Insights On The Pandemic’s Traumatic Effects And Opportunities

As we move into 2021, it has already been a whole year since the word “coronavirus” first appeared in our lives. Many industries have undergone tremendous changes due to the pandemic in the past year — Some industries have been hurt hard by the epidemic all around the world; Meanwhile, there are some emerging industries as well. Today, we will take a look at both the trauma and opportunities that COVID-19 has brought to various industries.

1. Online Education

Due to the worldwide spread of the pandemic, many countries have moved classes online. In addition to the transformation in full-time educational institutions, many educational platforms have also launched online courses during the epidemic, allowing learning at home to become the norm. According to the data released by iResearch on the “2020Q1&2020Q2e China Online Education Market Data Release Report”, the market size of China’s online education in 2020 was about 400.38 billion RMB with an annual increase of 24.1%. To be more specific, the market size of the past Q1 quarter is 68 billion RMB, and the portion of K12 education has increased to 31.4%. Moreover, the total number of monthly independent devices for online education APP has reached 430 million units in March 2020, and the average daily effective use time increased by 69.9% during the same period. According to Tianyancha, as of June 2020, there are more than 250,000 companies engaged in online education-related businesses, with an average of 140 new ones added every day. Such explosive growth was inconceivable before the epidemic.

Yuanfudao and Zuoyebang and the two most well-known players in the market. Founded in 2012, Yuanfudao started its business with a question bank of the Civil Service Exam. It has experienced three transformations of target users from adult to K12, from a work problem database to an online education platform, then from a platform to a self-operated business. Later, it has focused its business on online classes. The AI interactive product “Zebra AI Class”, which was incubated at the end of 2017, has become one of the two core businesses of Yuanfudao. Zuoyebang was founded in 2015 and is currently the largest K12 online education platform in China. With the mission of “making quality education within reach”, it uses technology to solve the difficulties encountered in education. It covers multiple areas, including education in different subjects, liberal education, informatization of education, family education, etc. Zuoyebang has independent R&D for many learning products such as the Zuoyebang app, live class app, and oral arithmetic app. In 2020, Yuanfudao has raised funds four times, with total financing of 3.5 billion dollars, and has become the most profitable startup company of the year. Zuoyebang also received two rounds of financing totaling 2.35 billion dollars.

In conclusion, the epidemic has brought new opportunities to the online education industry and opened up many opportunities for innovation and entrepreneurship. At the same time, some offline education institutions are forced to undergo a transformation or open online branches, resulting in more competition in this industry. Business owners in the industry have to think about the way to stand out from the competition by utilizing the characteristics of the social background. Another challenge for them would come after the pandemic when online courses may be no longer needed. It is important to maintain user stickiness in the online education field and to closely integrate with offline education in the future.

2. Online working

The outbreak of the epidemic is a challenge for the traditional workplace. Many online working platforms have spotted the business needs brought by the epidemic and provided companies with technical support for working remotely. According to the data provided by QuestMobile, the total usage time of office efficiency products has increased by 20 times in March 2020, with its absolute increase in the third rank, just below short videos and instant messaging. While working from home, related online tools become necessities.

According to Jiedian Finance, Tencent Enterprise WeChat temporarily opened support for 100 people to participate in the meeting at the same time in order to facilitate medical personnel to hold group meetings and help employees work online. In addition, the number of one-time emergency notifications was increased to 1,000. Moreover, important epidemic information and work schedules can be viewed via phone reminders to provide technical support for the medical team.

On January 29 when the pandemic just began, Ali Dingding provided the system for working from home to 10 million companies for free in order to support the basic operations of the society. The main functions include video conferences, the group live broadcast for educational institutions, the DING function to ensure the efficient access of notifications for enterprise, schedule sharing, task collaboration, online document collaboration, and remote clock-in functions for ensuring efficiency during the pandemic.

ByteDance’s Feishu also provided users with free remote office and video conferencing services from January 28 to May 1, 2020, including a commercial version of the complete office suite, unlimited audio and video conferences, remote clock-in and approval management, unlimited online document and form creation, and 100GB/user cloud storage space. At the same time, Feishu also provided three years of free use of the commercial version to all hospitals, schools, and non-profit organizations in Hubei province that applied within the time frame.

The current most well-known video conferencing software worldwide is Zoom. In addition to being used for remote work, it has also become a platform for online teaching in many schools. Zoom was founded in 2011 and went public in April 2019. With the increasingly severe epidemic, many companies have switched to working remotely. The average daily user of Zoom has increased from 10 million in December 2019 to 300 million in April 2020. This value has grown by an astonishing 30 times in the duration of five months. In September of 2020, Zoom’s market value has reached 129 billion US dollars, and its CEO Yuan Zheng has also been named in the top 100 Forbes Global Rich List.

