The Pandemic Inflation Spike: How Does It Affect Businesses?

The pandemic has everlasting effects on various areas of our daily lives, but one area where the effects will be felt for many years to come is the inflation spike. According to Bloomberg, U.S. inflation hit a 40-year high of 7.9% and this was even before the oil spike.

The COVID-19 pandemic has played a leading role in increased inflation rates in Hong Kong and the rest of the world primarily because of the disruptions in the supply chain which automatically contribute to higher consumer prices. Temporary supply or demand shocks in the oil and gasoline industries also lead to inflation. According to the Census and Statistics Department, HKSAR, Hong Kong’s underlying consumer price inflation was forecasted at 2% for 2022.

Essential goods and services are consumed by consumers daily and they cannot be avoided. Therefore, such businesses that provide essential goods and services are not that much affected by the price hikes. On the other hand, non-essential and luxury products and services may be affected more by inflation.

A few years ago, businesses would deal with inflation by increasing product costs, accepting smaller margins, and reducing production costs by compromising on quality. But as circumstances change in the post pandemic economy, how can businesses stay competitive? One of the top reasons given by exporters to boost competitiveness during a time like this includes diversifying into new overseas markets. You might gain the first-mover advantage if you have a novel product that has not been introduced to your target export destination. By carrying out thorough market research, devising a strategy to adapt a product to the local market and having a proper distribution strategy in place, you can successfully expand into new markets. In this way, you can increase your overall market share. 

How DHL Express Can Help

While it is certainly not easy navigating through an inflation-hit economy, by having the right cross-border trade strategy in place, you can boost your profit margins. DHL Express is your international logistics partner of choice, here to provide you a variety of services which can be customised and bring you cost-savings for your business. With a network of over 320 aircrafts and operating in over 220 territories and countries, we are well-poised to assist in your market expansion goals. Open a business account with DHL Express to access our delivery services and customisable shipping options that can match your costs and expectations.