Covid-19 pandemic has shut down almost entire industries worldwide and swept through the global economy in an unusual way. No one has been spared the wrath of the pandemic. Companies from small to large corporations are forced to adapt and transform in order to survive and recover from the current crisis.

Business Model Transformation

Based on a survey done by McKinsey in April 2020, consumers would prefer to shop online rather than offline during this pandemic. Hence, offline businesses are facing the hardest hit and suffer a huge loss if they do not embrace online platforms. Ecommerce will provide online businesses a long-term boost as the consumers’ preferences are shifted by the pandemic. Transformation from offline to online platform can be highly beneficial since it can reach a wider audience, feasible to operate from any location, low operating cost, no time limits and easily scalable. So, we will foresee wider digitalisation of businesses and services taking place post covid-19. It is necessary for businesses to embrace the latest technologies and strategies in order to sustain the current market transformation.

Labour Dependency

The expected slowing down of domestic and global economies will see many businesses downsizing or closing down and a huge job loss among Malaysians. Perhaps it is the right time to wean the country off its dependence on cheap foreign labours and decrease the unemployment rate among Malaysians. We have ridden on the backs of foreign labour for so long until they make up about 15% to 30% of the Malaysian workforce. In regard of the current pandemic, cramped living conditions of the foreign labours become fertile ground for viruses to spread leaving them at higher risk of exposure to Covid-19. Therefore, the Ministry of Human Resource (MOHR) has advised that if lay-offs are unavoidable, foreign labours should be terminated first. The authority also has come out with a policy to incentivising the hiring of local labours instead.

Supply Chain Dependency

March 2020 was recorded to be the worst month for most businesses due to disruption of supply chain since most countries were imposing lockdown to contain the spread of Covid-19. Businesses are struggling to meet the end meet due to disruption in supply chain of raw materials, manufacturing, packaging, and transportation and distribution. On top of that, our dependency on China in global supply chains cannot be overstated. Consequently, production problems in China mean problems for the entire world. Some analysts predicting there will be a seismic shift in supply chain in response to the current pandemic. Most businesses will opt for localinstead of international supplier in order to move away from risky dependence on vulnerable nodes in the supply chain by sourcing closer to the end-users and localising or regionalising supply chains.

Summary

In conclusion, businesses have to go through some readjustment or re-adaptation in order to stay relevant and survive the current market transformation. Most businesses are taking the opportunities to build up their digital capabilities by pivoting from offline to online amidst Covid-19. The current pandemic also has shifted our labour and supply chain dependency from foreign to local labours and international to local suppliers as part of our effort to localize supply chain in respond to uncertain market and international policies post Covid-19.