COVID-19 has conquered the whole world in an epidemic threatening the health of man and economy. Despite its geographical location and proximity to China, Kazakhstan and most of the Central Asian countries were among the latter who faced this epidemic and declared quarantine. For almost two months, most of the businesses were facing a previously unseen crisis that nearly immobilized the country. Many companies had to rebuild their system radically; many people have lost their jobs for various reasons.
ACT Kazakhstan brought together experts from various business areas to discuss how the pandemic changed the market, which trends lost their relevance, and which ones intensified, and how all that affected the behavioral habits of consumers. The discussion was held online, with the participation of leading marketers and CFOs of large businesses: Anton Kim (ForteBank), Yana Kononenko (CloudPayments), Bakhtiyar Sabdenaliyev (UIB University), Asker Ismankulov (QSR LLP (Burger King TM)), Nurken Rzaliyev (partner of ChocoFamily Holding, CEO of RahmetaseApp), Chingiz Nurazkhanov (AvtoGaz Trade LLP (Gasenergy)). Such a range of industries and opinions made the discussion lively and productive. This article provides a quick overview of the discussion held.
We tried to find out the experts’ opinions about has the world ever faced a crisis comparable to what is happening now and whether the accumulated experience is helping Kazakhstani companies to cope with the situation. We have got an answer that what is happening today cannot be compared with past crises because this economic crisis comes together with complete isolation that leads to new realities. One expert commented that the current situation affects not only the preparedness of companies for such challenges but also the psychological state of the employees. According to the experts, today, the rate of reaction to challenges, as well as the market’s ability to quickly adapt to consumer needs are important as never before. This day, we are not in a crisis but at the stage of transition from the customary rules of the game to new rules. The current moment has exposed the pain points in business that seemed acceptable in the past, but now they hinder business growth and development.
“This is not a crisis; this is the end. The end of the customary life. And the recovery period will take at least one and a half to two years.” Anton Kim, ForteBank
Talking about the end of quarantine and the new challenges, some experts consider it necessary to take into account the specifics of this situation and the possibility of resuming quarantine measures, since the virus may repeat itself by this fall and bring in a second wave which may be followed by undesirable consequences for the business. Experts believe that the business is facing a global task to automate its processes and build communication with customers in a way to secure them.
“Autumn is coming, and we can wait for the second wave. We have a small window of time when we can adapt our tools to be better prepared for the second wave.” Asker Ismankulov, QSR LLP (TM “Burger King”)
Regarding possible changes in marketing approaches after COVID-19, some experts believe that many companies will reconsider their views on digital tools. Even companies that previously neglected these resources will have to face these changes. The most convincing argument is that most offline sales today are losing money (except for food and medicine). The experts believe that the companies that were not focused on digital before will have to go digital actively.
“When the crisis is over, a big construction will start. Everyone will start building for the future, if, God forbid us, something happens tomorrow again, or there is some the second wave.” Nurken Rzaliyev, the partner of ChocoFamily Holding, RahmetApp CEO
However, according to some experts, despite the digitalization, the demand for classic advertising will remain; and TV and outdoor advertising will continue to work.
“Billboards will live!” Chingiz Nurazkhanov, Avtogaz Trade (TM “Gasenergy)
Speaking about changes in the organization of corporate work and future corporate development trends, the experts share the opinion that the areas of business able to give up working in the office will switch to the remote regime, either completely or partially. COVID-19 has become a powerful impetus for the development of e-commerce. Experts note that even those companies that previously have not considered their presence in the electronic market, today are well aware that this is a new opportunity and a chance to maintain and even expand their businesses. Experts specializing in e-commerce note the growth and predict positive dynamics of purchasing goods via the Internet, as well as the development of new habits among customers (e.g., non-cash payments).
“New realities affect the purchasing habits of Kazakhstanis. Previously, the state had repeatedly set the task of popularizing non-cash payments, but the process was slow. The frequency of using payment cards has increased with the advent of banks that offer a user-friendly interface and commission-free money transfers. Quarantine has contributed to the emergence of various online services such as food delivery, grocery delivery, etc. since many companies saw new opportunities in e-commerce. It is known that it takes 21 days to form a habit. We had much more time.” Yana Kononenko, CloudPayments
Even though COVID-19 brought negative trends for business, experts in the e-commerce industry share the opinion that the quarantine resulted in new opportunities for Kazakhstani business. E.g., previously, the consumers could place orders on international platforms, but today they have an opportunity to use similar local services. Experts believe that this trend may continue, and the consumers’ confidence and loyalty to Kazakhstani producers will increase. However, not all experts agree that this trend embraces a large part of Kazakhstani population. Not all consumers have access to and the opportunity to enjoy the benefits of digitalization. The reason for this discord might be that our experts focus on different consumer segments.
“Not so many people can use non-cash payments. Perhaps, they would like to, but they do not have such an opportunity. People just below the middle class cannot order online, work remotely, as well as those who have lost their jobs because of the impossibility to stay physically at work or due to the layoff. They will not change their habits that much.” Chingiz Nurazkhanov, Avtogaz Trade (TM “Gasenergy”)
The experts did not reach a consensus on the expected changes in consumer behavior. Some experts believe new trends will emerge, such as technology, online learning, remote work, online shopping, increased health care, and a focus on proper home nutrition. Respectively, the emergence of new trends will drive the business to develop and remain competitive in the market. Discussing whether there will be a V-shaped economic growth after the end of the emergency, experts agree that it is better to be a little pessimistic and not expect a sharp growth in this situation.
Despite some differences of opinion, the experts agree that teamwork and team spirit are the keys to survive the crisis and ensure sustainable business development.
“Strong IT team and internal corporate culture will be the main driver of further growth.” Bakhtiyar Sabdenaliyev, UIB University.
* ACT Kazakhstan will continue a series of panel discussions with experts in various fields.
