Measuring the Struggle of Small-Scale Businesses in the COVID-19 Environment

Abstract

Small-scale business owners are among those who were very affected when the COVID-19 pandemic hit the country. This group supports their families solely through daily sales profits. However, when the country began implementing the Movement Control Order (MCO) from March 2020 to May 2020, it was difficult for this group to survive. Some of them were unable to do business at all, while the majority experienced a significant decline in sales. This study aims to measure the ability of small-scale business owners to survive before and after the COVID-19 period. GIS software (ArcMap 10.4.1) was used to map the ability of small-scale business owners to survive before and after the pandemic. Data were obtained through face-to-face questionnaires conducted throughout the state of Kedah. Findings indicated that several districts have successfully managed the pandemic for economic survival. This was achieved through a well-collaborated effort by the government and NGOs to strengthen certain aspects of these small-scale business and revive their growth. Future work should focus on studying the actions taken by successful business owners in coping with the pandemic environment.

1. Introduction

The COVID-19 pandemic that ravaged the entire country is making history. On 30 January 2020, The Director General of the World Health Organization (WHO), Dr. Tedros Adhanom Ghebreyesus, as early as 30 January 2020, announced that the COVID-19 outbreak was categorized as a public health emergency warning. Starting in China, the virus had already spread to 18 foreign countries with 7834 positive cases in impact and 170 deaths [1]. In the following three months, by 4 April 2020, the number of positive cases reached 1,051,697, and the death toll was 56,986 cases [2]. This increase was so drastic that COVID-19 was declared a pandemic that threatened and disrupted global stability around the world.

In early 2021, the cumulative positive cases reached 83,416,538 cases, an 83-fold spike in just 9 months. The pandemic has not yet subsided, with the highest daily cases of 894,895 cases recorded on 23 April 2021. Even more surprisingly, on 21 July 2021, we saw the highest daily death of 19,835 cases per day [3]. The numbers of increasing deaths are not mere figures but represent the extent of human lives lost. The pandemic brought socioeconomic and psychological miseries to human life around the world [4]. From a psychological perspective, citizens suffered mental health problems during the lockdown periods [5] due to the boredom which consequently intensified their addiction to smartphones [6] and social media such as Instagram [7]. In addition, someone with a history of depression was more likely to experience depressive episodes associated with COVID-19 related stressors compared to those without a history of depression [8].

From a geographical perspective, the pandemic indirectly disrupted the entire human ecosystem via the global economy, with a significant impact on productivity [9]. Florida et al. [10] stated that the pandemic affected the overall economic structure and geography of the economy, including the employment sector, housing selection, as well as the system and role of the city itself. The global economy faced a downturn where most economies shut down, thereby increasing the employment losses due to successive lockdowns [11]. All categories in society are no exception but developing countries and low-income countries faced the brunt of the pandemic. This is due to the large financial support needed to respond to the pandemic in terms of healthcare and the restabilization of the economy. The pandemic resulted in damages comparable to the 1929 crisis which only required 9 to 12 months to recover [12]; the pandemic primarily affected the healthcare sector in the span of few days [13]. Significantly, the conditional variance of the markets was bigger during the pandemic than during the 2007–2008 global financial crisis [14].

When the COVID-19 appeared, countries experiencing economic and political turmoil were hit the hardest. Even so, Malaysia was one of the earliest and fastest countries to come up with various responses to protect its people from COVID-19. The government continues to focus its efforts on limiting the spread of COVID-19 in the community, providing treatment as well as assistance to the people [15]. On 16 March 2020, the Prime Minister of Malaysia took a drastic initial step by announcing Movement Control Orders (MCOs) for all states, including Sabah and Sarawak, from 18 to 31 March 2020 with consideration of the virus’ 14-day incubation period. The MCOs were then extended multiple times with deadlines until 14 April 2020 and beyond [16]. The MCO was implemented not only in Malaysia but also in other countries including neighbouring countries such as Indonesia, Thailand, Philippines and Singapore [17].

