Kuala Lumpur, 26 January 2021 - The pandemic has been hitting the service industry hard, forcing service providers to explore new avenues, cut costs, or pivot completely. It is especially hard for small businesses and individual workers as they have considerably smaller savings than their larger counterparts. In 2021 however, Recommend.my’s annual survey showed a surprisingly resilient recovery and optimism expected for 2022.
Over the last two years, home and local service industries have been considerably challenged to face pandemic situations. In understanding the challenges that service providers (SP) faced during the pandemic, 18.4 percent faced difficulty in finding local manpower with the right skills, 17.3 percent have been impacted heavily due to the rising cost of materials (especially prevalent for the home improvement sector), 13.8 percent stated that they are uncertain of the customer demand which is heavily influenced by the current situation.
When surveyed however, more than half of SPs based in Malaysia that are affiliated with Recommend.my, the leading home and local services platform in Malaysia, have successfully maintained or even increased their revenue in 2021 when compared to 2020. “In 2021, the changing trend of home and local services have impacted the industry greatly. However, through our survey we have found out that 57.5 percent of our service providers managed to maintain or even increase their revenue in 2021 compared to 2020. This indicates that 2021 was a year of recovery for our service providers,” says Jes Min Lua, Co-Founder, and CEO of Recommend Group.
Breaking it down further, 20.8 percent of survey respondents have successfully adapted and increased their revenue by up to 25 percent and 9.2 percent of survey respondents have increased their revenue by 25-50 percent. On the other hand, it is important to take into account that over 17.5 percent of SMEs surveyed felt a decline in revenue by over 50 percent.
The home improvement sector has been hit harder by the pandemic, especially due to rising material costs and reluctance of customers to spend more money. Home maintenance vendors however have seen an uptick in average revenue as they are specialised in repairs and simple installations. These include electricians, handymen, aircon servicing technicians, and plumbers. One of the contributing factors is that many home maintenance professionals could continue operating during Movement Control Order (MCO) as long as it was for essential repairs such as water leaks and electrical blackouts.
“We expect the volume of home and local services projects to increase in 2022 as 60 percent of businesses are optimistic about recovery by the end of 2022. We are also taking steps to acquire more high-quality service professionals to meet the demand,” says Jes Min Lua, Co-Founder, and CEO of Recommend Group. “Recommend Group has already vetted over 10,000 companies and independent service professionals in Malaysia and is actively working with them to standardize service scope and prices, improve service quality, enable cashless payments, and provide strong service warranties and insurance protection.”
The survey was conducted among 120 SMEs in the home and local services industry in Malaysia between 15 - 28 December 2021.
