We have almost reached the last quarter of 2020, a year which has been unlike any other. It started with a virus scare from China in January, which became the reality for Singapore and Korea in February, and then by March, it was spreading so quickly that the WHO ended up declaring it as a pandemic. This pandemic affected every aspect of our daily lives—social interactions, healthcare, business, traveling, and much more. Within the arena of business, the impact of the pandemic ranged from restructuring industries, changing the business landscape permanently, unemployment and bankruptcies, emergence of new business models, government intervention to aid the economy, etc. 

There have been a few key driving forces resulting from the pandemic. The most important impact was that the pandemic tested the risk management capability as well as the capacity expansion ability of many digital businesses. It acted as a stress test—opening the eyes of many organisations on how redundant their business models were, and how wrong they were not to keep an option to quickly go digital. For digital companies, this challenge was worsened by the quick shift of almost all demographics to digital services, and their capability to quickly increase capacity and/or modify their nature of business was tested. At the same time, many businesses required a quick shift in their business model. A good example is that of Grab and Food Panda in Singapore—within March of this year, both companies had managed to shift their delivery and driver fleet to food delivery as well as grocery and other necessities, as the market needed swift mechanisms of delivery due to the lockdown.

Another key driving force is the emergence of a contactless economy. This did not have much of an impact on purely digital services (i.e. the product itself is digital, such as a game or a software or a movie), but businesses focused on a physical product or service required changes in their business models—to either ensure safe service or contactless delivery. Finally, another key driver is that of getting employees adjusted to working from home. Across the world, most digital companies have opted for work from home or minimising presence in the office—which has broken down the workplace/home balance, and it became a major challenge for companies to manage employees' motivation, belongingness and to maintain the organisation's culture. New practices as weekly Zoom Hangouts, virtual travels, online team games, online group exercise/yoga sessions, etc. became more and more common across many organisations.

These driving forces impacted digital businesses considerably in Bangladesh as well. One crucial characteristic of many digital businesses in Bangladesh has been that most of them are start-ups. Only a handful few have reached a mature and large size. As such, within almost six months into the pandemic, we are seeing quite a few digital businesses struggling to maintain regular operation. A big part of the problem is that the services they are offering are still not core business service to their clients, and as a result, for many digital businesses, the market has shrunk. So, one consequence of the Covid-19 pandemic will be that many digital businesses will understand the vulnerability in their business models, and also will have to be better at contingency and risk planning. Added to that, many digital services, such as online grocery, and mobile wallet services, suffered due to sudden surge of demand, as people started to reduce physical activities and maximise their work through digital services. So, the pandemic also highlighted how quite a few companies were actually ill equipped to handle demand surges. Furthermore, the psychological impact on work from home was quite heavy. For many digital businesses, the work did not stop, but most of the work needed to be done remotely (work from home), so this took a tremendous psychological toll on most of the employees. Finally, many of these businesses that were startups faced a lack of funds or withdrawal of funds, as investors saw a potential of the economy plunging into a recession.

However, there is indeed a silver lining to the challenges faced. There is this saying: "what does not kill you, makes you stronger"—and that can be said to hold true for most businesses when going through this pandemic. Those businesses which could pivot their models, change and modify them quickly enough, or quickly handle capacity limitations, should not only survive, but be able to thrive. In Bangladesh, companies such as bKash, ChalDal, Shohoz and a few others have managed, to some extent, to face the shock of the pandemic, and then utilise the changes brought about by it. Even a few predominantly brick and mortar businesses have managed to harness the shock to pivot their business models, examples range from banks that have managed to service a majority of their customers and their bill payments through digital channels, the rise of telemedicine and pharmaceutical delivery. In fact, for a country like Bangladesh, the long term impact of Covid-19 on the digital business arena can actually be beneficial—it reduced the inertia of digital service adoption, and even increased digital adoption across demographics which many would not have expected—even the aging portion of the pyramid are subscribing to bKash, Pathao and many other digital services.

To sum up, markets such as Bangladesh present an interesting picture in times of such global crises. On the one hand, these markets are hard hit due to their vulnerable policy infrastructure, inefficient response by the government, and by markets quickly turning conservative. But on the other hand, these markets also represent the forefront of opportunity, as they present the largest structural holes to work on, for business models to develop to fill up these structural holes, and to improve the overall infrastructure of the economy and the country. Especially for digital business models, which, in the new normal, will play a major role, we can expect that in the aftermath of the Covid-19 shock, there will be better and more robust players in the market!

Khan Muhammad Saqiful Alam, Commonwealth Scholar, National University of Singapore, is Analytics Adviser, Intelligent Machines Limited.