COVID-19 has had on significant impact on the economy and transformed the market landscape.
Businesses are revisiting their strategies as the pre-COVID operating models and assumptions have been challenged. Retail and banking are reimagining their businesses, primarily driven by changes in end-customer behaviors as they adjust to a new practical reality.
Nishit Gupta, partner and DS & iX leader at IBM ASEAN, offered insights into what companies need to be aware of as they prepare for the new normal, speaking at a recent webinar titled “Emerging Stronger in the Next Normal — Fresh Starts and False Dawns and Emerging Industry Platforms.”
Trend 1: Consumer behaviors will continue to evolve across ASEAN based on demographics and economic recovery. The underlying truth is that low consumer and business confidence is leading to reduced spending. This has a direct impact on the retail and banking industry.
“Statistics based on data published by Asian Development Bank, overall GDP of Singapore will shrink by 4%, and Indonesia has recalibrated their growth forecast of 2020 to 0.4% to 2.4%, which is half of what they had originally forecasted,” said Gupta, citing the ASEAN Policy Brief dated April 2020.
Trend 2: Micro, Small and Medium Enterprises (MSMEs) are at risk considering their limited resources to wait out the pandemic. “Small and medium enterprises (SMEs) and micro-SMEs (MSMEs) are the hardest hit, especially in the services sector, which constitutes 43.8% of the ASEAN workforce. The airline industry, which contributes most to the services sector, is under severe pressure with a reduction of flights ranging from 90%-99%,” said Gupta.
Gupta discussed the top three trends in the retail and banking industries:
“Amidst all the adversities lie pockets of opportunity,” Gupta observed. In this crisis, companies have expedited their digital transformation and are placing bets on creating business platforms to solidify competitive advantage and differentiation. Governments have emphasized the dependency on digital trade and business platforms to bounce back.
A platform allows companies to drive value from data by offering personalized experiences and services. A better experience and service leads to the stickiness of consumers, which results in a network effect, leading to “winner takes it all.”
Gupta advised companies to adopt a six-step process to build an “Industry Platform”.
To schedule a discussion today to jumpstart your digital transformation plan, visit: http://ibm.biz/cdotrends
Image credit: iStockphoto/Melpomenem