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UPS coaches MSME to bounce amid COVID-19

Beyond the immediate health impacts, businesses have also been severely affected by the pandemic, from experiencing supply chain disruption to facing physical store closures.

Raffy Ayeng

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UPS, one of the world’s largest and most trusted shipping and logistics companies, has outlined ways for micro, small and medium enterprises (MSME) on how to thrive and bounce back, as these companies suffered tremendously due to the global health crisis.

During various virtual workshops and webinars, attended by particularly women entrepreneurs in Batangas, Cagayan de Oro, General Santos, Iloilo, Legazpi, Puerto Princesa, Tagbilaran and Zamboanga, UPS managing director for the Philippines and Indonesia Chris Buono cited some of the key takeaways and insights to enable these business owners to cope with the current contagion.

These takeaways focused on the problems faced by business owners, in which UPS found out that 30 to 40 percent of SME have identified reduced cash flow and difficulty in resuming operations due to quarantine and social distancing measures as the biggest challenges.

Limited liquidity
“Beyond the immediate health impacts, businesses have also been severely affected by the pandemic, from experiencing supply chain disruption to facing physical store closures. What has become apparent is that small and medium enterprises have been hit the hardest by measures. Many SME have been forced to suspend operations, encountering limited liquidity and delayed payments, with some owners forced to dip into personal savings to advance workers’ salaries,” Buono said.

To mitigate these, Buono ruled out that if business opportunities become scarce, COVID-19 affected enterprises should pivot their business models.

He stressed that during physical store closures, e-commerce emerged as the way forward for businesses, as new digital technologies change the playing field and the speed with which companies can and must react.

“Some forecasters have even estimated that the pandemic brought forward the growth of e-commerce share of retail by two to three years. In pivoting your business to e-commerce, logistics need to support that shift, from production to warehousing and inventory management to fulfillment,” the UPS official explained.

He said that MSME should consider a business model that works best for them, whether a purely online model or maintaining a hybrid omni-channel model, emphasizing that whichever form it takes, supply chains and distribution channels will need to be reconfigured.

Digitalization
Government regulators, particularly, the Trade Department, have been pushing digitalization as key to be able to survive adverse effects of the pandemic.

Buono cited that over the last few months, SME that were able to continue operating with fewer disruptions have been those with a “digital-first” approach, establishing their sales channels through different platforms, including their own websites, Facebook, Instagram and market sellers like Lazada or Shopee.

“Among the businesses that UPS Philippines surveyed, 75 percent of SME are either in the process of transforming their business to go digital or intend to go digital, but don’t know where to start. This should serve as a strong signal to business owners who have not yet embraced digitalization to consider transforming their businesses to be more future proof,” according to Buono.

He maintained that the next thing to consider is enhancing the ease of cashless payment options for customers, either through existing platforms such as PayPal or bank transfers over cash-on-delivery options.

Business transformation
“All these form part of business transformation, which means looking ahead for growth, identifying opportunities presented by new technologies, and spotting new ways of doing things, whether digital payments or ways to bring products to market,” the UPS official noted.

Through digitalization, one harsh reality that businesses must face is the increasingly competitive and crowded e-commerce market, and the corresponding need to stand out with the right tools.

Customer experience is the name of the game in e-commerce, and when SME get it right, they will be able to grow the business and build loyalty.

“UPS has shown how it has helped SME with tools that enable greater automation, visibility and flexibility such as Marketplace Shipping, where shipping tasks can be automated from UPS-supported e-commerce platforms like Amazon, Shopify and Etsy. For SME, this means less time and labor spent on picking and packing, as well as manually processing shipments, waybills and printing labels,” Buono said.

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