The MCO implemented in Malaysia was comprehensive. According to Omar et al. [18], The News Straits Times reported that the implementation of this MCO involved the closure of all government, private and business premises except those classified as essential services including water, electricity, energy, telecommunications, postal, transportation, irrigation, oil, gas, fuel, lubricants, broadcasting, finance, banking, health, pharmacy, fire, prisons, ports, airports, security, defence, cleaning, retail and food supply.

All residents were restricted from moving out of their homes except for certain needs. They needed to wear face masks outdoors, wash their hands frequently and avoid crowded places [15]. Only one representative per household was permitted to go out briefly to acquire necessities. The stringent control on movement also occurred around the world where people were allowed to leave the house only to perform necessary tasks such as obtaining food, medicines and water and banking affairs [19].

Additionally, movement was limited to a maximum of 10 km from their residential areas. The police and the army worked together in organizing and monitoring the activities that took place in society [20]. Citizens were barred from crossing the state and district borders except for emergencies, albeit a letter of permission from the police station. Food-based businesses, on the other hand, were urged to limit their operating hours to 8:00 pm. Interestingly, authorities recorded remarkable compliance with the MCOs among the public. The compliance rate scored more than 95%, evidenced by clear roads indicating that people were staying indoors [16].

However, most of these countries felt pressure on their national economies. Due to the MCOs and the limitations in global movement, all economic activities were unable to operate or had to operate minimally. As a result, these actions have reduced economic flows through all types of enterprises in the country [21]. The ones who were severely affected by the COVID-19 environment were those at the forefront of developing the economy of each country, particularly small-scale businesses or the informal business sector and small and medium enterprises (SMEs) [22,23,24,25]. According to Official SME Corporation Malaysia [26], microenterprises or small-scale businesses across all sectors are those with a sales turnover of less than RM 300,000 or less than 5 full-time employees, while the definition of SMEs for small enterprises is those with sales turnovers from RM 300,000 to less than RM 3 million or with full-time employees from 5 to less than 30. Lastly, medium enterprises are defined as businesses with sales turnovers from RM 3 million to a maximum of RM 20 million or with full-time employees numbering 30 to 75.

These businesses, especially small-scale business owners, support their families through profits from daily sales. If they do not run the business, the family economy is crumbles. This COVID-19 environment puts numerous small businesses in jeopardy of running out of money [27,28]. Tsinghua University and Peking University echo this statement in a joint study where they estimated that 85% of small-scale businesses in China will run out of cash within three months and two-thirds of them will face the same fate in two months if the crisis continues [29]. The situation is more critical as Malaysia’s has recovery from the COVID-19 pandemic still has a long way to go.

For small-scale businesses whose financial livelihoods are entirely dependent on their daily profits, the three-month-long MCOS immensely affected their income. The business owners’ daily sales depend on the environment of their operation site where a location with high traffic and visibility to the public is preferred. Traffic flow, be it vehicular or pedestrian traffic, is one of the main factors influencing the location of retail businesses [30]. It affects the accessibility of consumers to the business location.

Autumn [31] stated that public spaces are provided for the purpose of group involvement, and the facilities equipped in these spaces, including street corners, bus stops, road junctions and seating areas, help generate traffic. Hence, public spaces are strategic locations for small-scale businesses to conduct their trade. In line with the findings of Rose et al. [32], business locations are randomly chosen, especially in cities and towns. Small-scale businesses commonly conduct their trade at access road junctions to public transport stop areas, road shoulders and public parking areas, as well as building back roads. There are also small-scale businesses that only run their business in the area wherein they are located. When MCOs were implemented, some of them were forced to stop doing business, and even if they were given permission, their sales plunged because the hustle and bustle no longer existed at the business location [33].

