Checking Temperatures: How Businesses in Taiwan Are Coping with COVID-19

Companies are trying to figure out how best to respond to new and unique challenges, while staying vigilant about the unexpected.

As the COVID-19 pandemic continues to spread, wreaking havoc on economies throughout the world, companies are struggling to come up with ways to keep business operational, as well as employees and clientele safe.

Taiwan, for its part, has managed to keep the virus well contained, thanks to early and effective government intervention. Besides taking useful precautionary measures such as mandatory mask wearing and temperature taking, very few companies have had to resort to anything more drastic.

In a flash survey conducted by AmCham Taipei in April regarding the effects of the pandemic on member companies, more than 62% of respondents said that they have no plans or intentions to lay off or furlough workers. Furthermore, Taiwan’s unemployment numbers have experienced a much smaller increase than in countries like the U.S. In March, the jobless rate increased only slightly to 3.71%.

Still, business leaders are feeling more cautious lately. Most understand that the situation could change very quickly and that preparation for the worst-case scenario is essential.

In mid-April, dozens of sailors who were allowed to disembark from the recently returned navy vessel Panshih after a five-day quarantine later tested positive for the coronavirus. The incident reinforced a sense of apprehension and vigilance in Taiwan’s business community.

Meanwhile, some enterprises in the hard-hit travel and tourism industry are using the downtime caused by the drop in business to take care of tasks that may have otherwise been scheduled for later in the year (or which they may not have had time to do at all).

For hotels, right now is an excellent time to take advantage of staff training courses offered by Taiwan’s Tourism Bureau, says Achim von Hake, general manager of The Sherwood Taipei. His hotel’s room occupancy rate has plummeted to around 5% on weekdays because of strict immigration controls the government put in place in March, barring any foreigner without residency from entering the country. Business picks up a little over the weekends when more domestic travel occurs.

The Sherwood Taipei is undergoing staff training and staggered renovations during the downtime caused by the COVID-19 pandemic. Photo: The Sherwood Taipei

Von Hake says he agrees with the restrictions, which he notes have kept the number of confirmed COVID-19 cases much lower than in neighboring countries. In any case, the hotel has been able to maintain a consistent flow of patrons to its high-quality restaurants and bar, even with social distancing measures in place. This includes a modest increase in demand for private dining rooms. The Sherwood is even offering a premium NT$350 Taiwanese-style lunchbox option for takeout, which von Hake says has sold very well lately.

In addition to the continued employee training, the Sherwood is also undergoing renovations that were originally scheduled for the late summer months when business travel is usually at a low ebb. Von Hake stresses that because the renovations are being staggered, there will be very little disruption to hotel operations. The Sherwood, he says, will remain open for business throughout.

In the retail sector, companies are coming up with new ways of keeping crowds minimal while still maintaining steady sales volumes. The pressure to encourage social distancing in brick-and-mortar stores where space is sometimes limited can present some tough challenges to businesses.

Visitors to Costco locations in Taiwan nowadays may notice some new arrangements meant to cut down on the number of people in the store at one time and increase the physical distance between shoppers. In Costco’s popular indoor food court areas, all seating has been removed, drastically reducing traffic there.

Costco has removed all seating from the food courts at its 14 Taiwan locations to reduce the number of people congregating in one area. Photo: Costco

Also, whereas previously four people were allowed to enter the store using one membership card, this number has now been reduced to two at a time. Costco’s Senior Vice President for Asia Richard Chang says that this change hasn’t really affected business or the flow of members through the stores because “people are going to buy what they need to buy, but instead of bringing the whole family, just two of them are doing the shopping for now.”

Chang also highlighted the company’s efforts to increase cleaning and sanitation of its 14 Taiwan locations. Such efforts include wiping down frequently touched surfaces such as shopping cart handles and display tables once every hour, if not more frequently. Chang noted that even the solution used in the floor-scrubbing machines used during off-hours has had sanitizer added to it.

“Back in 2003 during the SARS crisis, we also had to implement similar protocols,” says Chang, adding that many of the elements in these protocols continued to be applied even after SARS was contained. “Our members really appreciate the SSOPs [sanitation standard operating procedures] we have had in place ever since.”

Keeping things going

For companies with significant in-house teams, decisions must be made on how to effectively keep staff safe and healthy while still maintaining business continuity. For some, that means forming a task force and coming up with contingency plans for unexpected events.

According to Citibank Taiwan Chairman Paulus Mok, the company acted early, forming a Crisis Management Team in January. The team, consisting of senior company executives, is tasked with “reacting quickly to an evolving situation and providing updates to the staff regularly,” Mok wrote in an emailed statement to Taiwan Business TOPICS.

In addition, Mok says, each department within the organization has been assigned Infectious Disease Coordinators who “help collect information from employees and speed up communication with the staff.”

Teams can also be formed across companies within an industry. Cigna Taiwan CEO says that he and other insurance providers have formed a chat group with the head of Taiwan’s Insurance Bureau on popular messaging app LINE. Group members send daily updates regarding any possible outbreaks in their organization and coordinate on how to handle events like the Panshih incident. “It’s a good way of tracking, measuring, and controlling” the virus’ spread within their industry, says Shields.

