What has been your experience as an SSME business in South Africa?
Covid-19 pandemic has caused chaos across the world’s economy, large scale businesses, and SMMEs alike.
Lockdown
Like everyone else, as lockdowns started in March of 2019 for us in South Africa, I hope and trust that this would end in a month or 6weeks at most.
Most of us didn’t even know the existence of these levels of disaster, even the Government was winging the regulations, as we progress through the lockdown period.
“Hard lockdown” or level 5 as it was called was the most difficult, there was a curfew, minimal trading, limited movement, the economy was shut down almost completely.
The regulations were, at a minimum confusing and had to be reviewed time and again to match the circumstances on the ground.
We had to adopt new ways of living, having to wear masks as we ventured out on essential trips and frequently washed our hands whilst singing happy birthday rhyme, and sanitise and also a new culture of social distancing.
Some of us even started taking all sorts of home remedies to keep the virus at bay, concoctions with ginger, garlic, lemons, turmeric, honey, and so forth, and so on.
Ok, I digress a bit, back to my experience as an SSME in South Africa, the first quarter (Q1) of 2019 i.e. Jan – March my turnover was growing on a year2year comparison.
Things started slowing down end of May, June, and stood still completely in July 2019, onwards, this was a very difficult period.
This was because in Corporate gifting and promotional items industry turnover is heavily dependent on events, conferences exhibitions, launches, etc which, require people to congregate. However, to flatten the curve, congregations were brought to almost a complete halt, as people started to work from home, hence no business from the gifting and promotion items.
Furthermore, I lost one of my major clients during this period and this further adversely impacted my limited turnover.
New markets
Most of the companies in the industry turned to new lines of items that, we knew very little about but had to hit the ground running and learn quickly about disposable masks, gowns, shoe covers, and sanitisers.
Then came the cloth face-masks, and sanitizer dispensers.
We had to learn about the 3-ply masks, N95, KN95, FFP1, FFP2, contactless thermometers, etc. The cost of the masks jumped so much in a very short space of time from less than 50c to over R10 per 3-ply disposal mask, because it was a seller’s market in the beginning. This was ultimately brought under control as the government gazetted prices for these items.
The market started looking for 3M N95 masks in astronomical quantities at very high prices, and on the other side “suppliers” claimed to have these masks in copious amounts. In one mask transaction, there would be between 4 to 7 middlemen, between the ultimate client and the actual supplier.
New ways of conduction business developed as people requested video proof of the stock, and stock videos were flying all over the place.
With experience, we learned, that one video was being circulated over and over again, and soon it became standard practice to request that your name or client’s name be mentioned in the video, and something showing date and time be included in the video next to the stock. The quotations were valid for a few hours 3 at most, if you return the following day the price would have changed or the stock “sold”. Either that or the buyer will be telling you that they found a cheaper supplier. It was a dog, eat dog market.
Then came a time when one of the requirements to do a transaction was a physical sample. The price of the samples was at times, 10times the actual price of the mask, at some point, there was even a minimum quantity for the samples. On one side the “suppliers” were reluctant to sell anything below a certain ridiculous quantity like 20k boxes or so which would be costing millions and on the other side, the “buyers” would not commit to the transaction without verifying the product first. The middle people would not show each other the supplier’s warehouse, in fear of being circumvented and the buyer would deal directly with the “supplier”. In most cases, these transactions come to naught or someone being duped.
I said once, to my assistant who was spearheading these masks transactions, that you are selling each other the same stock because one person would be looking for stock. She would call some else who would call some else and so no and so on till the call made a complete circle and come back to her. Then the other way business was being conducted was that “supplier” would request that money be deposited into some “trust account” before you can even view the product. Some people lost money as they would pay for “3M N95” only to receive the counterfeit Chinese KN95 version.
I remember one day I drove with my assistant to pick up some lady who had a definite stockpile on the N95 blue. Picked up this lady from her house and drove to Midrand to meet her counterparty who supposedly had the stockpile, got there in Midrand to the supposed warehouse, but there was no stock because apparently, this was just a rendezvous point. We had to wait for another person who was supposed to take us to where the stockpile was. I waited for 45min and decide I should carry on with my day. I left the lady there with her colleagues and left with my assistant and continued with my task for the day. Around about 2 pm my assistant called the lady to find out if there was any progress, this was 4hrs later, and still no movement. Now the story had turned a new twist there was a “Doctor” guy in the East Rand who had the stock, and she was waiting for him to come to her. We drove to some other place that my assistant had been told about, which had stock. We got to some house in Germiston, only to meet some gentleman there who didn’t even seem to have a cooking clue about what we wanted, drove back. Only to be told by my assistant in the morning, that the lady we left in Midrand didn’t get anything.
The face-masks, sanitisers, and sanitiser dispensers were now new lines in our product mix, as it became a requirement for one to venture into public spaces.
The cloth masks the specifications have been changing since the beginning even the WHO recommendations have been changing as the experts learn new information about the virus.
The industry had to adapt and introduced branded masks, sanitisers, and sanitiser dispensers. Another line that the industry promote was the floor stickers, Covid displays banner, and posters. These new lines have been steadily growing in turnover, over the past few months especially when there was the partial opening of the economy and we went into the lower levels of Emergence disaster period.
I have learned that the nature of corporate gifting and promotional items industry has been changed completely and one can’t rely completely on the current mix of gifting and promotional items. One has to re-strategies and re-thinking the product mix and business model, if one is to survive post covid period because the industry as we knew it has changed.
If you don’t move with the changes you will be left behind.
As they say “ the only constant in life is change” change is upon us.