This situation happened to all small-scale businesses in every country affected by the MCO during the COVID-19 pandemic. Policymakers around the world were also faced with the important question of how best to support small-scale businesses and how to reduce the number of these businesses going bankrupt as a result of COVID-19 environment [34]. Although the substantial number of small-scale businesses were plagued with this situation, a few of them adopted innovative solutions. Some pursued the digital route by taking advantage of social media such as Facebook, Instagram, Blog, Tik-Tok, Website and blogs. E-commerce platforms were also utilised which made the business accessible to a wider and more diverse virtual community. According to a survey of small-scale businesses across the Asia Pacific region by one of the world’s largest accounting bodies, CPA Australia, many small-scale businesses in Malaysia reported strong financial and digital technology adoption in 2019, putting them in a good position to manage the COVID-19 crisis and recover rapidly [35].

According to economic sustainability and small-scale business networks [36], the ability of a business owner to manage their business operations is a crucial element in ensuring the sustainability of the business. In Malaysia, ‘ethnic nationalism’ or, in this case, ‘Malay Nationalism’, together with relevant Islamic concepts, creates a strong identity that leads small-scale business owners to venture into and sustain a business. Networking is also an important sustainability factor. Competencies in social skills are necessary for interactions between business owners and other stakeholders, such as customers, suppliers and venture capitalists.

Kohar [36] also noted that Malaysian business owners have embraced a variety of economic sustainability methods, including cost competitiveness, business diversification, technology and product differentiation. However, small-scale business owners, particularly those in rural areas, lack access to technology. All the mentioned tactics also require the usage of technology-related knowledge and tools in order to be effective.

In China, their economic sustainability shrunk during the pandemic. However, China was the first economy in the post-pandemic world to recover from COVID-19 and rebuild its economy. Chinese leaders in May 2020 endorsed a proposal to spend USD 1.4 trillion on ‘new infrastructure’ including electrical vehicle charging stations, high-speed rails and 5G technology which would stimulate economic growth [37]. This is especially important with the accelerating expansion of ICT and digitalization. This study also demonstrated that Chinese SMEs, global and domestic, regardless of their size or market emphasis, stood out as having the highest economic sustainability following COVID-19. The way these small-scale businesses survived and evolved in the surrounding economic geographical pressures during the MCOs period is a wonder. In the United States (US), a survey conducted on traders found that many businesses adapted to the COVID-19 situation in various ways, and over 70% of businesses welcomed the Economic Stimulus Package provided by their government. They argued that this financial assistance was intended to help business owners continue to survive [38]. However, it should be noted that each geographical area or region has different geographical characteristics and factors.

The economic pressures and opportunities to survive are not the same in urban and rural areas. In cities, businesses depend highly on high traffic flows or areas of economic focus, while in rural areas, it depends on the area’s status itself. If the area is a tourism area, then business priorities are geared towards global and domestic tourists. If the area is tourist spot, then the businesses are oriented towards the surrounding community. The success of these new actions and how they can be applied by small-scale businesses is important. Through these actions, it can be determined whether they are able to overcome the critical level of the economy and further improve the business economy or vice versa. These moves can create a new evolution in small-scale business after the MCO and lead to the dynamics of geographical economic change.

To remain resilient, viable and seek new opportunities during the COVID-19 pandemic, small-scale businesses must take transformative and evolutionary actions. This dynamic change occurs when small-scale businesses begin to understand the geographical realities of the economic environment. Understanding the geography around them, such as business location, customer location network, distance between them and customers, supply and demand in the region for their products and how the economic geography can evolve from physical to virtual or digital supply and demand connectivity, is crucial.

This clearly shows the importance of understanding the economic geography of the environment to enable small-scale businesses to find new opportunities during the pandemic. While government aid, such as the Economic Stimulus Package, is helpful during this time crisis, small-scale businesses also need accurate guidance and support in new forms of business, such as digitalization and social media, to expand their network of demand and supply for their products. Therefore, policies need to be improved to provide small-scale businesses with access to digital technology and social media platforms that are in line with the economic geography of their region.