Of course, maintaining distance between staff members is also a consideration for many companies. Arrangements such as requiring that all employees in a department work from home – or dividing them into different teams that come into the office on a rotating basis – have helped companies begin easing into what could become a necessary transformation of the way they operate. AmCham Taipei’s COVID-19 Flash Survey found that almost 84% of responding member companies have instituted some form of remote working plan, although 24% said that these arrangements were hurting productivity.

Cigna’s Shields, however, says that while more than half of the company’s 1,400 employees at 17 offices throughout Taiwan are working from home, this setup has not negatively impacted operations. It does give rise to some interesting challenges, though, as some functions involving the personal data of clients and policy holders cannot be performed outside of the office because of Taiwan’s data protection laws.

“So, one of the things we’re working on with the regulator is a feasible business continuity plan, since we didn’t originally have a virus shutdown policy,” says Shields. “The one we had in place was more for one to three-day disruptions caused by earthquakes or typhoons.”

But if an insurance company has to shut down its offices for two weeks or more, can insurance – paying claims – be classed as an essential service and thus be performed by employees at home? Shields says that this is the case in other countries around the world where Cigna operates, and he hopes that Taiwan’s Insurance Bureau will come to the same conclusion.

The growing push to have office employees work from home illustrates the need for companies that have not yet fully undergone a digital transformation of their business to do so at a much quicker pace. One of AmCham’s member companies, which declined to be named in this report, said that while it was one of the earlier adopters of a digital strategy in its field, the COVID-19 crisis has caused it to accelerate the changes it is making to bring its business into the digital era.

Whether the effect is short-term or turns out to be long-lasting, businesses in Taiwan are hurting. The AmCham Taipei COVID-19 Flash Survey found that for 77% of the companies who responded, the pandemic has had a moderate to severe negative impact on their business in Taiwan. Of those companies, 66% said the biggest impact was on demand for their products or services.

Cigna’s Shields says that even for the health insurance industry, business has slowed quite a bit. “People are concerned,” he says. “Their portfolios have taken a hit and they’re tightening their belts. They’re therefore going to be more cautious for the medium to long-term.”

On the other hand, certain businesses are having trouble keeping up with a rapid increase in demand, especially in the areas of retail and consumer goods. Around the time that the virus began spreading much more quickly to other parts of the world beyond China, many retail outlets experienced a rash of panic buying, particularly on items like toilet paper.

And while Taiwan has been relatively sheltered from the kind of scenes witnessed in Hong Kong, Singapore, and the U.S. – completely barren supermarket shelves and exasperated consumers fighting over the last of sought-after goods – it was not totally immune to similar impulses. In March, government leaders and business owners came out to reassure the public that production of toilet paper and instant noodles would be increased after supermarkets and stores around the island temporarily sold out of those items. Premier Su Tseng-chang went so far as to encourage people to buy as much as possible in a post on Facebook.

Chang of Costco says that panic buying was an issue at their stores in late February, but only for a very brief period. The situation calmed down subsequently, though demand at Costco for certain items has stayed high.

Chang says that the company’s house-brand, three-ply interfold toilet paper is the biggest selling item among its Taiwanese members. He notes that Costco has benefited greatly over the years it has operated in Taiwan from building strong relationships with local vendors. Almost all of the Kirkland Signature products sold in its Taiwan locations are sourced in-country, he says, meaning that even if a particular item sells out, the stores can easily restock by the next day.

The banking sector also appears to be faring relatively well. Citibank Taiwan has not experienced a drop in business since the start of the COVID-19 outbreak in January, says Mok. “During these uncertain times, Citi remains well-positioned from a capital and liquidity perspective,” he says. “Despite the difficult situation, Citi Taiwan delivered great results in Q1, 2020. Both our institutional and consumer banking businesses reported solid growth.”

Bright spot

Taiwan has earned well-deserved international acclaim throughout the COVID-19 crisis for its effective approach to combating the disease. Businesses in Taiwan agree: a staggering 95% of respondents to the AmCham COVID-19 Flash Survey said they were satisfied with the government’s efforts to control the virus.

Countries around the world are taking notice of the way Taiwan has ramped up its production of personal protective equipment (PPE), notably of medical masks. Production capacity in Taiwan went from around 1.8 million face masks per day in January to 17 million now. That number is expected to rise to 19 million by mid-May. A surplus of PPE has led Taiwan’s Ministry of Foreign Affairs to begin donating items like face masks and thermometers to other countries where such supplies are lacking, including the U.S.

Private industry in Taiwan has also offered to pitch in, according to an emailed statement from the American Institute in Taiwan. Numerous companies have approached AIT offering to donate PPE and medical equipment desperately needed back in the in U.S.

“After vetting, qualifying donations and proposals from qualifying pharmaceutical and medical device companies have been sent to the U.S. Federal Emergency Management Agency for consideration and distribution to where they will do the most good,” the statement reads.

Working with Taiwan to secure medical supplies helps the U.S. build more diversified supply chains, reducing its reliance on China for such items. It could also shine a bigger spotlight on Taiwan’s efforts to fight the virus both within and outside its borders.

“Taiwan has an opportunity to further bolster its reputation as a reliable supplier of quality medical supplies,” the statement from AIT concludes.