Thailand after COVID-19 Part 2: Business opportunities and survival
From an article on Thailand after COVID-19 Prepare to get through the economist's perspective, Part 1 The impact of the economy and the Thai labor market. In this second episode, let's look at how the heavily affected industries must go forward when the industry recovers. What kind of business will survive in this period? How does New Normal change the business? How do salaried workers need to re-skill? Listen to the views of economists, Yunyong Thaicharoen, PH. D, a First Executive Vice President of Economic Intelligence Centre (EIC). Who will bring research results from both Thai and foreign countries to analyze for entrepreneurs and salaried people to prepare for after the COVID crisis ends.
Which businesses survive - fall during the COVID period?
From the economist's perspective, Dr. Yanyong sees that every crisis has a chance. But not every business has a chance. Must look at what businesses can grow and are less affected by COVID. The research found that there are 3 groups which are 1. Communication Business Group 2. Retail groups and 3. Food and beverage groups must be done both online and offline concurrently because people are getting used to fast and easy online ordering. While businesses that need to be cautious and shouldn't be rashly affected, which are directly affected, such as hotels, restaurants, airline Construction, and real estate business, oil business, and automotive business. These are risk groups that should be cautious. But not able to do business, must wait for the right moment After the 3rd - 4th quarter of 2020 it will begin to see a gradual but gradual recovery.
Dr. Yanyong said that should try to learn from different countries. In a crisis, you can see that there are some similar patterns. Like Asia, the survey found that consumers have a higher demand for certain types of FMCG products for daily use. Resulting in stockpiling of goods due to concerns about shortages. If the business sector must stop production the additional products purchased include personal hygiene products 48%, health products, and supplements 45% and household cleaning products 40%, including the behavior of people from the COVID situation. Causing 32% of online shopping, 42% using video streaming services, and 30% of ordering food.
While the products that buy less are alcohol drinks 30%, luxury goods 27%, meat, and seafood 21%, including fewer behaviors, such as going out 52%, going out to eat 52%. Or in the United States, there is also a Trigger Point that allows consumers to change their thinking and spending behavior. By focusing on more necessary things such as food and medicine with a proportion of purchases increasing by more than 50% and online shopping habits. While the cost reduction would be 56% in tourism, including entertainment and clothing purchases that dropped by 30%
New Normal familiarity
Dr. Yanyong gave a comment on New Normal to the behavior of people who change because of the habit when doing that behavior repeatedly. In a long time Have a chance to become a New Normal. But not every behavior will become all-new normal. Trends of consumer spending behavior during detention at home such as watching video streaming, playing online games, spending via e-payment, ordering food delivery, cooking food at home Including spending to repair the house such as furniture, Renovate the house into a home office. These new behaviors reflect people in society.
Dr. Yanyong also said that When there is a crisis, there is usually New Normal. For example, after the end of World War 2, men were drafted into many soldiers. Causing normally women only stay at home, must go out to work to support the family, cause New Normal. Or, for example, the 911 incident with terrorism, which leads to more stringent flight standards for terrorism and security. Or the SARS crisis, causing e-commerce in China, Hong Kong, and Singapore to grow Because people must shop online. As for Thailand, Dr. Yanyong views that New Normal will be a matter of increasing online use or technology in various matters.
"Know the insight" Techniques to Bring a Business to win COVID
With questions about whether to start a new business or not. Dr. Yanyong views that the business after COVID must focus on the rapidly changing consumer behavior. Understand and know the customer's mind about new needs. Must improve the style to match with new behavior. For example, restaurants believe that most people still like to go out to eat at restaurants instead of taking them home because of both the freshness and the atmosphere of the shop. But must also be sold online. Because people are already used to online orders. Or the mall must create a distinctive spot for people wanting to go out to walk in the mall. Creating a better experience than buying online will also allow more people to choose to walk to the mall etc.
Point of way to survive the hotel business
The COVID outbreak has caused the hotel business to have deep cuts that are difficult to heal quickly. Dr. Yanyong views that it must be gradual, expected around the middle of the next year 2021 onwards. We, Will, start to see good signs because of the turning point of the crisis COVID means that the vaccine must be produced successfully. The hotel business will improve accordingly. And how to adjust during this period. The first thing is financial management. Must closely monitor liquidity Manage accrued accounts to be more efficient, reduce employment costs as necessary and reduce inventory. Although it seems that the hotel business takes time to recover, Dr. Yanyong suggests that business people should not be stagnant and should adapt in 2 dimensions, namely
1.Changes in service standards: Including New Service & Hygiene in terms of service and cleaning. More guests are welcome to contactless services. Including cleaning rooms and areas with new standards. Digitalization Accelerated: guests will want to use more in-house technology to reduce intimate contacts, such as the mobile check-in system or the e-concierge system used to book various services within the hotel, requiring more investment in service technology than before.
2. Increasing revenue flexibility More Thai Guest increases the proportion of income for Thai guests. Do not rely on foreign tourists alone. Allowing more flexibility in operations in the event of abnormalities in the future. Non -Room Revenue Increasing revenue from other services such as spa, fitness, restaurant, and conference room will play a greater role in hotel operations in the future. To reduce the dependence on income from the room only
The new selling point, Golden opportunity
Of course, the situation of COVID makes Thailand lack of tourism income, accounting for 12 percent of GDP. But if looking optimistic Thailand has the advantage of strength in medicine and public health. Dr. Yanyong sees that there is still room for Thai tourists to come back to Thailand after visiting COVID Thai. Due to being renowned for Medical & Wellness Tourism. Regarded as an opportunity in the medical field Holistic treatment and rehabilitation Including local cultural tourism. Travelers who like to travel on their own or FIT (Free and Independent Traveler) will be the first group to come after COVID. It is therefore an opportunity for the Thai tourism industry to use this crisis to create added value and income for local people.
Survival of salaryman
Before the birth of COVID, there was a disruption in various businesses. Causing the business model to be adjusted. And with COVID, it was the catalyst for faster disruptions. Regarding the salaryman, Dr. Yanyong said that the first thing that should be done is Risk management. Which must have liquidity so that you can support yourself for at least 6 months if sudden unemployment occurs. Should reduce expenditures without incurring additional debt, find extra income. And during confinement at home, should invest in yourself, enhance knowledge, add new skills that the labor market needs. Giving you more chances to find a new job or maybe an initiative to build your own business from new skills learned.
Thai entrepreneurs that have been affected will probably see the New Normal that is about to occur in Thailand after the COVID end. Who can adjust quickly? Responding to new consumer needs including using technology to create business opportunities Will be able to stand and survive. While the salaryman has an opportunity to accumulate knowledge costs, add new skills to make stronger, better, and is needed by the labor market in the future.
Source: SCBTV Thailand, behind Covid-19 Prepare to get through the perspective of an economist on Facebook SCB Thailand, 7 May 2020.