This study was conducted to find out the level of small-scale businesses in the districts of Kedah before and after the COVID-19 environment, with an emphasis on MCO Phase 1 from March 2020 to May 2020. The analysis was conducted to see how small-scale businesses defended their business during the crisis in terms of economic geography. Study data were obtained through questionnaires and face-to-face field interviews. The observed study data were analyzed using SPSS software (IBM SPSS Statistics 22) and the data were integrated with ArcGIS software (ArcMap 10.4.1) for mapping purposes.

This study is different from other business-related studies and COVID-19 studies because the location selection factor in Kedah is unique and because it looks at how people in rural areas interact with the pandemic environment. In addition, this study looks at how geographical aspects play an important role to small-scale businesses through mapping. This study measures the ability of small-scale business owners to survive during the COVID-19 period.

2. Research Design and Hypothesis

2.1. Data

Data were taken from a questionnaire-type study conducted at the study site after MCO Phase 1 in December 2020 to February 2021. Kedah’s Tightened Movement Control Order, coupled with the prohibitions on cross-border movement (overseas and district), created time constraints. The collection of the questionnaire and interview data was conducted randomly across the 12 districts in the state of Kedah (Figure 1) which, according to the Department of Statistics Malaysia [39], has a land area of 9492 km² with a total population of 2.2 million and a moderate population density of 232 inhabitants per km².

The data were collected with the permission of the university and complied with all SOPs that were set. The selected respondents were small-scale businesses. These small-scale businesses refer to people who trade or do business on a small-scale, hawkers, traders without premises that use folding tables and umbrellas, morning market traders, night market traders, traders moving in vehicles and so on. Chong and Stephenson [40] stated in their study that Hassan (2003) has defined the term ‘hawker’ in the context of the Bahasa Malaysia and Local Government Act, 1976, as someone who goes around offering goods for sale, and can be categorized as ‘temporary hawkers’, ‘static peasants ’or ‘nomads’.

2.2. Instruments and Indicators

The questionnaire has five structures. The first structure is the general information of the respondents, the second structure is the business profile, the third structure is the level of business before and after the MCO, the fourth structure is the COVID-19 crisis and the final structure is the perception of traders. However, in this discussion, the focus is given to the third structure, which pertain to the level of business before and after the first MCO phase was implemented. It highlights four main components, namely, the business operation, supply and demand, creativity and knowledge and advertising. These components were selected based on economic geography and business areas as well as their adaption to the COVID-19 environment (Figure 2).

These four components were to investigate two main aspects, namely, the current aspects and aspects of change or development of the business. These four components were also chosen because they are not too heavy. This is because the majority of these small-scale businesses do not have an organized or structured system such as registered SMEs.

The business operation component examines the business’s operating situation, while the supply and demand component looks at product sales operations. The creativity and knowledge component examines business knowledge, and the advertising component focuses on product marketing strategies. The four components align with the study conducted by Fabeil et al. [17] on business knowledge—including online marketing techniques, product delivery procedures, new product development, pricing strategies, pricing during a crisis and customer database management plans during the crisis—for micro-enterprises during a crisis. This study also includes another component, which is sales profit, to provide a more detailed analysis.

2.3. Hypothesis

Kedah, in the north of Peninsular Malaysia, can be classified as a rural state. Kedah has a long history of being a leader in agriculture, particularly in paddies. From the economic aspect, planning at the national level is actively being worked on. However, on a smaller scale, specifically for small-scale businesses in the existing economy, paddy farming is conducted mostly to support daily life. However, this sector suffered heavily from the COVID-19 pandemic, which takes nearly a year-long MCO. Based on the previous literature reviewed, two hypotheses can be proposed:

Hypothesis 1 (H1). 

All business owners in all districts were affected during the MCO period.

Hypothesis 2 (H2). 

Business recovery post-MCO period is challenging for all business owners.

