are even bigger than before.”
Indeed, many business owners who dealt with the pandemic by thinking out of the box are today finding themselves in a comfortable and profitable position. It is a testament to the resilience and imagination of an emerging Saudi generation of can-do’s.
Tariq A. Al Maeena is a noted Saudi sociopolitical commentator. He lives in Jeddah, Saudi Arabia. Twitter: @talmaeena