Source: Zachary Franklin on LinkedIn
The "losers" — if we can call them that — of the COVID-19 epidemic in China are easy to spot.
Commercial flights. China’s aviation market, projected to overtake the United States this decade and become the world’s biggest is now ranked 25th globally, behind Portugal. About 1.7 million seats — almost 80 percent of capacity — were dropped from China services from Jan. 20 to Feb. 17 by global carriers, with Chinese airlines cutting 10.4 million seats domestically. Chicago-based United Airlines withdrew its full year 2020 guidance last week, citing uncertainty over the spread of coronavirus.
Shipping. Many ships are stuck in "floating quarantined zones," as countries, including Australia and Singapore, refuse to allow ships that have called at Chinese ports to enter their own ports until the crew has been declared virus-free. About 80 percent of world goods traded by volume are carried by sea, and China is home to seven of the world’s 10 busiest ports. Shipping companies are now trying to reroute freights to not port at China, but the sheer number of goods made in the Middle Kingdom also means products aren’t being sent to other parts of the world.
E-commerce. Transportation has become a choke point across China. Items that have already been produced or have been ordered are unlikely to arrive on time. Chinese e-commerce platforms such as Alibaba and JD.com responded by hiring thousands of temporary workers, as government-imposed travel restrictions increased consumer demand for online grocery delivery services.
But what about its winners?
"E-commerce has a physical component to it, especially with food delivery. You have to physically get food from store to individual, and that’s a problem," says Jimmie Jeremejev, managing director at LehmanBush. "But online services are exploding in usage since the start of coronavirus. Not that China doesn’t already have the largest Internet population. Coronavirus has pushed more to use online platforms and services more frequently, and that shows no signs of abatement."
Online work platforms
Chinese people’s average time spent on the mobile Internet climbed from 6.1 hours a day in January to 6.8 hours a day during Chinese New Year, and then to a daily usage of 7.3 hours post-holiday, as businesses delayed returning to the office or resuming on-premises operation because of COVID-19.
"China has literally changed a major work habit — physically showing up to work — in a matter of weeks," says Bobby Afshar, managing director at LehmanBush. "DingTalk experienced a 1,446 percent year-over-year growth in downloads through last week. ByteDance’s Lark was 6,085 percent. While WeChat Work was 572 percent. Those are major transformations."
The sheer number of people in country now forced to work from home to avoid spreading COVID-19 is in some cases overburdening messaging and video-conferencing tools.
As companies continue to face labor shortages and travel restrictions for employees, online work platforms are the go-to source if businesses want to remain in business, and employees want to keep their paychecks.
Online gaming / streaming companies
While COVID-19 has caused cancellations of e-sports tournaments throughout China, and slowed down manufacturing of video game consoles, home video games are more popular than ever.
Total game downloads on Apple's APP store in China increased 27.5 percent year-over-year, and revenue rose by 12.1 percent.
So many people have had the same idea that servers across China are unable to handle it. Blizzard issued an apology after Chinese gamers trying to play World of Warcraft Classic faced lengthy wait times due to an influx of players.
Tencent's Honor of Kings surpassed 100 million users over the Lunar New Year holiday, up from the usual 60 to 70 million users.
And the country’s second-largest short-video platform Kuaishou — or Kwai — announced 300 million daily active users last week.
Streaming video platforms have also gotten some boost from the amount of film content now available to subscribers.
"You’ve had two films premiere online as opposed to a traditional theatrical exhibition because movie theaters are closed," says Jeremejev. "iQIYI premiered Enter the Fat Dragon, and ByteDance premiered Lost in Russia. This never happens for domestically produced films. Up until coronavirus, it only ever happened with foreign films that could not secure a domestic theatrical release date."
E-learning and online classes
With the opening of schools pushed back and all extracurricular activities suspended, tens of millions of students are now going online to study. China's education providers of online tutoring services are now experiencing a surge in interest from students and parents.
A unit of New York-listed New Oriental Education & Technology Group Inc., Koolearn surged 83 percent this year after the epidemic shut schools and forced the country’s 200 million-plus school students online.
And it isn’t just formal education.
Gym trainers and instructors — even dance teachers — are converting their typical group classes in studios into live-stream endeavors, instructing from home and providing workouts to paying users. Online routines have become popular in recent weeks as fitness centers and studios attempt to hold on to their client base, and teachers continue to make money.
"For the majority of people, they’re simply not going out. The entire daily routine has been upended," says Afshar. "Educators already include these people in group chats and course registration lists on APPs such as WeChat. They’ve taken the next logical step, which is to go full digital."
Simon Says
The technology for remote collaboration has been around for literally decades, but the Coronavirus is making businesses take action. This is good news for Chinese companies that specialise in collaborative platforms (particularly WeChat Work - their comparatively low growth rate actually reflects their strength and widespread adoption in China). However the challenge continues to be, will Chinese platforms be accepted outside China? WeChat's consumer product has had mixed results outside China, despite aggressive marketing efforts early on. However this is an unprecedented time, and there's nothing like a crisis to make people ready for change. One hopes this works both ways, with global collaboration platforms like Microsoft Office365 becoming easier to use in China. For now, the best way to prepare for the future is to learn - and practice - all the best platforms. We can help with that.