COVID-19, economy and SMEs, a delicate situation …
In these times of unparalleled economic and health crises, entrepreneurs and business leaders in France and the world are quite uncertain about the future of their business, pondering on the solutions to overcome the current difficulties, while bankruptcies threaten many of them.
In a context where economies recede as brutally as during a war, where debt levels are going through the roof, the situation is not favorable to the working people, and in particular to the companies whose sectors are the most fragile: small service shops, transport, tourism. However, solutions exist to try to get out of the water. KNOK STUDIOS take stock.
… But not inevitable.
The keystone of the current crisis is the obvious difficulty to consume normally.
With the restriction of movement, curfews, partial or total lockdowns all around the world and the closure of stores deemed “non-essential”, consumption habits are undermined.
However, people do not necessarily stop consuming, or at least not completely!
To see resistance or encouraging signs of growth, it is to Internet and E-Commerce that we must turn.
Indicator among many others, in the Europe of 27, in April 2020, while sales in stores fell by 17.9% compared to the previous year, orders on the internet increased by 30%! (Source: Oecd.org). This figure is of course to be put in relation to the share of commercial transactions on the internet, which is less important than in the streets of our cities. It is however a comforting fact, and which opens the way to a change of economic model.
Another indicator, in South Korea, between July 2019 and July 2020, the value of e-commerce transactions increased by 15.8%. Of course, again, there are disparities behind this increase. If food deliveries have increased by 66.3%, household supplies by 48% and the food sector by 46.7%, it is obviously not the same for transport or travel activities, which volumes were halved.
This is not therefore to paint an idyllic portrait of activity on the internet, but to note that in a global context of recession, the internet acts as a “bumper” cushioning part of the economic slowdown, and giving a breath of fresh air for many companies, allowing them to overcome this difficult course.
And this shift, certainly “forced” to a certain extent, is a positive thing.
Because these investments made in online communication and in the creation of websites will not be beneficial only in the context of Covid-19, but correspond to a fundamental need for companies to meet their customers where they are now the most: on the internet.
Consumption in times of Covid: a profound change in mentalities
Even in a country relatively “spared” by COVID-19 such as Vietnam, thanks in particular to the preparation, approach and responsiveness of both its public authorities and its population, consumers have changed their habits during and following the pandemic.
Indeed, according to a Nielsen study in Vietnam, 64% of consumers say they use food delivery services more regularly than before the pandemic, and 63% are buying more online than before.
While internet shopping already had many advantages: reduced costs, a remedy for geographic isolation, incomparable choice, 24-hour accessibility, the argument for health and the reduced number of social interactions necessary for the act of purchase has gained considerable traction.
Confined or not, the population is now turning (and will turn) more and more to online stores, food or not, for their purchases. After such a long period of health crisis, and with no visible end to it, consumers will continue to favor the safest solutions for their health.
Moreover, although for a time e-commerce was very much about high-tech goods, toys, books, and other similar products, today the public can find absolutely anything they are looking for on the internet: medicines, shopping and fresh products, or tickets of all kinds. Some leisure activities are even benefiting from digitalization at the time of the Covid to organize their schedules and control the flow of visitors to avoid overcrowding. Consuming online is therefore becoming the ultimate security measure and leads to positive developments.
Thus, in an uncertain context such as ours as to the duration of this epidemic, the big winner is the internet.
Google Searches for “Delivery” keywords in 2020 :
At the start of the epidemic in Europe and the United States, it was observed that the terms of “Delivery” were sought twice as much as in normal periods! A trend that is no longer a trend, but consists of a real shift in consumption habits.
The digitalization solution to regain potential
Widely accused of killing small or local businesses, internet delivery giants such as Amazon have “taken advantage” of the pandemic to promote their services and increase their delivery volume.
But let us not forget that Amazon is not an online store or a giant in itself, but also and above all a network of companies making their sales on this platform!
On Amazon therefore, there are not only “big” companies – far from it -, but countless businesses of all sizes selling their products!
Therefore, a change of mentality is necessary: stop envying this model and understand that you can find a place in it, and that having an online presence for your company in 2020 is a question of economic survival.
“72% of German businesses sell online, only 30% of French businesses sell online. I am available to French businesses to accelerate this transition.”
