Swiss trading conglomerate DKSH is pivoting strategies in Thailand following the pandemic, accelerating its digitisation and leveraging its resources to prove it is the trusted partner for business coping with the aftermath.
The company that deals in healthcare, fast-moving consumer goods (FMCG), technology and performance materials, has made finding the right balance of winners and losers in the new Covid-ravaged economy -- a top priority to not only survive, but prosper and be able to give back to society in return.
"One of the strengths of DKSH is we adapt both to the times -- that's why we've been around so long -- and also to the clients and the customers needs," said Carl Johan Soderstjerna, Head of Country Management of DKSH (Thailand) Limited.
"A key factor for us when the Covid-19 outbreak started was making sure that at no point our shipments and distribution stopped reaching our clients and the patients that used our products, as that could have severe consequences to the people that depend on us."
HISTORY OF HELPING
DKSH has been in Thailand over 110 years and distributed branded goods on behalf of clients in Thailand. Not to mention it is the sole distributor of Levi jeans and Lego products in the country. Thailand is DKSH's largest market, making up 32% of total sales in the first half of 2020, ahead of Malaysia and Singapore.
It operates 15 distribution centres and two factories for its products across Thailand, employing about 12,000 people.
DKSH operates 15 distribution centres and two factories across Thailand, employing about 12,000.
The company also operates 220 Levi's stores. During the lockdown, when most of DKSH's retail stores had to close, the company converted its production facilities to produce face masks for its employees in the offices and warehouses.
Throughout the pandemic DKSH has made various donations including 2 million baht in supplies and cash to hospitals, while staff raised over 600,000 baht to buy essential goods for poor residents in Bangkok. DKSH also donated excess ethanol from its industrial operations to be used in the making of hand sanitisers.
SNAPPING TO ACTION
In response to the lockdown DKSH sent 80% of its staff to work from home, leading them to quickly digitise its remaining processes in order to smoothly transition to the newly mandated working culture.
"We have accelerated our digitisation journey quite a lot, which is a process and a focus area we already had before," Mr Soderstjerna said. "Despite many of our teams working from home, we had to process orders from clients and customers, continue delivering medicine to hospitals and consumer goods to stores across the country."
Essential consumer goods worth 623,000 baht were donated to the Department of Land Transport to support motorcycle taxi drivers.
DKSH had to rapidly sure up its supply chains in response to closed borders and the nightly curfew in order to avoid delays and product disruptions at the beginning of the lockdown.
"We have almost 600 trucks going around Thailand 24/7, so we had to quickly get involved with the authorities to get the official approvals in case our trucks got stuck in the roadblocks they could continue to deliver on time," he said. "There were a lot of these practicalities we had to figure out on how to continue operating." DKSH also brought on board external epidemiologists to help them put together health and safety protocols that safeguarded all staff in the distribution centres, factories and offices.
FINDING WHAT WORKS
While more stark than previous years, the company saw many of its verticals surge and decline. Despite retail taking a hit due to the nationwide closure of non-essential businesses, the company was able to focus on market performers.
"Where we have really gained is through the understanding of how flexible we are as a company and how adaptable we are, that we actually can manage to run the company with half of us working from home," Mr Soderstjerna said.
Barrels of ethanol were donated to hospitals in remote areas of Thailand to help with hand sanitiser and disinfectant production.
"We are now discussing how to utilise these lessons and techniques going forward, so I think any company now is starting to ask if they need all these offices or whether they could allow their employees more flexibility?"
To manage the retail slump, the company boosted its online operations through e-commerce platforms like Lazada, while opening up new sales channels on social, through Facebook and Line.
For its client Lego, DKSH's sales staff turned to Facebook to promote its products on different groups and pages to open up online sales for the formerly brick-and-mortar dependent product.
It also focused on strengthening its e-commerce department, seeing a surge of new orders during and after the lockdown, which is growing exponentially, but still only represents a small part of overall sales.
"There had already been a plan to scale up our e-commerce operations before Covid," he said. "What you see now is the door has been opened much faster than we expected, and we hope to take advantage of that trend."
He says moving forward, the company will have to be hyper-vigilant about changing consumer patterns, not just from offline to online, but from everyday lifestyle changes responding to the "new normal" regulations and public consciousness.
Thailand has long been a retail-centric country, and DKSH does not expect that to change significantly in the near-term, but the pandemic has certainly changed how shoppers behave and what products prove most essential during a dual financial and health crisis.
The company will continue to focus on core fundamentals that have allowed it to last in the country for over a century, but will also look for new paths forward to compete with insurgent trends and competitors.
The D-Give campaign donated 2.2 million baht in cash and medical supplies to support healthcare workers at Ramathibodi and Rajavithi hospitals.
While it will take time to fully recover from the shock to the entire market, DKSH is confident in its core businesses to weather the coming years of instability and uncertainty.
"Go back 110 years when our trading company first came to Thailand, almost all the other trading companies around at the time are now gone, they don't exist anymore, while DKSH has successfully adapting over time," Mr Soderstjerna said.
"Covid-19 is an unprecedented crisis that we must get through together as a company, as a country, but I think because we are diverse, adaptable, flexible, and have fully engaged employees, it has allowed us to come out on the other side, confirming the resilience of our company."
