How the Coronavirus Pandemic is Affecting the Business World
By: Antonia Ava Posted on Mon, 06-04-2020
What can be worse than a pandemic affecting business and consumer behavior? Do you recall the time when Spanish influenza had taken over the majority of all Europe? Things were pretty devastating back then. Even in 1929, the crash of the US Stock Market stunted many countries affecting their economies on a massive scale.
At the end of 2019, the coronavirus begins in China and now had spread in more than a hundred countries, which almost had economies shut down (if not entirely), whereas drastic measures are being taken till to date to contain the deadly outbreak.
With its effect on not only human lives but global businesses, in the foreseeable future, it is expected to impact the telecoms and technology digital media, payments and eCommerce, banking and healthcare with the worst offense.
World transformation at hands of COVID-19
World business analysts and experts are considering new ways of blocking the impending doom of the business sector. Although the talks about coronavirus being reversible stir the air, in the meanwhile world country's leaders, are planning for another huge impact on the local and global businesses. Telecom is drastically taking over everything as social distancing is keeping everyone apart.
Telecom and Technology
“Remote work is not a medium of sanity left…things are not the same as they were in December (2019)” says Janine Pelosi, Zoom’s chief marketing officer.
Key disruption of supply chain
As a large number of people came in contact with the disease in China, the region had to see a dramatic effect in just a short time. Everything fully or partially closed down; leaving people with a question mark will they go to work tomorrow or not?
Plants and factories shutting down created panic for the employees and employers alike. Especially it's a prime concern for technology companies as the manufacturing of goods and products is on hold resulting in low supply in the market. For instance, when Foxconn, a manufacturer of Apple in China, shut down it resulted in a short supply of iPhone in the market. For such situations, companies have a contingency plan.
Things may have been sound a while in America, but now as China is coming out of impending lockdown, most businesses around the world are closing. If one thinks they can replicate Chinese swiftness in manufacturing goods, then they are sadly mistaken. “Made in China” for telecommunication equipment and semiconductors (semi-raw materials) comes with billions of heavy investments (paid in advance). The real question is: Can businesses afford the loss to occur in billions?
Dangling partnership opportunities
One meeting, if missed, can cause millions to sink, how things will catch up now that tech conferences are postponed or at worse canceled because of the outbreak?
Mobile World Congress, a keystone event is a navigator; bring companies closer, sharing innovations and tech discoveries along forging impressive business partnerships. Taking the drastic events into account in Spain, even this conference binding tech businesses together got postponed which was due to take place from 24-27 February 2020, Barcelona.
Several of the business conferences rescheduled but the impending dangers of COVID-19 led others to cancel the conferences entirely.
Online alternatives are proving helpful to restrict the fallout of canceled conferences like;
- Facebook also canceled F8 developer conference and Global Marketing Summit
- Google Cloud Next by Google shifted to the online event only
- Developer's Conference was live-streamed by IBM, covering 30k attendees for the conference.
Despite the temporary solutions, it’s hard to say how effective sharing technology will be over a live stream. Things are complicated as it is, making marketing work harder to quantify the value of these network sessions. How far it will affect the industries is yet to be seen.
Acceleration in need of 5G
Social distancing can be handled well if the internet connection stays strong. It might be the only thing holding everything together at an individual and professional level.
As remote interaction has increased because of coronavirus, the need for a 5G connection strives every hour. The lightning speed, instant communication, and fast connection is a burning candle for the blind in these dark times.
Keeping this factor in mind, telehealth and teleconferencing, two critical enterprise operations has sufficed the need for 5G as compelling. The appeal of internet connection strengthens the technology ruse.
- 5G may just be the way to beat this pandemic, as technical superiority empowers physicians to diagnose patients and be able to treat them promptly. Since the lockdown, 5G-empowered systems became the light of hope for physicians all over the world, and consultation from doctors in West China Hospital was remotely held. Yes, the ability of 5G is stronger than your imagination.
- Likewise, many businesses switched to remote work. Microsoft Teams, Google Handouts, and Zoom now rely on work from home as employee's health is of concern. To make work from home possible and with no interruptions.
Employers now rely on 5G connection to conduct business (as much as possible) due to the teleconferencing value it provides with uninterrupted communication.
Digital media
Like John Hopkins, Medicine said, "Social distancing is the art to deliberately keep people safe and healthy to avoid spreading illness”.
Turtle paced global media
Global media is estimated to reach $691.70 billion, a 7% rise since 2019, due to the pandemic. The impact of coronavirus is worldwide, and since the outbreak, China, the world's 2nd largest ad market, even has taken the hit in the impending crisis.
The worth of China’s total media ads is to reach $113.70 billion in 2020, it’s an estimate, with the total growth on ad spending. The growth rate is recorded with an increase of 10.5% as people are now diverting to the use of social media and other online platforms. A 13% growth rate is recorded until now in China, as digital consumption is trending more than ever.
