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Sep 21, 2021 / 16:05

Vietnamese businesses in New Zealand: Out of Covid-19 storm

According to the credit rating firm Centrix data, about 45% of rental and property services have failed to pay their debts this year.

2.30 a.m.

It was the twenty-sixth day of the current lockdown starting from 17 August in Auckland, New Zealand. Nam Pham, the director of Cozy Tiling Ltd, an Auckland tiling company, was still working on his computer: calculating the costs, giving quotes to his customers, and managing the company’s marketing campaigns.

 A worker of Cozy Tiling Ltd at work in New Zealand. 

Outside, lightenings and thunderstorms were striking on Auckland’s sky. A big storm is coming.

Inside, Nam was striving to paddle his company out of a new storm, coming from the current lockdown.

For Cozy Tiling and dozens of newly-established companies in this big city, this Covid-19 lockdown is also like a storm, challenging their survival capabilities.

“This lockdown unexpectedly happened at the construction industry’s busiest season when my company with local tilers was getting a number of new projects. However, everything was stalled without notice,” said Nam.

“We had to hurriedly wrap up everything in all of our three ongoing projects, just right in that night of the announcement of Covid-19 Alert Level 4 in Auckland and the whole country.”

Covid-19 Alert Level 4 in New Zealand means everyone must stay at home in their bubble. People can only leave home for an essential personal movement like shopping for groceries or access necessary healthcare.

Although the Government introduced Covid-19 financial support schemes, available to businesses, worth billions of dollars, the businesses still struggle to pay the costs and staff’s salaries.

“To get the support, we had to prove that we experienced a 30% drop in revenue over a seven-day period at the increased alert levels as a result of the alert level increase. However, actually, we suffered a 100% drop in revenue as we had to stop all of our activities while we still paid all the costs such as office rental, insurances, staff wages, and other operating costs,” Nam said.

For Cozy Tiling, they got around NZ$1,200 per week from government support while they weekly spend at least NZ$3,000 on the operation costs.

Also in Cozy Tiling’s shoe, a big café with 10 staff in Auckland’s North Shore run by Thai Nguyen lost thousands of dollars due to the lockdown.

Even before this lockdown, the situation was not promising. According to the credit rating firm Centrix data, about 45% of rental and property services have failed to pay their debts this year. In hospitality, the rate was about 35%, while about 20% of construction and retail businesses have defaulted on credit.

So, this lockdown is quite a hit to them.

According to ArunChaudhari, chief executive of the Taranaki Chamber of Commerce, around 60,000 business people in the country signed a petition, calling for more financial support.

He told Stuff that he has heard stories of desperation from businesses.

More thunderstorms

“I felt worried, at the beginning as our contracts with clients might be delayed and even canceled due to the lockdown,” said Nam.

Thai Nguyen shared the same feeling with Nam for the unstable situation of her business.

This actually did happen. Two weeks after the lockdown, some of Nam’s clients due to the stagnation of cash flow and worries about potential pressure of escalating costs canceled the contracts. “They wish to save money for their business operation and other priorities. “

Worse, some of the other company clients asked for a delay in making payment for the projects Cozy Tiling finished.

They “just informed us they would pay us soon. But when is soon? We don’t know,” said Nam.“We understand the situation. So, we do not want to push them. Many businesses are negatively affected: cancellation of contracts and postpone of payment.”

ANZ chief economist Sharon Zollner told Newsroom that “it is a pretty stressful time for businesses and costs are rising.”...“Project delays and cost over-runs are likely as at the moment the chances of cost overruns and delays are definitely turbocharged by the shortage of material and workers and those risks can be difficult to control for.”

Out of the Storm

“What are potentials for my business’s future? I asked myself this question many times. The bad goes with the good, always,” said Nam, director of Cozy Tiling.

“We should turn the challenges into opportunities.”

Some days after the lockdown, Nam started his new plan to restructure and renovate the company’s operation. “I was too busy with various projects to have time to look back on what we did. Now, it is time.”

Nam with his business partners drew out new marketing strategies for their company. They plan on reaching out to new clients. In the past, they focused on other construction companies as their primary clients. Now, their clients will be extended to household clients as this is the season when their demand for renovating their homes is at the highest.

“It is summertime: sunny and dry, suitable weather for building, and the festive season will come soon.”

During this lockdown, Cozy Tiling is implementing its digital marketing strategies: developing and polishing the company’s website and other social media platforms on the Auckland Tiler forum and building up the social identity of the business.

"A part of these strategies is that the company offers community members free consultation and advice relating to our experts so that they can DIY fix their homes when they're stuck in bubbles. The company connects with potential clients via these consultation conversations and also their D.I.Y videos."

In New Zealand, Google search is an effective tool to help clients know and access the company’s services. So, with the new SEO campaign, Cozy Tiling is on the top 1 of Google search.

The company digitalizes and virtualizes its communications activities with clients. One month later although still in the lockdown, these changes really work. Clients started to contact Nam’s company, which then guide them on how to make measurements and record visual tours around their homes.

The company then offers them quotes, responds to their queries, and sign contracts with deposits made by the clients. All these steps are made online.

“Our schedule till the end of the year is full. Some slots for next year have been filled. We just wait for the end of lockdown to set everything off.”

“It can be a good opportunity for us. We find another door for us.”

Besides, Nam’s company also paid for the online course on the design from the University of California for its staff. “We plan to offer a new combo of design-renovation services for household clients, not commercial ones.”

Like Nam, Thai Nguyen also started some changes for her café with a totally new menu and inside décor.

The storm ends after heavy rains. It is 7.30 am, Nam walks out to his garden. The sun is shining and flowers are blooming. The spring comes.

 “I heard a saying that when flowers bloom so does hope,” said Nam with a bright smile.