3. Results

A total of 240 respondents participated in this study with an equal distribution across each district. The gender composition was balanced, while the race and religion distribution matched the actual population composition in Kedah, where the majority are Malays and Muslims. The majority of respondents belonged to the working-class category, with ages ranging from 20 to 40 years and 41 to 64 years. Most of them were married. The Sociodemographic profile of the respondents is presented in

Table 1. Sociodemographics of respondents.

Sociodemographic	Sub Sociodemographic	Percentages (%)
Gender	Male	50.8
	Female	49.2
Religion	Islam	89.6
	Buddha	5.4
	Hinduism	4.2
	Christian	0.4
	Others	0.4
Race	Malay	88.8
	Chinese	5.0
	Indian	5.0
	Siamese	1.3
Age	13–19 years old	5.4
	20–40 years old	48.3
	41–64 years old	42.1
	65 years old and above	4.2
Marital Status	Single	23.3
	Married	70.0
	Divorced	2.1
	Single mother	4.6
Business Period	Less than a year	10.0
	1–2 years	22.9
	3–5 years	20.4
	6–10 years	18.3
	11–20 years	15.0
	21 years and above	13.3

below.

When observing the business age and registration status in

Table 2. Business period and registered business.

		Business Period
		Less Than a Year	1–2 Years	3–5 Years	6–10 Years	11–20 Years	21 Years and Above	Total
Registered Business	Yes	6.3%	17.5%	18.3%	12.5%	10.8%	9.6%	75.0%
	No	3.8%	5.4%	2.1%	5.8%	4.2%	3.8%	25.0%
Total		10.0%	22.9%	20.4%	18.3%	15.0%	13.3%	100%

, it is found that 8% have been in business for more than 10 years but are still not registered with any party, such as the Companies Commission of Malaysia, Local Authorities and others. The proportion of unregistered businesses is 25%, equivalent to one unregistered business in every four small-scale businesses in Kedah.

The types of business conducted are divided into four priorities (Figure 3). The first is food and beverages which refers to snacks, fried foods, traditional foods, main foods and various types of beverages. Second, raw materials or uncooked items such as raw chicken, raw meat, vegetables and fruits. Third is clothes and hardware including everyday clothes, bundles, small home appliances and electronic support devices. The fourth is the sort of services offered such as mobile spa, e.g., foot massage, overhaul facilities and others.

Looking at the distance between the business location and the business owner’s residence (Figure 4), the majority (66%) of them choose their business location not more than 5 km from their residence. While 16% preferred a distance equal to or more than 10 km (≥10 km) from their residence, residence in which the chosen areas are considered more strategic and produce higher traffic due to the surrounding community. In terms of working days, 86% of them choose to run their business 6 to 7 days per week (Figure 5).

In terms of gross sales profit (

Table 3. Average Daily Profit (Gross Profit).

District	Before (RM)	During (RM)	After (RM)
Baling	171.5	135.5	319.25
Bandar Baharu	388.5	235.5	456
Kota Setar	294.5	56	261.75
Kuala Muda	413.5	48.5	242.5
Kubang Pasu	212	118.25	201
Kulim	792.75	412.25	624.75
Langkawi	443.25	324.95	551.6
Padang Terap	125.25	22.25	147.75
Pendang	126.5	79.5	111
Pokok Sena	677.5	490.25	519.5
Sik	477.55	499.4	323.75
Yan	385.75	283.75	243.25

), all districts were affected. The average gross profit significantly decreased during the implementation of MCO Phase 1, especially the Kuala Muda and Padang Terap districts. The effect of the MCO causing the daily gross profit in Padang Terap amounted to a measly RM 22.25.

When examined, 81% of these small-scale businesses recorded a decline in their daily profits. This means that for every 100 small-scale businesses, 81 experienced a decline in original profits or before a pandemic occurs (Figure 6). Before the pandemic, the daily profit of all respondents totaled RM 90,171 a day. In contrast, during the MCO, the profit per day of all respondents recorded was RM 48,631. This means that they lost RM 41,540 per day in total during the MCO.

