Overcoming crisis, businesses enjoy ‘new normal’
Amid the difficulties caused by Covid-19, the Vietnamese entrepreneurial spirit remains and businesses are using every possible means to maintain production and adapt to the new circumstances.
All cinemas in the country had to close for four months because of Covid-19. The cinema chains don’t have revenue, but still have to cover expenses. Businesses in the movie industry could be on the verge of bankruptcy if they only reopen early next year.
Coffee chains are in the same situation. Running a system of cinemas, Bui Quang Minh, Chair of Beta Group, said cinemas have closed four times since the pandemic broke out, and each phase has lasted many months.
“I wonder how I will manage everything when cinemas are allowed to reopen,” he said.
Most of the cafes of The Coffee House also had to close during the fourth Covid wave. CEO Le Ba Nam Anh said as the number of shops and fixed costs are high, the cash flow imbalance is challenging the entire system.
During the two peak months of the lockdown, when the strictest control measures were imposed, the orders via the app and website were frozen, which led to reduced connections with clients. Meanwhile, workers have had to work from a distance.
|Amid the difficulties caused by Covid-19, the Vietnamese entrepreneurial spirit remains and businesses are using every possible means to maintain production and adapt to the new circumstances.|
Because of the pandemic, many businesses have fallen into deadlock or have been dissolved. The General Statistics Office (GSO) reported that in the first nine months of the year, 45,100 businesses had to suspend operation for a definite time, an increase of 16.7 percent over the same period last year, while 32,400 businesses stopped operation and followed procedures for dissolution, an increase of 17.4 percent. And 12,800 businesses completed procedures for dissolution, up by 5.9 percent.
This means that 10,000 businesses left the market each month during the period.
Struggling and waiting for spring
Many businesspeople understand that it is now the time to implement new ideas, activate startup projects, and find new ways to adapt to new market conditions.
Minh believes that now is a golden time to figure out plans for the future when the pandemic is contained. People’s entertainment demand will increase significantly after a long time of stress because of lockdowns. This will be a great opportunity for movie producers and cinema developers.
For Beta Cinemas, Minh is still trying to optimize expenses on premises, and operation and workforce costs. He has taken time to develop new cinema models and franchise businesses and is seeking opportunities to cooperate with other cinemas or chains to overcome difficulties.
Anh of The Coffee House said he is optimistic. He understands that the chain has to ‘live with the pandemic’ at least until the end of the first quarter of 2022.
Anh, who spent many years working in the finance sector and witnessed the collapse of big brands such as Bear Sterns and Lehman Brothers, said he doesn’t believe the “too big to fail” concept. There will not be any exclusion for the food and beverage (F&B) industry in Vietnam.
Bigger chains will easily lose control if lacking support from partners, including banks, landlords, suppliers and workers.
Minh of Beta Group hopes that he can bring a low-cost cinema chain model – Betal Lite – to suburban districts and towns throughout the country. He believes the cost of VND2.5 billion for one screening room and 2-3 screening rooms for one cinema complex would be reasonable to ensure standard quality.
The Beta Group has jumped into two new business fields – asset management (A.Plus Home) and education (Crimson Business Institute).
The first A.Plus Home project in Hoang Cau, Hanoi was introduced with 35 closed apartments. The occupancy rate was 80 percent after two months of operation and is now 100 percent.
According to Anh, the assets of The Coffee House before the pandemic included a chain of 180 shops, 2,500 workers and 1 million clients. He said he needs to increase the number of clients and the value of each client.
He revealed that the chain will develop another business model which will be in charge of take-away sales and door deliveries by this year end.
A survey by Deloitte found that 77 CEOs of polled corporations believe the pandemic has also brought more business opportunities.
Phan Vu Hoang, Deputy CEO of Deloitte Vietnam, commented that similar crises are all tests for business managers. The managers who have firm purposes will overcome difficulties.
Le Phung Thang, Deputy Chair of the Vietnam Young Entrepreneur Association, said that opportunities exist in difficulties. There will be businesses which become giants after crises.
“Bears and squirrels will store food before their hibernation periods. In spring, they wake up and quickly recover their health. And so can businesses. They need to take the initiative during hibernation and get ready to renew themselves when spring comes,” said Hoang Nam Tien, President of FPT Telecom.
All businesses have to struggle hard to survive the pandemic. However, they are keeping calm and optimistic, because the ‘alluvium will come after the floods’.
Prime Minister Pham Minh Chinh congratulated and sent his best regards to all Vietnamese entrepreneurs to mark Vietnam Entrepreneurs' Day (October 13) during a meeting in Hanoi yesterday.