Companies involved in the supply chain are dependent on China, for now, as deliveries are slow and remotely stopped, markets closed, it is a pending doom to strike. Concerns are shared over China’s ad expenses due to tighter cash flow which could further have consequences on supply chain management.
To accommodate loss in ads, spending is reduced to overcome any misc. the loss that is bound to occur in the field of the supply chain. Pandemic has a more negative impact due to social distancing and isolation measures. Consumers are avoiding public gathering altogether making advertisers rethink their strategies.
Another hit was the event cancellations, which typically otherwise are highly profitable. For instance, the annual March Madness tournament got canceled which could have generated $655.1 million. Another fear for advertisers is the cancellation of the Summer Olympic Games in Tokyo, which will cater reduction in ads worldwide. A revised forecast is suited to the needs of advertisers.
Consumption of social media
From the consumer's side of the story, social media is a haven. Digital media consumption is increasing, people are benefiting from the awareness campaign smartly run by various businesses.
Social media forums are a major beneficiary, connecting people all across the globe and thanks to internet connection still reliable online sales seem to have hung over the situation. Virtual conversations are boosting chat use and despite the crisis, tech companies rely on information and other substance material as a source of information for the public audience as well as for clientele.
Turning lockdown into an advantage, streaming video services are likely to benefit. People are seeking entertainment, news and other informational content which is causing social media users to boost. Netflix, Hulu or even Amazon Prime Videos are surely the 'wanted superman' of the year proving to be a source of home entertainment. With a sizable lift in streaming videos, influencers are retaining more attention than ever.
Use of TikTok, YouTube is favored by young followers and with a community-based living; these platforms are a fast becoming point of interactions from one follower to another.
Time to explore digital alternatives
With the loss of the Mobile World Congress (as mentioned earlier), a drastic change is expected to take place as a solution alternative for digital marketing as well. These trade events are compelling sources to boost online forums for B2B, an effective channel for leads turning into conversions and vice versa.
The lack of personal interactions is highly effective. Meetings, informal gatherings, annual events, etc. all play their role towards greater efficiency, digital marketing cannot replace the social distance as it has a significant impact on work morale, sales rates, and lead generation.
It’s time to become more creative; the marketer is looking for ways to have an impact on the personal client and customer experience while still maintaining the social distance.
Virtual events need to be explored now, a great way of moving forward, it is considered to be profitable in these turn of events. Online trade exhibits over 50k people to engage in digital sales. Adobe, Facebook, Google, and YouTube are incredible virtual hosts and are replacing the need for F2F conferences, so users can accommodate accordingly.
Distribution of event like content by marketers is a sure way to attract consumers towards new products, improvised business strategies and so on. As international events are canceled, to personalize the experience, such ideas are becoming popular to create a potential in the digital market.
Payments
Cross border transactions are likely to stop for now. Such as container freight has been down since the beginning of 2020, which will disrupt the supply chain.
Increase in cashless payments
Coronavirus contaminates an item of usage, any surface; let it be a counter, bag of chips or even your hands. WHO (World Health Organization) highly recommend avoiding any unnecessary physical contact where a person otherwise can be exposed to the virus.
Fear had grown at such a rate, countries like South Korea, decided to quarantine all cash at the central bank, disinfect it and then circulate it. Similarly, China is taking precautions to avoid any further cases. The use of cryptocurrency is nominal in few countries by now. Measure to restrict cash flow is no easy task by any means but with the imperial lockdowns, online transactions are flowing and non-cash payments are increasing by the day.
Payments have a curve effect. It means the more non-cash payments grow, the chances to adapt to these current situations increases. Mostly the heavy non-cash usage is seen among Asian countries like China and South Korea. The audience of these countries has also taken a liking to the probability of cashless payments which altogether is a healthier change for the current economy.
The trend of logistic challenges
With the trend of cashless payments, eCommerce is likely to boost sales but it is creating a logical challenge.
As people are avoiding more and more to go out, they are diverting their attention and time on online shopping. Take the U.S for instance, with three-quarters of the population is supposedly avoiding shopping center, the use of the internet and online retail increases. The traditional sales (with an estimate of 85% of sales) could shift online but it will still imprint the traditional method of marketing and selling.
Plus omnichannel commerce can take place instead. People can buy online, pick up the item from in-store (if customers want to avoid big crowds). This practice is common in Singapore, but at a medium scale.
How to keep a record of which consumer type is more prone to make an online purchase? Older customers with weaker immune systems have a higher probability to get infected. Therefore they will rely on online sales and make online purchases. This group in the past were least likely to shop online but times are changing consumer behavior drastically. QR code scanning is another option to avail and has recently (before the outbreak) been experimenting upon by various food chains also to avoid cash payments.
