If there’s one industry travelling along OK amid the coronavirus chaos aside from toilet paper manufacturers and supermarkets, it’s delivery services.
As the stockmarket on Monday plunged almost 10 per cent – its biggest since the 1987 crash – Domino’s was one of the few companies to end with its shares in the black as it assured investors lockdowns of countries around the world hadn’t interrupted pizza deliveries and customers had “responded well” to its initiatives, including “zero contact delivery”.
Meanwhile, supermarket giant Coles unveiled a temporary suspension of deliveries to customers other than those in “genuine need” and global behemoth Amazon said it would hire an additional 100,000 staff across the US in fulfillment centres and delivery network to meet the “surge in demand”.
“I started my career in 2002 just after the dot com bust. I've never seen anything like this,” says William On, co-founder and joint CEO of Sydney-based Shippit.
“One would argue that this is worse than the GFC, where we're actually talking about impacted behaviours right now, whereas during the GFC...Australia was very much shielded from (the worst of it)."
On, who launched Shippit in February 2015 and oversees delivery for hundreds of retailers across Australia, says while stores are already experiencing declines in foot traffic, they've seen certain online sales jump.
“It's in key categories, so staples …are on the rise. But discretionary sales like things in fashion, cosmetics, etc are on the on the decline. That's what we're seeing from an economic and from a business perspective,” he says.
Ganesh Chandrasekkar, Westpac's general manager of small business banking, says it’s still “early days”, but a number of business customers had already reached out to the bank after being impacted by the coronavirus outbreak. He says while the next quarter would be particularly challenging for the economy, the government’s initiatives to support small businesses were “really good news”.
“Westpac is here to support its customers, most major banks actually have packages in place that can help you manage your cash flow, (so) make sure you're making use of that, because if you can get through this time, managing through the challenges you've got, there is great opportunity ahead,” he says.
On says for Shippit, a former Westpac Businesses of Tomorrow winner, the biggest stress is dealing with softer macro-economic conditions and business confidence, while still being able to attract the best talent. He adds that in the past week, the business has spent a lot of time on continuity planning, risk assessments and speaking with investors in case a “doomsday scenario” transpires.
“What we've done from an investment perspective is ensure that we've got the capital there and the runway there for us to be able to ride this out,” he says.
“But importantly as well, Asia has done a very good job in responding to the pandemic …and …we've launched in Singapore, in Southeast Asia … and we're really looking at the global (opportunity).
“The biggest help that we could get … is getting consumer confidence up and getting people spending money. That's going to drive business growth. It's going to drive business investment…they've tried to deal with interest rates – that isn’t happening. So … it's got be through government policy.”
Westpac in partnership with the Davidson Institute has created a to help businesses plan and respond to the COVID-19 pandemic.