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Businesses ‘pivot’ to Covid-19 to survive

Businesses 'pivot' to Covid-19 to survive 8

Businesses ‘pivot’ to Covid-19 to survive

Determined to `live with the epidemic`, AZA Travel Company owner Nguyen Tien Dat said `cannot help but feel sad and frustrated` when once again the tourism industry is struggling because of the new `wave` of Covid-19 outbreak.

`We have deployed many new services to welcome the golden tourist season during the summer, but now it feels dark when the epidemic recurs. Selling a tour to one customer was hard, now thousands of customers have canceled, the feeling right now

Before the epidemic, AZA Travel planned to recruit more staff to expand when domestic tourism showed signs of `recovering` but now this plan has to be postponed.

Like previous epidemics, the service, travel, and restaurant businesses still suffered the most when Covid-19 broke out.

According to Mr. Pham Ngoc Hung – Vice President of Ho Chi Minh City Business Association, this epidemic threatens the collapse of small and medium-sized enterprises.

Not only businesses in the service sector, the manufacturing sector is also facing a `double` risk, because of the fear of the epidemic `spilling` into the factory and the price of raw materials for production and freight costs increasing rapidly.

Having gone through 3 epidemics, Mr. Nguyen Chanh Phuong – Vice President and General Secretary of Ho Chi Minh City Handicraft and Wood Processing Association (HAWA) said that wood businesses have known how to overcome difficulties, orders are increasing compared to

`Production costs have increased with the increase in raw material prices, causing corporate profits to shrink,` Mr. Phuong shared.

Wood production at an enterprise in Binh Duong.

Similarly, the escalating price of raw materials for production (scrap, iron ore, coal…) also puts many businesses at risk.

In order not to interrupt production, businesses said they had to `calculate the long haul` and advance large sums of money to import raw materials in advance in case prices continue to rise.

`The price of materials has increased dramatically, accounting for 50-70% of the cost price, causing the business’s production costs to increase accordingly. The increase in the price of sold products only partially compensates for the increased production costs.`

But through each epidemic, what business owners realize is that, if they flexibly respond and transform themselves, embracing new trends, the future still has opportunities.

The General Director of AZA Travel has planned to open a side business, selling European draft beer products, to `take the short term to keep the long term` and have money to pay staff salaries.

`We mainly sell online and deliver to customers’ homes when traditional consumption channels such as restaurants and beer bars are also temporarily closed due to the epidemic,` Mr. Dat said.

Businesses 'pivot' to Covid-19 to survive

Mr. Nguyen Tien Dat, leader of a travel company, delivered beer – a side business – while the company’s main operations were facing difficulties.

The `horizontal` business of online beer business does not bring in `huge` revenue, but this owner expects the business to still survive the epidemic, waiting for business opportunities from tourism when the epidemic subsides.

Also turning to other businesses to `compensate for that`, Mr. Hung – Director of a furniture company in Hanoi said that if he only kept one segment at this time, `trying hard, he would only survive`.

Opening a new business is completely opposite to the field he has been pursuing for a long time, but he is still confident that it will succeed.

`Getting acquainted with a new business field right now is quite difficult, profits are not high, but having work to do during the epidemic season and waiting for new opportunities when the epidemic is over is still a great joy,` he confided.

But not every boss who turns into a new business reaps `sweet fruit`.

Last year, when the epidemic broke out and wooden furniture trade slowed down, Mr. Hoang and a few friends turned to the restaurant business in Binh Thanh district.

To maintain the new business through the `storm` of the epidemic, he and his shareholders continued to contribute an additional 2 billion and planned to open the restaurant in April. Once again, the plan was delayed when the government announced

6 billion VND was poured into opening a new restaurant, but the real revenue from the beginning until now is only one or two hundred million VND.

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