The COVID-19 pandemic was an unprecedented crisis that affected every aspect of our world. The human and social costs of the disease were staggering, and the disruption to the global economy was acute.
Unsurprisingly, small and medium businesses (SMBs) were among the worst hit, as many didn’t have the support structures in place to weather such disruption. In 2020, 61% of SMBs in APAC reported a decline in sales. The rate of failure of businesses in East Asia and the Pacific that year was 18%, while South Asia saw close to half of its SMB close.
Despite this challenging environment, the report found that nearly half of SMB owners in our region remain optimistic about their outlook, and the good news is that technology is the great equalizer. SMBs that have embraced easy-to-use cloud services are seeing improved business agility to power through uncertainty, accelerate innovation, and enjoy greater flexibility to scale and pivot towards opportunities and grow their business.
The pandemic drove a clear shift in consumer behavior. Social distancing and lockdowns saw people turn to digital services that included home learning, working, playing, and shopping. To meet these changing needs, SMBs across our region need the agility to rapidly change their business model and innovate to deliver value to a client base with increasingly sophisticated expectations.
A 2021 study found that younger Asia Pacific Japan (APJ) consumers desire increasingly unique, data-driven customer experiences, accessible in both physical and digital formats. These consumers are also willing to spend more, and through doing so, provide data that SMBs can use to create tailored experiences.
SMBs who have digitized are well-positioned to fill this need and benefit from this lucrative sector of the population. To thrive, not just survive in the post-COVID-19 new normal, SMBs will need to choose the right digital tools, including cloud, to lay a solid foundation for constant and consistent innovation.
Technology is the Great Equalizer
Customer expectations for digital experiences have risen even further since the start of 2020, and today, consumers want digital engagement to be just as reliable and enjoyable as a real-life shopping experience. While technology democratizes information technology (IT) for all, not all technology is equal.
SMBs must realize that using cloud solutions will help them deliver digital experiences that exceed the expectations of sophisticated consumers while meeting their priorities of business growth, cost management, cashflow, and innovation.
Agendas have changed, and new rules are being adopted. According to an Amazon Web Services (AWS) survey of 1,050 businesses across APJ to examine the impact of COVID-19 on SMBs, the top business and technology priorities shaping respondents’ activity for the coming 12-24 months include addressing the economic and societal disruption from COVID-19.
Naturally, the businesses surveyed cited cost management and cash flow as a top priority, controlling these by reducing capital expenditure (CAPEX), reducing headcount, and securing new funding. Growing the business is also a consistent priority for successful ventures, with companies growing margins, entering new markets, and providing new services.
SMBs in APJ are also taking this post-pandemic period to re-examine their teams. Employee engagement and productivity are key considerations, and businesses are addressing these with retraining, mobile working, and hiring new staff. Operations improvements and transformation efforts are led by supply chain improvements, investment, and developing a stronger partner ecosystem.
When SMBs move to the cloud, a lot of the heavy lifting is done for them. IT infrastructure is managed, cloud services handle the most difficult digital challenges, and expenses are kept to a minimum with pay-as-you-go pricing.
This means SMBs can spend more resources on product and service innovation, and with the right set of digital tools, grow more rapidly and easily.
Small is the New Big
SMBs’ size, agility, and hyperlocal market knowledge mean they have a fast-mover advantage. Cloud technology is helping these smaller players compete directly with traditional market leaders, out-manoeuvring them by innovating rapidly and developing smart solutions that take multinationals years to duplicate.
During the pandemic, Singapore events company GlobalSign.in built an end-to-end virtual events platform, GEVME Live, in six months to connect people through experiential event-planning tools online that could continue to support their customers.
You don’t need to be a multinational company to have your own data strategy – SMBs can and should develop finely-tuned playbooks for how they can use data, leveraging cloud-enabled data analytics, Artificial Intelligence (AI), and machine learning, to deliver value and joy to customers.
For example, Indonesian insurance broker and “online insurance supermarket” Futuready used machine learning to build a recommendation engine that tailors insurance products to suit individual needs of customers, including specific insurance cover for certain professions, like enhanced protection for delivery riders.
Mcredit, which offers an omnichannel banking experience, is a joint venture between Vietnam-based Military Bank and Japan-based Shinsei Bank. To serve customers better, the Vietnamese lender migrated critical business applications running in its datacenter to the cloud. The time the process required – from creating proposals through to final infrastructure set-up – decreased from four months to three weeks, and the business has been able to reliably serve its customers at any time of day with higher availability and stability using cloud technology.
Moving to the cloud offers SMBs the potential to unlock new areas of growth by reducing CAPEX and optimizing operations, while providing the tools needed for rapid and sustained innovation. The playing field has been levelled. Now, any SMB can use the cloud to thrive.
