Challenges

In terms of the current state of the global pandemic of COVID-19, many business
encounters or face difficulty during the pandemic happen. It is indeed unexpected by
everyone, as the global pandemic of COVID-19 has a break out in the year end of 2019,
many entrepreneurs are facing challenges for their business. The effect of COVID-19 has
been causing a huge impact towards the global market world in a negative way. Small
companies are the backbone of every economy, and with the global economic impact of
COVID-19, their protection is more crucial than ever. Small firms, or small enterprises, have
been increasing consistently over the past decade or so, and have been recognised by the
government as a source of economic growth and job opportunities. However, due to the
constant increasing rate of the coronavirus epidemic, most of these businesses would struggle
to survive in the current climate for more than 5 months (Engidaw, 2022).

The first challenges that IKEA face was struggling with supply problems due to driver
shortage. As expected, many people are afraid of going out to work in during the first phase
of COVID-19 out-burst is happening in Malaysia. The government then issues MCO 1.0, all
the citizens are advice to stay at home, all physical stores that are not related to daily essential
products are asked to be shut down for 2 months until the situation to get better over the time,
the same goes to IKEA company in Malaysia. The government also limited the number of
working employees in the workplace. Thus, it causes labour shortage with transportation, raw
materials, and sourcing all impacted. As the government issues for a lockdown in the first
phase of the global pandemic which is MCO 1.0, many physical stores are forced to be
closed, this is to ensure all the employees’ safety and health. In the same time, employees are
asked to wear a mask, sanitize or wash their hand regularly, and measure temperature before
they get in the workplace, it is also to ensure that it could help in decreasing the rate of
positive COVID-19 patients by the Malaysia government.

Another challenge is that the IKEA is losing their potential customers, as a high rate of
financial problems is face by their customers during the MCO 1.0. Many are losing their job,
and thus it causes everyone to the crisis of financial problem. For IKEA, it also indicates that
they will be losing a lot of customers to visit their physical store during the lockdown because
there is a high level of financial problems face by consumer during the pandemic during
MCO 2.0 in Malaysia. SMEs account for 35% of Malaysia's GDP (Gross Domestic Product)
and 70% of all job opportunities in the country. The lockdown had a significant impact on
SMEs as well as IKEA company in Malaysia, leaving many to confront financial difficulties.
In addition, firms who contributed to Malaysia's export income were instructed to halt
operations during the two-month lockout, leading the economy to fall by 8.3 percent
compared to a negative 1.7 percent growth in 2019. Malaysia announced an RM3.5 billion
trade deficit in April 2020, after 169 months of trade surplus (Low & Arfa, 2021).

Engidaw, A. E. (2022, January 10). Small businesses and their challenges during COVID-19
pandemic in developing countries: In the case of Ethiopia - Journal of Innovation and
Entrepreneurship. SpringerOpen. Retrieved March 6, 2022, from https://innovation-
entrepreneurship.springeropen.com/articles/10.1186/s13731-021-00191-3

Arfa, A. (2021, July 8). How has MCO affected the Malaysian economy? Taylors University.
Retrieved March 7, 2022, from https://university.taylors.edu.my/en/campus-life/news-
and-events/news/how-has-mco-affected-the-malaysian-economy.html