Whether the shift towards eCommerce is temporary or permanent, for now, the eCommerce industry is rolling with the chips and thanks to an increase in sales; it might save majority businesses from extinguishing.
Who to trust: consumer or delivery service?
Ecommerce may be benefiting from the pandemic but what about the delivery services? Are those still intact?
As long as the consumer is avoiding public places, the use of digital service will increase whether its food or clothing goods or any gear up material. This is good stats for the delivery organization's to impress their consumers and provide a delivery rush within quality time. But still pandemic has affected the delivery services as well.
Many days today businesses are providing or trying to provide the access of delivery services for groceries and such items but when it comes to paying the bills; people are acting weirder than usual. A video went viral when a person is handing over take away coffee. Now the employee is wearing gloves and a mask but before taking the coffee, the driver (customer) uses (which looked like a disinfectant) spray while the worker seemed dumbstruck as what to make of the behavior.
Panic is setting in real quick. Popular delivery service providers like Meituan have recorded an increase in their orders and with the surging demand for online grocery, picking up dry cleaners, etc., it’s an opportunity for such service providers to earn in the declining economy.
To earn the trust of consumers, a contactless delivery option is being provided by the delivery service like Instacart and Postmates, for minimal risk exposure.
Banking
Digital banking
Due to social distancing, numbers of bank visits have dropped perpetually. Customers now prefer to deal with online transactions via online banking. Yet again, digital banking saves the day.
Banks are the backbone of any economy, they can’t all shut down, but banking day-day activities have sure been limited these days. Hong Kong took the initiative to reduce the bank's working hours because customers still need their money and some cash transactions or dealings cannot be avoided.
However, a greater portion of customers is utilizing digital banking services, with various functions. For easy access, banks already provide the facility to download apps and use them with the comfort of staying at home. It is also a testing matter for banking services to be able to handle the strain on digital banking.
Besides online banking, new alternative channels are introduced to add diversification in banking functions.
The more number of banking functions are there, the consumer will have higher chances of trying new options and choosing the one that fits best for him. Even the proportion of consumers who detest the idea of online banking is now persuaded by the fear of coronavirus to utilize digital banking services. What banking sectors can do is provide educational materials with proper guidelines and set of instructions for customers on how they can benefit further from such services in critical times.
Saving accounts are in question
With the onset of coronavirus, its effect can be seen in the banking sector. People entitled to a savings account may have to face some sudden changes in interest rates as banks now are making emergency rate cuts to maintain the flow of the economy.
The threat of coronavirus growing further is oil to fire in increasing rates on saving accounts for major profit margins.
For instance, the digital bank's interest rate for savings accounts in Australian neobank Xinja is trying to keep it steady by 2.25%. But they are suspending any new account opening in the meanwhile it also puts credit activity in question due to the current situations.
Businesses are forced to shut down which leaves employees in the hot zone; whether they will get a paycheck or not. Most businesses have notified their staff for unpaid leaves or some are voluntarily preparing to give half salaries as the future remains uncertain. It brings us back to the point, how a person is supposed to return a loan/credit if he doesn't have a job? The government is taking incentives to help as much as they can thus leading to a spike in credits.
Healthcare
Digital health firms
In the beginning, we discussed how telehealth has a positive impact on such cases. Digital health firms are assisting hospitals, medical experts which is more than helpful in diagnosing the infected from non-infected people.
Under the current circumstances, telemedicine providers are suggesting patients stay at home rather than at hospitals. Proper care and self-isolation are a better way to recover within the detained period. If the conditions worsen, then the hospital is your next best option of course.
Thanks to social media, more information is being passed around various online platforms. Any medical update for inquiry is supported online instead of making a trip to a clinic or hospital. Once the again online platform is proving to be helpfully convenient in lots of ways. Telemedicine providers are keen on keeping the public aware of any change and stats and what set of precautions to use.
An increase in medical supplies comes with updated information on biological data. Granting new AI can lead o an excessive amount of understanding of how remote patient monitoring can be conducted during the social distancing. For instance, Hong Kong has taken a step towards creating speedy connections with quarantine patients with the help of clinical researchers. This will impact and may yet discover a new way to produce or discover treatments for patients and vice versa.
Alert systems are also effective methods for hospitals and doctors can continue to work without leaving their working station. It may help to improve productivity at a greater level. Health-oriented organizations are working towards optimizing the cloud-based systems to ensure clinicians have all the required info they need.
Conclusion
The spread of illness may not be in control by humans, but what we as a society can learn and evolve according to it. Before our government, economies or societies shut down, we have to find proactive ways to combat bio-wars with any virus. Our future may still shine bright; if we can learn from our shortcomings and improvise our work strategy to save millions of lives that otherwise can be lost.
Coronavirus is fatal but treatable, stay home, stay safe and keep yourself updated.
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