The Challenge of Business Sustainability in COVID-19 Times

By: Dr Krisada Sektrakul, Head of Sustainable Market Development Division, The Stock Exchange of Thailand Apr 2021

2020 saw COVID-19 become a global pandemic. With the last such outbreak occurring around 100 years ago, the world was unprepared and global economies have, as a result, been impacted, some very severely. Few businesses have remained unscathed by this viral and invisible global enemy, while so many others are fighting to survive, some to no avail and, as a result, having to close forever. But, even though COVID-19 may seem insurmountable for many businesses, survival and sustainability are not impossible.

Through a survey of 58 SET-listed companies across 8 industries, the Stock Exchange of Thailand (SET) has discovered 4 common basic strategies that have helped these organizations prevail during the COVID-19 pandemic. Together with continued risk management, these are proven measures in the fight, on a business level, against not just COVID-19 but any crisis and also in pursuit of true sustainability.

Strategy 1: Happy Employees 

Whether it’s providing face masks, implementing work-from-home measures to prevent infection, or using this time to invest in employees’ digital skills development, SET-listed companies are staying strong by caring for their employees’ wellbeing.

Strategy 2: Product & Service Reform

Regardless of the industry, SET-listed companies are fighting back by reimagining their business offerings. Exporting companies in the Agro & Food Industry, for example, have rolled out online delivery platforms for increased B-to-C activities while Property & Construction companies have cultivated technology-driven models to offer virtual property visits to customers. Meanwhile, online market platforms are how companies in the Consumer Products Industry are getting things done now.

Strategy 3: Supply Chain Management

From adjusting credit terms so partners can remain liquid to transferring inventory management technology so suppliers refrain from overburdening themselves with stock, SET-listed companies are supporting and strengthening the supply chain on which they rely. They’re creating warehouse management models with warehouse space being increased and shared. And to ensure continued timely delivery to customers, they’re working with partners to jointly manage logistics and reduce risk.

Strategy 4 : Cash Flow Management

SET-listed companies are also coping and forging ahead by making cash flow management a priority during the COVID-19 pandemic. Moreover, they’ve conducted stringent reviews of production plans and lowered expenses to make sure that they are able to continue covering necessary expenses until the crisis ends.

SET spoke in-depth with corporate executives of selected SET-listed companies. These conversations unearthed how exactly exemplary listed companies are working rigorously to serve the investment community and protect stockholders’ interests.

Case Study 1: Oishi Group Public Company Limited (OISHI), Food Industry

Oishi Group Executive Vice President Mr. Paisarn Aowsathaporn explained that COVID-19 is the most devastating event the company has ever faced. The most pressing issues were rental fees, wages for over 3,000 employees, and raw ingredients in excess of 2,000 items from over 1,000 suppliers. However, preconceived sustainable development plans enabled Oishi to act quickly, tending first to employees who are the backbone of the business. In return, employees went door to door in the “Street Fighter” operation, bringing takeout menus to customers while shops had to remain closed. Strict hygienic restaurant and delivery measures were implemented and employees initiated a 3-times-a-day employee tracking application to rebuild customer confidence. And after working with major suppliers to ensure food stock was not excessive, Oishi provided production management assistance and more conducive credit terms to smaller allies. All of this is why employees and partners heroically stepped in to save the company from crisis.

For Oishi, COVID-19 necessitated innovation resulting in 22 new menu items, digital touchless payment, a full-fledged delivery system, and more. It also made greater technology adoption a must, leading to decreased back-office operations and increased work efficiency. The new normal, for Oishi in particular, has meant continuous delivery development and cleanliness vigilance for customer safety as well as making the inconceivable a reality, one great Oishi Group example being that customers do not just have to have shabu at a restaurant, but now can enjoy it from the comfort of their own homes thanks to delivery services. Longstanding commitment to the environment, economy, and its stakeholders is Oishi’s chosen path to sustainability.

Case Study 2: COM7 Public Company Limited (COM7), Service Industry

COM7 Chief Executive Officer Mr. Sura Khanittaweekul explained how this IT product retailer was operating via its own Apple stores and other outlets numbering over 800 branches even while it saw 90% of its revenue disappear when the government ordered shops to close. Forced to act immediately, COM7 switched strategies from a focus on growth to a focus on survival, first reviewing cashflow to cut expenses, negotiating with debtors and asking allies for assistance. It then boosted morale by providing care and product training for its over 3,000-strong workforce while cutting only the salaries of higher-ranking executives.

