Due to coronavirus and quarantine, many businesses face limitations and difficulties. AIN.UA spoke with Yaroslav Azhnyuk, Petcube CEO, about whether the company felt the impact of the coronacrisis and how it plans to cope with it.
How quarantine and coronacrisis affected your business?
We have been impacted since the beginning of February. Production in China and production delays were 6-7 weeks. Last week, things have more or less returned to normal at the main factory in Shenzhen, but now the production has been halted in Malaysia.
We knew it would be in the United States and in Ukraine, so we prepared a little in advance. The first cost-cutting measures were taken in late February, realizing that in addition to supply difficulties, there would also be a decrease in demand in the United States.
Are you already experiencing a slump in demand, or are you projecting difficulties with your investment?
There is definitely a decrease in demand, as expected. We expect it to get worse before it gets better. Investments are now all at pause until the world and investors understand how the situation will unfold globally.
The investors’ sentiment is worse than in the 2008 crisis.
What measures do you take in your team (switching to remote work, cutting salaries, and costs in general)?
We switched to remote work two weeks ago. I wrote earlier about salaries: despite a significant decrease in income, we are not terminating anyone’s employment.
Starting in April, all Petcube employees, including management, will receive the same salary, a “minimum basic income,” until it becomes clear how the crisis will unfold, how big of a blow will be dealt to supply, consumption, and lending.
Our forecast is based on the assumption that the impact of the crisis on demand will remain until July-August, we looked at how much we can allocate to the payroll and divided it by the number of employees.
This strategy is relevant for companies that, like us, believe that in 2-4 months, things will start to improve, demand will grow and their business, in general, will not lose relevance. This is an approach from the standpoint of humaneness and collective security, while radical capitalists should make radical cuts.
Are there any difficulties with paying office space rent?
We can already see that rental prices are decreasing. Residential spaces have become cheaper by a third in the past week, with commercial real estate likely to drop even more.
How much longer can you survive the current situation, given that quarantine has been extended in Ukraine?
The thing that helps us is business diversification, apart from the sale of devices that everyone knows about, a significant portion of the company’s revenue is from sales of Petcube Care. In addition, there is a subsidiary company Ozero Design, a design production studio with clients from all over the globe.
We will stick it out. The only question is in what form and to what world we will return when it blows over.