Despite financial pressure on many small-scale businesses, 15% of them saw an increase in their average profits during the MCO period, which contradicts Hypothesis 1. It was found that not all business owners in all districts were affected during the MCO period in terms of Gross Profit. For instance, in the Sik District, the total daily profit increased during the MCO due to the success of some business owners in overcoming pandemic-related challenges and rebounding their business. However, overall, the business level dropped during the implementation of the MCO, as evident from the four main components and sales profit (Figure 7). Specially, in the Kuala Muda district, the level of business post-MCO was unable to recover to pre-MCO levels.

The districts that rose showed improvement in the business level before and after are Bandar Baharu, Pokok Sena, Kubang Pasu, Sik and Langkawi. This situation is clearly depicted in the changes and differences in business level maps by district in Kedah (Figure 8). Although all districts were affected during the MCO period, the Kuala Muda district is most affected or failed to recover to the same level as before the MCO, remaining at a low level even after the MCO. On the other hand, the Bandar Baharu, Pokok Sena, Kota Setar and Sik districts maintained a high business level before and after the MCO. Therefore, Hypothesis 2 is proven to be false.

4. Discussion

Kedah is one of the preferred states for holidays. The advertisements on social media such as Facebook, Instagram, blogs among residents and tourists, as well as various attractions, especially Langkawi, cause the state to gain popularity as a tourist location. Not only is Kedah rich in the beauty of its geographical environment and rural tranquillity, but the variety of traditional foods is plenty. A report from the Department of Statistics Malaysia [41] testified that the percentage of domestic tourists increased from 2018 to 2019 and the amount spent by tourists is sizeable in this state (

Table 4. Key statistics of domestic tourists 2018 and 2019.

Main Statistics	2018	2019	2020
Number of Tourists (million)	14.48	14.83	10.1
Tourist Expenditure (RM Billion)	4.7	5.2	-

Note: Statistics on tourist expenditure by state in 2020 have not been released. Source: [42,43,44].

).

Kedah’s knack for local and international tourism indirectly contributes to the economy of small-scale businesses. Additionally, the state received the highest number of domestic tourists from Kedah itself, as well as Selangor, Penang, Perak and Negeri Sembilan (Figure 9). In 2019, the five main destinations for domestic visitors in Kedah are Langkawi Island in Langkawi district, Alor Setar Town in Kota Setar district, Gunung Jerai in Kuala Muda district and Yan district, as well as Amanjaya Town in Kuala Muda district and Tanjung Dawai also in Kuala Muda.

This state, famous for its rice granaries which attract tourists, malfunctioned due to the occurrence of COVID-19, consequently affecting small-scale businesses. The number of tourists declined in 2020 (Table 4) and 2021. When asked about the ability to survive if the full MCO implemented a second time, 30.8% of small-scale businesses in Kedah felt their business could persist, 27.5 % felt otherwise, while 41.75% were uncertain. This is very serious concern, as the full MCO has been implemented again in 2021 and continues to this day. These findings are also in line with the Department of Statistics Malaysia [44], which found in their survey that 71.4% of self-employed respondents have savings for less than a month. This is not enough for small-scale businesses to survive on if the MCO is reimplemented. The level of businesses, especially to these small-scale businesses, are highly dependent on the traffic movement in the surrounding environment. When the selected location is high traffic movement in the community, the probability of receiving customers elevates. The business levels in all districts before the MCO or before COVID-19 were at low, medium and high levels, and each was considered clustered. From a geographical point of view, it means that these regions are interconnected and interact with each other.

When the MCO was implemented, movement between districts was prohibited, resulting in limited traffic movement. Sellers or businesses could only accept customers from their respective districts. For example, the Langkawi district is a separated island and is famous as one of the international tourism centers. After COVID-19, the level of business in this district slightly increased compared to its pre-pandemic days. This is because, after the MCO, Langkawi became the preferred tourist destination among domestic travellers.