Frédéric Duval, CEO of Amazon.fr, on BFMTV, November 5th of 2020
During a BFMTV interview, Frédéric Duval, head of Amazon France, reaches out to French entrepreneurs, offering them training, discounts and assistance so that they too join the sales network and find new potential on the internet
Another example of a measure taken by an e-commerce giant: in the United Kingdom, eBay.uk has temporarily abolished its entry fees for small sellers (up to 250 references).
At a time when the Internet penetration rate among the population is close to 100%, with each citizen connected, having only a third of French entrepreneurs with an online presence clearly seems insufficient!
In Vietnam, the e-commerce giant is called Lazada, a Singapore-based company owned by Alibaba. And in the midst of a pandemic, on Lazada, some sellers of fresh produce declared they had 40 times more orders than usual!
In this regard, there would be 8 times more shops in Lazada today than before the pandemic. Asian businesses are not mistaken: they see these platforms as a real salvation.
Amazon, Lazada… but also…
If online sales platforms such as Amazon or Lazada definitely have serious arguments for them: reputation, very rapid access to a huge audience, affordable subscription costs, they are not the only solutions towards digitization. They are not always the most suitable either.
Indeed, other supports are to be favored according to your business model.
If you sell services, you will not be able to subscribe to an online store with these platforms. This is why your best ally remains the showcase site of which you will be the sole owner. Coupled with an SEO campaign (but which takes time!) or an Adwords-type advertising campaign (immediate appearance in the search results for your keywords in the region of your choice), these showcase sites can attract new customers! In addition, if until now you spent your marketing budget mainly in the press, display, direct mail or other, this will be the opportunity to save money, the costs of advertising on the internet being cheaper, and above all, allowing to bring the public directly “to you”!
Also, and unlike a store on Amazon for example, having your own website will allow you to have a space really in your colors, recognizable among a thousand. You can also install a chat module on this site in order to re-establish a dialogue that may be lost with your target audience. If your premises are closed, this will be an opportunity to continue to interact with the public.
To do this, Facebook is also a very good solution. Much more economical than a personal site, the dialogue on a Facebook page is also very good with your customers, and you will be able to write about your services and your products in a relatively simple way, as well as quickly informing about your news. Less customizable and not allowing you to rank properly on Google, Facebook nevertheless remains an affordable way to test your sales potential on the internet and can be the first step towards the digitalization of your business.
More generally, the Internet offers a whole world of solutions to reactivate your business, and more and more digital tools are there to serve the consumer: simulators, detailed 3D views of products, even virtual fitting rooms! For each problem there is a solution.
The intervention of public authorities to promote E-Business
On the French side, the Government has posted an online guide for small businesses, so that they can make the best use of the digital tools at their disposal in this exceptional situation.
Aid (grants or loans) dedicated to supporting the digital projects of very small businesses is available on the France Num website:
- Digital vouchers: grants offered by Regions to finance digital transformation expenses (diagnosis, support, purchase of equipment, use of a service provider, etc.);
- Loans and guarantees: direct loans at preferential conditions and public guarantees to release the funds necessary for digitization;
- Increase in equity: solutions to increase financial capacity and provide the capital necessary for the growth of the company, in the continuity of a digital transformation project;
- Other funding: digital platforms that offer innovative solutions, based on the principle of the collaborative economy.
On November 07, 2020, French President Emmanuel Macron announced the extent of the state aid system for businesses in the context of the Covid. Among these measures, he announced that “100 million euros are planned to support small businesses that want to go digital. For example, they are only one in three to have a website today“.
The Ile-de-France Region will also offer a digital check for “connected businesses”, in order to provide them with assistance up to € 1,500 for their digital expenses, such as SEO campaigns, hosting costs, training, advertising campaigns, etc. This concerns all independent workers and companies located in Île-de-France with less than 10 employees.
Recently, in the overseas department of Réunion, the local authorities allocated a sum of money to SMEs intended for this digital transformation, so that entrepreneurs use the services of Web Agencies to launch their website. If you live in France, check with your region for similar assistance!
Around the world, countries such as Japan and South Korea have also launched programs to help so-called “Brick and mortar” businesses (ie physical stores) in order to begin their transition to a digital model.
Everywhere, initiatives are being taken to also strengthen the framework in which electronic commerce is conducted, in logistics, payment security and in consumer information, in particular in order to encourage them to consume more online.
Digitize your Business with KNOK STUDIOS
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From just 549$, our Starter Pack will offer you an attractive and modern showcase site that will make its visitors want to use your services.
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