Profit, People & Pandemic
An article by Fariz H. Putra, M.B.A.
Lecturer of Entrepreneurship
i3L Business School Jakarta
It is safe to assume that masks, disinfectants and hand sanitizers are the golden commodities during this unfortunate pandemic. It is still fresh in our memory that during the first days of working and studying from home, the prices of these previously-neglected-turned-scarce items skyrocketed and quickly sold out in major supermarkets and drugstores across the country. This kind of human behavior, quite frankly, was very predictable as our citizens did not know of what the future held; they panicked and ended up clearing up the shelves to stock up for staple foods and other essentials, causing scarcity everywhere.
While this practice of panic-buying was somewhat plausible, some “entrepreneurs” out there are taking this opportunity to hoard masks and hand sanitizers and sell them later at unbelievably high prices. Sensi-brand masks, for instance, would normally have retailed at around Rp 50,000/box, but they could instead sell for more than Rp 300,000/box these days. This condition called for an ethical dilemma for entrepreneurs – do I want the profit, or do I want to save people?
While some entrepreneurs are stuck with moral and ethical questions whether or not to sell masks at a profit, some global and local companies are taking a heroic step further to provide a clever solution – again, entrepreneurs are problem solvers in the first place. Take Batik Keris – a Surakarta-based batik and garment powerhouse, and Ralph Lauren – a New York-based global fashion retailer and manufacturer for example. These two companies are very fortunate to have enough labor and manufacturing capacities to produce reusable masks and medical gowns. Ralph Lauren especially dedicates one of its many production lines to produce 250,000 masks and 25,000 medical gowns for donations, not to mention the 10 million USD that Ralph Lauren donated to fight COVID-19.
Unlike Ralph Lauren who donated 100% of their masks and medical gowns to fight the pandemic in the United States, Batik Keris is keeping their masks for commercial purposes. Despite the fact that Batik Keris is not donating their masks, they keep their prices as low as possible, ranging from Rp 5,000 to Rp 10,000 per unit – a very affordable price point for many of us. These reusable and washable masks are an inexpensive and more sustainable alternative to surgical-grade masks, which are sold at higher prices and have shorter useful life (i.e., disposable). This initiative to mass produce reusable masks is Batik Keris’s answer to providing affordable and accessible protection for our citizens to protect themselves during this outbreak.
Other companies in other industries are also switching gears to utilize their production capacity to fight the coronavirus. LVMH, the parent organization of Christian Dior Cosmetics and Givenchy, dedicates its cosmetics and fragrances factory, located just outside Orleans, to manufacture hand sanitizers in order to answer the need for these waterless disinfectant within the first 72 hours after the French government issued a call for the industry to help fill the gaps of key medical supplies as the spread of the virus accelerated. Just like their American counterparts, the hand sanitizers are donated and distributed to hospitals and medical facilities in France.
All in all, not all companies and entrepreneurs out there are maximizing their profit during this unfortunate time. Some of them are taking philanthropic actions while some others are becoming more of a socio-preneur whose focuses are on the citizen’s well-being and health. Many companies out there are fortunate enough to have production and financial capabilities to manufacture and donate their outputs. Some others help fight this pandemic by providing approachable and affordable solutions, thus helping people while still making a tiny bit of profit.