When the movement restrictions were lifted after several months of enforcement, many people returned to their hometowns or went on vacation with family and friends. As proof, one of the small-scale businesses in the Langkawi district mentioned the return of out-of-state customers, hailing from Negeri Sembilan and Selangor, to their shop. Despite that, the number of tourists in Langkawi was still minimal. According to the Chief Executive Officer of the Langkawi Development Authority (LADA), Dr. Hezri Adnan, Langkawi only received 1.5 million tourists for the year 2020, recorded from January to October [22]. Every sector was under pressure, especially tourism. Small-scale businesses were also affected as their businesses depend on the arrival of tourists.

In measuring the level of difficulty of small-scale businesses faced in the COVID-19 environment, it was found that the Kuala Muda district was most affected and failed to recover to levels during its pre-COVID-19. When examined, it was found that this district also relied on the tourism sector. Of the five destinations that received the highest number of tourists in Kedah, three of them are in the Kuala Muda district. In the absence of tourists, small-scale businesses in the district suffered terribly. This vulnerability was exacerbated by poor business operations in which most small-scale businesses were in debt before the pandemic, unlike those in other districts. Daily gross sales profit was mediocre, and these small-scale businesses were under pressure from the rising prices of raw materials.

According to the findings of this study, the Langkawi district is among the few districts where business owners received training on business knowledge before, during and after the MCO. In a pandemic, a lack of business knowledge can lead to poor decision-making and harm business operations. Therefore, it is important to have a comprehensive business strategy that incorporates knowledge of business practices, in addition to continuity strategies that address necessary operational changes [39]. This highlights the importance of having a solid understanding of business practices. Small-scale businesses that lack proper business knowledge, despite using digital mediums such as messages, phone calls and WhatsApp and giving discounts, fail to acquire continuous customers.

According to Giunipero [45] again, small businesses are inevitably faced with risks, but what is more important for survival is that they must constantly monitor the market environment’s risks and take proactive internal actions to manage them properly. As seen in this district, during the MCO, some businesses applied the technique of delivering their products to the homes, but this technique was discontinued after the MCO. From a creativity standpoint, this district lacks innovation and added value to its product or menu. Zhou et al. [28] stressed that in order to increase product innovation and creativity, small-scale businesses should have robust business operations because many problems begin from weak operation tactics.

Technology has played a crucial role in transforming sustainability during the COVID-19 crisis, with many activities shifting toward the use of technology, such as work from home, virtual meetings and conferences, and online shopping. This trend has also extended to businesses such as restaurants, cafeterias and retail enterprises that operate remotely by allowing online ordering, pickup and delivery [46]. As the world of work has adapted and changed, the business and tourism sectors must also follow in their footsteps. Therefore, SMEs must move beyond the informal pattern of activity and adopt systematic strategies to attract the customers by using the social media [47]. These outcomes can be applied in different geographical contexts [48].

The advancement of technologies can be a potent force in the continuity of the tourism sector [49,50] via the implementation of artificial intelligence which is expected to affect the tourism industry and tourist behaviour [51]. Kedah, the destination of tourists from various countries, should adapt Destination Management Organizations (DMOs) to promote the destinations to attract visitors and develop the regional economy in the emergence of crisis [52,53]. The five districts improved their business level standing post-MCO compared to pre-MCO, i.e., Bandar Baharu, Pokok Sena, Kubang Pasu, Sik, and Langkawi, are testimonies to the benefits of technology integration in small-scale businesses. These districts applied an assortment of business knowledge and technologies such as giving discounts, banner advertising and billboards and using communication technologies such as the telephone and Internet. This is aligned with Rashid and Hassan [54], who stated that technology has a significant role and that it is suitable as a catalyst in generating income for small-scale businesses.

