#EMAsks CFO of Sociolla
“As a new joiner, and as a CFO, the current situation has certainly benefitted me to understand what type of workflow can be moved online, what sort of skills that people need to have, so that when we need it — it can be deployed right away. Those are the very key lessons that we have learned”
Those are the positives that Easy Arisarwindha, who recently joined as the Chief Financial Officer of Sociolla, drew from weeks into her job. With the increasing complexity and weariness being felt by almost every facet of human society, e-commerce has tricky upsides to capitalize and difficult challenges to overcome. As the leading online shopping destination for beauty products, Sociolla is at the forefront of the industry experiencing the pandemic arc. EMA Partners Singapore Managing Director, Morgan Wee had a chance to learn the CFO’s thoughts about joining a new organization during a global pandemic.
Morgan: In the weeks leading into March when you were going to be on your first day of work, what was in your mind in terms of what work was going to be like at Sociolla?
Easy: Initially, my family and I did not think the coronavirus would so greatly impact our lives. I believe we read the news about what happened in China, but it is a 6-hour flight away from China. It did not sound like it was heading to Indonesia. When it began to affect other countries, Indonesia was one of the last to declare that we have been affected. There was a sense of, I would not call it denial but rather disaffected by what was happening. Economic numbers did not come out too fast, and then places started to close down, but there was a feeling that this was going to be temporary. To answer your question, I came in feeling that the world was beautiful and it was going to be okay.
Morgan: That is fair enough, I do not think Indonesia was the only country that felt that way because it was so far away and so forth. So what has it been like now after 2 months in the job, what has happened between the ‘world is a beautiful place’ and today?
Easy: It is like that Disney song, ‘A whole new world, every turn a surprise!”. That song really sums it up. I started my job and everything was still very rosy — Indonesia was doing much better than last year, our GDP projection was still going very well but the second week into the job, we sort of started knowing that this is coming our way very very quickly. My child’s school also started practicing ‘studying from home’. That was when I knew and we all collectively knew that, it is going to hit us and it is going hit us really fast. So, we shut the office in the third week of March. It has been vastly different in terms of what I expected to do, which was to build a relationship with my co-workers before I actively start to take action to just jumping into the thick of things completely without even being in the office. So, I was very lucky in having that 2 weeks of knowing them but really, it is a very short amount of time to do what I wanted.
Morgan: It has indeed been a shock to many businesses. But it has been said that e-commerce will emerge as the biggest winner of all. What do you think of the statement? Is that proving to be the case with a jump in your numbers?
Easy: I would not call it a jump. At the start of lockdown, people were still getting used to working from home and shopping from home. There was a sense of temporariness that this was going to be over in a couple of weeks. During that time, what we did quickly was to take some time to shift a lot of the resources completely to organically grow our digital platform. Now, we are reaping the benefits.
Morgan: And sometime last year, Sociolla entered the physical retail space. Your CEO made a statement saying that, “Ultimately with consumer products, people want to touch and feel in order to enhance the buying experience”. In the current situation, has the thought changed? Do you see any changes with the O2O approach?
Easy: We view Sociolla as an ecosystem. More of a wholesome experience that the customer gets, then naturally they will buy it through whatever channel that they are going into. Even though we have offline stores, it is not meant to cannibalize the online platform and vice versa. Though the stores are closed right now, we continue to invest in opening up new stores and we continue to expand our physical presence, not just in Jakarta and Surabaya but also in other major cities. We feel that statement remains true, customers still want the ‘touch’ and ‘feel’ aspect but in the absence of it, it does not mean that the business stops.
Morgan: You mentioned about business plans to expand into other cities. But given business climate today, is the business plan still intact, or is there a rethink in terms of delaying it or scaling it down or changing it?
Easy: We are trying to be very flexible in terms of timing and I think we are very fortunate that you can afford to do so. For example, if you were to open an office in another city, we do not have to commit to a long office lease, we can actually commit to a co-working space. The long term goal and the long term view has not changed in any way. People still need cleansers and moisturizers! So the basic premise has not changed and in fact, when people are at home, they have more time to take care of themselves. We are currently seeing a product shift from make-up to more personal care. In the long run, no it has not changed, but in the short run we do try to make adjustments.
Morgan: You mentioned about being flexible, what will be the key parameters for you to decide to move into a country? Is it more the supply chain itself or what are some parameters that you would think about in terms of accelerating in a particular direction or delaying it?
Easy: The fundamentals of the economy of that particular country still has to be intact. In the long term, we know that certain countries can endure the current situation better than others. If we are present in those countries, we should be confident that sooner or later things are going to improve. We want to be there when the recovery happens because we want to be leaders, and not after it does then we will be too late. In terms of the supply chain, we have not experienced deterioration in terms of service in Indonesia yet. We import a lot of our goods from Korea and other Asian countries. We have not observed a delay in shipment so far. Earlier this year, we decided to ramp up our stock in view of the number of stores that we are going to open. So we are quite flexible in terms of moving that stock around. As long as we have those two, I think we should be comfortable to move forward.
Morgan: Do you see the cost of transport going up? Because we hear about shipping lines and air freight cutting capacities.
Easy: It has not hit our books yet. What we have seen happening is some cities in Indonesia locally closing their borders. I think this is going to be tighter because the government just announced that it is going to be even tighter in the lead up to Hari Raya. Fortunately, customers are very patient, they are willing to accept a delay of 3–5 days. We are working on finding alternative logistics in several cities. Regarding the increase in costs, we have not seen that, but we know it is coming.
Morgan: I guess it is a matter of time, if every country is putting up walls, it is going to come. But right now you’re facing last point delivery issue for customers, especially for Indonesia that is so widespread?
Easy: That is right, a big part of our attraction is that we are present anywhere in Indonesia, you can order from Papua, you can order from Makasar. There are very few beauty shops that would have the range that we have, that is our main attraction. When that is no longer viable, then it is a business risk that we need to take care of.
Morgan: Let’s change gear and talk about working from home. You mentioned that Sociolla has reaped benefits because you have put workpieces online and people are working remotely. Have there been discussions — if the current mode of operation is the way forward in the new normal.
Easy: We are still trying to change our working habits, around what is happening. Whether we have decided on what is going to happen when we come back? No. But has this situation benefitted us? Yes, especially for me, as a newcomer and as a CFO, It has certainly benefitted us from saying what sort of workflow can be moved online, what sort of skills that other people have, so that when we need it — it can be deployed right away. Those are the very key lessons that we have learned. For example, when I came in March, we were going to open a few stores in the coming months. We had already selected the beauty advisors and they were already on our payroll. In the current situation, what do we do with them? They want to work and they have the knowledge that we have given them. Now, they are with our customer service! And in fact last week, we launched our virtual beauty advisor. This is a business opportunity that existed before but we did not explore. However, with the current situation, we have no choice but to explore and we have no choice but to execute.
Morgan: That is certainly very smart and quick thinking! You mentioned some skill sets that need to be available whenever you need it. Has there been any thinking about new competency requirement that is emerging for the new normal hirings?
Easy: Definitely, Yes. First of all, the person must not be resistant to technological changes. and secondly, the willingness and ability to help out when what you are doing is no longer relevant.
Morgan: Those are great observations! Thank you very much for your time, It has been really — good to get your candid view on many things!
Easy: Thank you, it has been a pleasure.