Michael Jordan once said this about obstacles: climb it, go through it, or work around it.
And work around it, indeed.
After the disastrous announcement of multi-retailer Naiise’s liquidation last Thursday (15 Apr), it seems like affected vendors have turned to social media to help them tide over this tough period.
Over 100 Naiise Vendors Form FB Group to Figure Out How to Get Back Missing Payments
Even after Naiise shut down, numerous vendors have continued with business even without a physical store, instead opting to use social media such as Facebook to promote their business and establish a larger online presence.
Some vendors have even collaborated with each other to increase sales, such as FEN Perfumes and Fabriques Asia who did a joint live auction last week.
Current and former vendors of Naiise have also formed a private Facebook group called “Naiise Vendors.”
The group is where updates regarding the Naiise situation are shared, and members can seek help regarding problems encountered when trying to get back their money.
The group, which had over 100 members just two weeks ago, has now grown to 268 members.
After announcements of Naiise’s liquidation, it was revealed that even before COVID-19, the company had in fact numerous problems of delayed and missing payments as early as 2016.
It has also been reported that many vendors had stopped receiving payment since early 2019.
Currently, numerous Naiise vendors are owed thousands of dollars which have yet to be repaid; whether or not they can successfully retrieve the full amount owed still remains a big question mark as vendors await updates from Naiise’s liquidators.
How the Deal Between Naiise & Vendors Works
When vendors decide to work with Naiise, it is on a consignment basis—meaning that the company would only pay its vendors when their products are sold. Of this pay, Naiise takes a commission of around 35%.
Experts Weigh in: Advice for Vendors
The act of setting up their businesses online is largely viewed to be a step in the right direction.
Professor Kapil Tuli of the Singapore Management University (SMU) and director at the Retail Centre of Excellence states that it is good that vendors are “trying to create their own presence”, commenting that the key to success is how vendors will “engage with the audience to create a positive word of mouth”.
Many people have also commented on Naiise’s consignment deal structure, pointing out that consignment deals are risky and unsuitable.
On this, Professor Kapil Tuli warns vendors of being completely dependent on the company without having any contingency plans. Emphasising the need for prudency, he points out the need for careful cash flow management, saying that vendors should consider “how much of a hit [they] can take if the channel folds up.”
As with all things related to finance and economics: be ready for externalities and don’t put all your eggs into one basket.
Retail Sector Badly Affected by COVID-19, But Not All is Lost
Of course, with the COVID-19 pandemic haunting us all, Naiise is not the only retail company to have gone under during these trying times.
According to CNA, more than 4,000 retail firms had shut down last year—a figure that is already lower because of the support measures introduced by the government.
And if you thought things would get better after a year… well, you thought wrong. CNA has also reported that in the first three months of 2021 alone, more than a thousand companies have run out of business.
That being said, however, economists are of the opinion that the economic outlook for the retail sector is improving. With Singapore’s economy being on the recovery track, economist Kim Eng says that employers would be able to raise their employee’s wages, which would then lead to “higher consumer spending”.
So maybe, all hope is not lost—it’s probably just taking a while.
Feature Image: Facebook (QUEENSHOP)