Although the COVID-19 environment is viewed as a threat to the financial stability of the country and its people, it is important to note how society is accepting this situation. The survey conducted revealed that small-scale businesses, especially those run by Muslims, still emphasize that the importance of religious worship in their lives. Over 70% of the respondents felt that the pandemic was a form of wisdom for them, despite 54.6% indicating that their businesses were on the verge of collapse due to the pandemic. The majority of these businesses faced pressure from the rising prices of raw materials or supply prices of products, yet they choose not to raise their selling prices. Instead, they opt to offer discounts, give free products if food sales do not run out before closing time and even offer free products to customers who appear to be in need.

When asked what they would do if they were down to their last RM 5 and faced with a person in need, 99% of small-scale businesses surveyed said they would help. Among these traders, 68% said they would give between RM 2.50 to RM 5.00 to the person, with half of that group choosing to give the entire amount. Some mentioned that they believed Allah SWT would repay them later if they gave the full RM 5.

This is also the concept of ikhtiar (endeavour) and reward expressed by Sloane (1999) who stated in Yusuf’s [55] study, which found that Malay entrepreneurs and small-scale businesses in Pendang, Kedah, believe that if they make an effort, they will succeed in their business and get rewards from God. Sloane’s study agreed with the concept held by this Malay small-scale businesses that ‘Allah’ (God) does not like poverty, as this signifies laziness, passivity and irresponsibility that allows time to commit sins; therefore, Muslims must work hard to obtain grace and grace from God. This concept is also supported by Hamid’s [56] study, which found that the majority of small-scale businesses or entrepreneurs in Kedah choose religious motives as their reason for engaging in business.

5. Theoretical Contributions

The findings of this study specifically contribute to the future development of the organizational theory of resilience. According to Carlson et al. [57], resilience is ‘the ability of a community to anticipate, resist, absorb, respond to, adapt to, and recover from a disruption’. The majority of small-scale business owners, according to the findings, exhibit high levels of resilience, which is believed to be derived from their spirituality. In Islam, it is believed that every action will be counted, even if one has good intentions in their heart, and so they continue to do good. Even if one does not receive a reward in this world, they will definitely receive a reward in the hereafter. This concept reflects trust and total reliance on Allah (God), giving them the confidence to wake up peacefully and find a way out. They believe that Allah will help them, and they continue to seek out methods to better themselves because they believe that Allah will always assist them in overcoming their doubts. Some of them, based on the interview findings, even view the pandemic as a hidden blessing, allowing them to adjust, adapt and recover in an effective way due to their optimism. In conclusion, the resilience observed in this study is derived from a strong faith in religion.

6. Conclusions

This study concludes that the level of difficulty small-scale businesses faced in the COVID-19 environment resulted in financial stress and stress on their business. However, they choose to persevere by leveraging technology and adapting their business strategies to survive. Some have even changed their business type to seek new opportunities.

The study disproves Hypothesis 1 that all business owners in all districts were affected during the MCO period, as some were pandemic-proof due to their ability to seize opportunities and their business strategies. Hypothesis 2 was also disproved, as some business owners were able to recover more quickly by organizing their businesses and adopting new technologies despite the highly detrimental influence of the MCO. Although their businesses only operate at small scales, they laboriously ensure their survival as it is their main source of income.

From the research findings, there are three main implications. First, not all small-scale businesses have the ambition to act or change. Additionally, most of them operate on a small scale to support their daily needs rather than with the intention of growing their businesses. The second implication is that they are unprepared to handle crises such as this outbreak. As a result, people were unsure of how to handle this circumstance. This became clear when the MCO was imposed, and their sources of income deteriorated due to the pandemic. The third implication is that most of them are positive and calm. In contrast to trials conducted elsewhere, where many people were forced to shut down their businesses, the small-scale businesses here were stronger and remained operational. Their reliance on religion is reflective of this characteristic that motivates people to be optimistic and calm.

A recommendation to the main stakeholders who manage the small-scale business sector, such as SMEs Corporation Malaysia and NCER, is to concentrate on developing states in the northern part of Peninsular Malaysia due to their resilience in the face of adversity as evidenced in this study and many others.