Latin American entrepreneurs: imagination to survive the coronavirus
The COVID-19 pandemic has had serious effects on the economy of almost every country in the world. Governments have been forced to allocate billions of their budgets to help businesses that have been forced into temporary closure and workers who have lost their jobs.
But in the midst of this gloomy panorama, the imagination and adaptability of thousands of companies and entrepreneurs have surfaced, and they have known how to reorient their businesses, seek alliances or create new business strategies to overcome the crisis successfully.
In Chile, for example, the municipalities of Rengo, Cañete, Huechuraba, La Calera, Pirque, Coelemu, Loncoche, Puqueldón and Punta Arenas enabled, in alliance with www.TiendaCerca.com, a georeferenced digital platform similar to large ones like Marketplace, so that local businesses can offer their products and services by creating their own digital store; this is aimed at reactivating commerce and serving as a support for entrepreneurship.
Small businesses unite to become competitive
This platform, which is delivered completely free of charge, both to municipalities and to individuals, allows transforming a traditional enterprise into an electronic commerce, in which entrepreneurs can offer their products or services through the digital system georeferencing their business, thus allowing them to coordinate payments and deliveries.
The municipalities that are implementing it are in charge of validating the entrepreneurs before listing them, through a personalized version for each commune.
From the moment a business is registered until it can start selling, the process goes very fast and in a few hours it could be offering its products,” says Pedro Berríos, CEO of Communis, a startup supported by CORFO and INCUBA UDEC, which created TiendaCerca.com. So far it has already gathered more than 700 digital stores.
A similar initiative has emerged in Colombia. Through SuperVecino, shopkeepers and small merchants can inform their customers in real time about the situation of their points of sale. They let people know if they have a product out of stock, if they have had problems with the supplier or if they require financing to remain open.
They also receive incentives, such as promotions and union training to operate during the emergency. The platform has 40,000 registered shopkeepers in the country and has sent 496,000 mailshots so far, according to the daily Dinero.
These joint projects, which generate important synergies, merge with others of an individual nature, and show us the ability of many Latin American entrepreneurs to reinvent themselves and survive in times of coronavirus.
A good example is that of Don Ovidio, an establishment founded in 2016 in which consumers can taste and buy coffee brought directly from the field, while learning about coffee culture.
The crisis left them on the brink of closure, but they decided to create a website via Wix, they improved their social networks and began to bring the experience they had in their physical establishment to the homes of Colombians. The digital revolution had a positive effect on the business, and they formed alliances to sell the coffee beans of the farmers who trusted them through the internet, offering affordable prices to compete in a market with many players.
Keep the brand, change the product
“The crisis unleashed by the COVID-19 pandemic is a golden opportunity for organizations to rethink their goals and even completely transform their industries. In this sense, they must redesign the way they work, modify their mentality and business structure to adapt quickly to changes and become resilient in order to continue operating when faced with any adversity that may arise”, says Alfredo González, Country Head of Tata Consultancy Services in Colombia.
This was done in Argentina at the beginning of the global health crisis by the famous Quilmes brewery, which together with Restinga, a Mar Chiquita SME, developed a sanitizing alcohol made from fermented beer must that was subsequently distilled. The company donated a good part of the production to healthcare staff in public hospitals and primary care centers. Although it was an emergency response to a critical situation, the example of Quilmes and Restinga illustrates well the capacity that many companies have had to adapt or reorient their business to the new reality of the market.
In Toronto, Canada, STEPS, a public art organization that fosters dynamic, inclusive, and resilient communities through unique arts initiatives, has supported one of the areas with the highest concentration of businesses in the capital of Ontario in order to energize the area. It has done so by developing 41 art installations in collaboration with 20 local artists. From sidewalk decals to store displays, the installations foster, according to their promoters, a sense of community.
The objective is to ensure that customers lose the fear, return to the streets and regain the habit of visiting physical stores. It will not be easy. According to data managed by the Mexican online sales association Asociación Mexicana de Venta Online (AMVO), two out of ten businesses and brands expect online commerce to represent at least 40% of their total sales by 2021.
Online trading is here to stay
In addition, according to the most recent data from the association, in October 48% of Mexicans consumed or bought online, compared to 43% in June and 40% in April. In the hardest months of the lockdown, 31% of consumers made purchases online, and in October that number had already reached 39%.
In recent months thousands of companies throughout Latin America have sought formulas to compete with the great e-commerce giants, such as Amazon or Walmart. Many of them have found a niche offering more direct and faster services, avoiding intermediaries, and guaranteeing deliveries in a short space of time. In the absence of the logistics of large multinationals, they play with flexibility and adaptability to move in a terrain full of challenges.
Sebastián Ojeda, director of Beetrack, a technological solutions firm for the logistics sector, explains that not only are chain stores competing in the face of the complexity of the situation, but the manufacturers of various products are also selling directly to the customer, skipping intermediaries altogether.
As ImagenRadio recently reported, major e-commerce players, such as Amazon, Walmart, Liverpool, Soriana and The Home Depot are investing millions of pesos in Mexico to establish themselves in the world of electronic trading.
Amazon, for example, has announced the opening of two distribution centers and 12 delivery stations after investing 100 million dollars. Walmart doubled its delivery capacity and its competitor, Soriana, decided to partner with Uber, to deliver orders to its customers. What seems clear is that these investments and change of strategies are not going to be temporary. Everything indicates that when the pandemic disappears, online commerce will continue and will be one of the main consequences of the changes in habits imposed by the confinement.
Many citizens who were not regular users of these trade services have discovered their advantages as a result of the pandemic, and they are no longer going to give them up. As explained at Soriana, the largest self-service chain in Mexico, online demand has remained almost as high as when the pandemic was declared in March. And this appears to have a direct effect on employment.
The ’10 Trends Post Covid-19′ report by the digital innovation consultancy firm Opinno argues that in the future, companies will have to explore collaboration models: “Companies will have to learn to collaborate and work in tandem and on platforms with startups, researchers, universities, academic and philanthropic institutions, and this ecosystem will allow them to anticipate things and protect themselves against future crises ”.