Owing to regular market assessment and non-reliance on any one brand, COM7 had expanded nationwide and adapted time and again to continually grow, but COVID-19 made COM7 see that this was not yet good enough. It thus ventured into the unfamiliar channel of online sales and learned to identify and eliminate any weaknesses through continuous development, which has enabled it to launch its now popular drive-thru services for pre-ordered products and computer-notebook rental business model making work-from-home possible. COM7 also zeroed in on its inventory with special promotions to move older product models. And once its cashflow improved, it began helping its business partners. In the new IT normal, COM7 now works through an omni channel to manage more online purchases and seamlessly link online and offline functions. And COM7 knows that sustainability means managing future risk and knowing that a company cannot succeed alone.

Case Study 3: TQM Corporation Public Company Limited (TQM), Insurance Industry

TQM realized that with fewer people driving due to COVID-19, TQM’s income would significantly lower if it were to rely solely on car insurance. Turning crisis into opportunity, TQM became one of the first to provide easily accessible COVID-19 insurance coverage and, consequently, welcomed one million more customers in just a little over 2 months. According to Board Chairman Dr. Unchalin Punnipa, “It’s not survival of the fittest but survival of the most able to adapt.”

Other than remaining customer-oriented, TQM has carried out continuous technology development over the years, making it possible for TQM to go from face-to-face interactions with 3 to 4 customers a day to now servicing an unlimited number of customers via online channels. Dr. Punnipa also shared that TQM carries on strong by investing in employee care and, rather than reducing staff, getting them ready for the new insurance normal where consumers are comfortable with investing online rather than through physical means. TQM also advocates for strong leadership among team leaders and a principle of strong together, which is why it has, for instance, shortened payment terms for car repair partners, inevitably helping to improve customers’ liquidity. Finally, this SET-listed company realizes that sustainability cannot be achieved if a business’s stakeholders incur loss or impact and thus mutual benefit must always be kept in mind.

Case Study 4: True Corporation Public Company Limited (TRUE), Technology Industry

The lockdown during COVID-19 forced everyone to stay at home. While this was a loss for so many, it was an opportunity for technology-based firms like complete telecommunications service provider TRUE. TRUE’s Chief Innovation and Sustainability Officer Dr. Teerapol Tanomsakyut stated that firms that once had the advantage could end up losers if they failed to adapt. And it did adapt by first refraining from laying off employees, and instead bolstering employee spirit and even helping with employees’ hospital bills not covered by insurance. Next, it tackled achieving business continuity. With COVID-19 forcing employees to work from home, it developed a TRUE Virtual World platform for online conferencing and information storage on its own cloud. And then TRUE redesigned its business models to cater to future demand and create advantage, resulting, for instance, in developing online systems to include telesales and self service under the new normal, thus lowering work steps and investment costs.

According to Dr. Tanomsakyut, this crisis is building TRUE’s immunity against all crises. Always mindful of society, the environment, and stakeholders, TRUE continues to develop under the new normal. For example, its TRUE V-Share helps its partners register their whereabouts and receive a QR code to seek immediate medical assistance if they are in risk-prone areas, thus boosting both customer and partner confidence. As for attaining business sustainability, TRUE sees the need for concurrently managing risk and each year determines risk factors with its materiality matrix to remain ahead of the game and take protective measures.

SET-listed companies are successfully riding out the storm that is COVID-19 and is why they are indeed worthy of investors’ attention. Due to the pandemic, these organizations have seriously and systematically undertaken sustainable business development and adjusted, if not completely reinvented, themselves.

They are also championing risk management through 4 key strategies. They first implement a strategy of emergency response to protect their stakeholders and assess possible impacts on their business operation, supply chain and financial status. Then comes crisis management through, for instance, a crisis team as well as alternative communication channels and backup systems to complement re-business models allowing the business to adapt. Impact mitigation is the third strategy and involves evaluating the effects on customers, employees, and other stakeholders as well as dealing with those impacts and providing assistance to ultimately aid in limiting impact on the business and enable everyone to get through the crisis together. And, in the final strategy of business recovery, each company prioritizes areas for recovery to promote an eventual return to better business times while preparing for the new normal to determine how to remain competitive.

SET’s 58-company survey revealed the recurring themes of employee care, reforming products and services, managing the supply chain, and managing cash flow, all being rooted in corporate governance and social responsibility and thus strengthening the entire value chain. These powerful roots together with risk management are what are enabling SET-listed firms to weather the COVID-19 crisis and to more importantly evolve into businesses of authentic sustainability. And its undertakings such as these that act like “vitamins” boosting a business’s immunity against any and all crises. When looking to invest, this is what investors should look for and is why all stakeholders can remain confident in SET-listed companies.