Business model

SME notebooks: Covid-19 has rendered our business model of corporate gifts irrelevant. Here’s how we adapted

Small and medium-sized enterprises (SMEs), which make up 99% of businesses in Singapore, have felt the impact of Covid-19 heavily. TODAY’s Voices section features testimonials from small business owners and managers about the highs and lows of running a business during the pandemic.

In this article, Mr. Danny Zhang, co-founder of Gift Market, describes the impact of the pandemic on his corporate gift business and how he turned it around with the help of experienced consultants and mentors.

Gift Market was founded in 2013 to help our clients build relationships with their stakeholders through memorable corporate gifts.

Before Covid-19 hit, we relied heavily on direct sales of products that our customers used for trade shows and corporate meetings.

Our role was largely to print our customers’ logos on products such as bottles and bags, with little added value.

During the circuit breaker in 2020, our revenues dropped.

Many customers canceled orders because in person events were banned.

We operated at a loss, with sales dropping nearly 80% year-over-year and inventory for peak seasons gathering dust in the warehouse.

Still, we weren’t worried about the long-term impact on our business.

Using the severe acute respiratory syndrome outbreak of 2003 as a gauge, we hoped that Covid-19 would subside within weeks, or at worst, months. Employee morale was still high.

But as Covid-19 became a global pandemic with no end in sight, uncertainty and fear began to set in.

Uncomfortable questions arose.

What would we answer for our employees? I was preparing for the birth of my first child. What was I going to say to my six month old…pregnant woman ?

Very quickly, we painfully realized that our economic model was no longer relevant.

To survive, we had to fundamentally change the way the company works.

But how? It was unprecedented and we weren’t sure we could successfully transform the business, so we asked for help.

Luckily, we came across the Enterprise Singapore business agency’s Enterprise Leadership for Transformation program.

We reviewed our business models with experienced consultants and mentors, and returned to the drawing board in January 2021.

Although physical events were canceled and most people were working from home, our clients still needed to cultivate their stakeholders.

Our mentor recommended our company to adopt a unique gifting solution for our customers, from the consultation for the gift vouchers, the supply, the packaging, until the delivery.

It’s a hassle-free all-in-one service that builds on what we’ve accumulated over our eight years in this industry.

Initially, our employees were skeptical, even resistant.

Expanding the reach of our services meant training them and redefining their tasks, and some left the company.

Still, most employees committed to the plan, after increased communication about the challenges we were facing.

Our efforts paid off. The majority of our orders now meet the specific needs of our customers.

Our account managers have been trained to understand our clients’ concerns and what they want to achieve with our services.

We are now well positioned to deliver greater value in the post-pandemic world.

Although volumes have not returned to pre-pandemic levels, our business is more diversified and sustainable over the long term.

For example, although working from home became the norm in September 2021, sales volumes have not declined as in previous periods.

With the gradual resumption of international travel and Mice events (meetings, incentives, conferences and exhibitions), we are confident that the industry will flourish again.

ABOUT THE WRITER:

Mr. Danny Zhang, 31, is the director and co-founder of Gift Market. The company, founded in 2013, aims to help its clients build relationships with their stakeholders through corporate gifts.

If you are an owner or manager of an SME with an experience to share or know someone who would like to contribute to this series, write to voice [at] mediacorp.com.sg with your full name, address and telephone number.