Mr. TRAN BANG VIET, General Director of Dong-A Solutions, discussed various difficulties faced by businesses today, in a talk with Saigon Investment. According to Mr. Viet, it is not capital but customers and the market that businesses need to look at.
JOURNALIST: - Sir, the fourth wave of the Covid-19 pandemic has had a very strong impact on almost all businesses, and one of the difficulties that businesses currently face is lack of capital, while support packages are not easy to access. What changes should businesses make to survive this difficult phase and once again get back on their feet, despite the continuing risks caused by the Covid-19 pandemic?
- In my opinion, when selecting the businesses to support with capital, we must prioritize only healthy businesses, those that are capable of growth and those that will contribute towards creating more jobs and more benefits for society. Most businesses that have run out of capital are weak businesses or industry models that are old, capital-intensive or labor-intensive, and whether a pandemic occurs or not, such models are bound to become ineffective in the future. We are moving towards an industrial revolution 4.0, and we cannot forever favor capital and labor-intensive business models. If we are to move towards an economic evolution, then businesses that are flexible and adaptable, will be the models that will succeed in the future.
The biggest difficulty confronting businesses today is not lack of capital, but customers and markets. All businesses need to look at their areas of activity and core competencies to be able to resolve these issues. It is important to observe how related customers have changed during the pandemic, and understand their needs and how they will be satisfied. Therefore, by actively supplementing technology, methods, and human resources, customer needs must be met.
A glaring example is that of restaurants that have reopened after the pandemic but are still seeing empty tables, because customers are still afraid of the disease or feel that the cost of food is now too high. Besides this, people have started to enjoy more home cooked meals during the pandemic. New customers feel less need to eat out in restaurants.
However, if you observe, you will see that many people like to cook at home but are afraid to explore and prepare ingredients. This could be the niche market for restaurants to respond to in the future. In the changing times in future it will be the businesses that are sensitive to customer demand that will succeed, while the businesses that do not respond well to the market will find it difficult to continue. We cannot support inefficient businesses anymore with capital, as this money should help those businesses that have the ability to rise up, dominate and survive in the current market.
- Sir, has the pandemic brought opportunities for businesses to transform and change, which process took a very long time previously?
- This fact is obvious and very clear to see. Firstly, under the pandemic conditions, people have become accustomed to working from home and learning remotely, which saves a lot of time and money. When working remotely, efficiency is much higher, although labor productivity in affected, but in the long term will increase significantly. This will be a good transition.
Secondly, before the pandemic, it can be seen that business seemed to be quite easy, and sometimes just opening a business store could bring in profits. However, now this does not really bring high efficiency, and even causes waste when labor productivity is too low. The pandemic forced businesses to turn around, especially those businesses with high overheads that cost a lot of money such as space, capital, and human resources.
We must now see which models take up less space, less inventory, less capital and require less human resources. These will be the questions for future businesses that want to survive. When businesses are even just 5 percent more efficient than they were before, the economy will experience more positive growth.
Thirdly, the pandemic has caused workers to look at themselves and prepare themselves for a more modern and professional working environment. In the past, business owners could respect their long-term employees and ignore efficiency, but in the current difficult time, employees are focusing on real values. This means that workers must be more capable and work harder, so in the long run the overall productivity will increase. The pandemic has made businesses vulnerable, but it has also woken up businesses to invest more in customer need, and become more efficient and competitive.
- Sir, although 2022 is considered to have many potential risks, it is forecast that Vietnamese businesses can still find solutions and promote stronger digital transformation because of their good adaptability. What is your opinion on this?
- A realistic situation is difficult to forecast, but I think the economy will be faster and more efficient. This is a positive thing. Some businesses will shut down because their model is inefficient and inappropriate, but new businesses will spring up and replace them. Startups, mergers and acquisitions will be more exciting in the coming time. To a certain extent, this change will be like a new blood transfusion in the economy, because new people will have new and more effective and innovative ways of thinking and doing.
The current digital transformation is still very defensive, but the pandemic is also providing a push to speed up this process. It is also important to emphasize that the success of the digital transformation is not for all businesses, as it will depend on the field of operation, size, and thinking of leaders and individuals in each enterprise.
- Thank you very much.