Most of the collaborative office software mentioned above is backed by major Internet companies, but in the past, collaborative tools were only popular among large enterprises in first-tier cities and Internet companies with relatively avant-garde office methods. Now they are gaining more recognition in second-and third-tier cities that have more traditional workstyles. The influx of new users means that there are new demands to be met, and the currently standardized solutions on the market cannot cover the segmented needs of all walks of life. For the entire industry, although the current development of collaborative office products is in full swing, there is still a lot of room for improvement in its penetration rate. Similar to the field of online education, how companies can grasp the market after the epidemic will be a big test for collaborative office products.

3. COVID-19 Vaccine

Although the situation of the COVID-19 epidemic within China has become more optimistic compared with the initial outbreak, the global situation is still severe. It now appears that the COVID-19 vaccine seems to be the most thorough solution to this epidemic. Global medical competition for the vaccine kicked off in January last year. According to incomplete statistics, 15 vaccine companies have received financing this year, attracting nearly 50 investment institutions and funds including Hillhouse Capital. Some companies have successively completed multiple rounds of financing in the primary market. In addition, three successive IPOs, namely CanSino Biologics, Shenzhou Cell, and Kanghua Bio, have completed equity transfers and a billion-level fixed increase.

Byntec was one of the first companies to announce the launch of the COVID-19 vaccine program. When the founder Ugur Sahin launched the vaccine program, he named the project “Lightspeed Project”. At that time, the major pharmaceutical companies that accounted for 90% of the global vaccine market, including Pfizer, Johnson & Johnson, Merck, GlaxoSmithKline, and Sanofi, were still inactive due to the cost-effectiveness of vaccine research and development. Analysts predict that after the successful launch of the COVID-19 vaccine, it is expected to bring 3 billion US dollars (about 19.3 billion yuan) in revenue in 2021. This may not be worth mentioning for Pfizer, which has an annual revenue of 51.8 billion U.S. dollars, but it is a watershed for profitability for Byentec, which is currently unprofitable. Therefore, Bytech and Modena, two “small companies” that have never had a product on the market, placed a bet on new technology routes, and accomplished huge successes in R&D efforts.

However, in the industry insiders’ perspectives, startups have missed the best time if they want to gain a lead through vaccine production. Due to the particularity of vaccine products, the production process and quality control system are the core competitiveness of vaccine companies. With the increasingly strict quality control of the vaccine industry, the survival of small and medium-sized enterprises will be relatively difficult, and there is no technological advantage. Kai Liu of Biotrack Capital believes that startup companies should avoid competing with leading companies on traditional technology platforms, and a better way is to use new technology platforms or to develop more difficult vaccines or new vaccine varieties.

4. Retail

In order to reduce the further spread of the epidemic caused by the movement of people, many cities and communities imposed restrictions on the scope of residents’ daily activities and the frequency of going out at the beginning of last year. People began to choose to use online shopping to obtain daily food materials to meet the most basic food and clothing needs. The Chinese New Year’s period was originally the off-season for retail, fresh food e-commerce, and the food delivery industry. Such new demand has undoubtedly created new challenges and opportunities for the fresh food e-commerce and food delivery industry.

According to MISS FRESH data, from New Year’s Eve to the fourth day of the new year, the actual transaction volume of the platform increased by 321% compared with the same period last year. The total sales volume in the seven days of the Chinese New Year exceeded 40 million. Among them, the demands for fresh vegetables, fresh meat, fresh fruits, aquatic products, and protective masks were the greatest. The delivery platform Ele.me became the main errand-runner for purchases during the Chinese New Year. In Beijing, 200,000 mask deliveries were sold in a week, a 50-fold increase from the previous month; more than 10,000 bottles of disinfectant deliveries, a 7.3-fold increase from the previous month; 9,600 thermometer deliveries, an increase of 1.74 times. From New Year’s Eve to the ninth day of the Lunar New Year, the turnover of all platforms on JDtoHome increased by about 374% compared to last year. Among them, the growth of grain, oil, and non-staple food and meat products was more than 700%, snack food increased by 527%, and vegetables and fruits increased by 400%.

Such an astonishing demand puts a lot of pressure on the supply chain and distribution services. In order to ensure a sufficient supply of fresh food, Dingdong Mai Cai ensured that 400 tons of vegetables are on the shelves every day during the Chinese New Year. Compared with the supply chain, Dingdong Shopping has relied on the coordination of the government to coordinate Shanghai’s largest comprehensive agricultural and sideline product wholesale market to deploy a lot of fresh pork and vegetables offline. In order to alleviate the problem of manpower shortage, Alibaba’s local life service company recently officially launched the “Blue Ocean” employment sharing platform. Through this platform, catering merchants across the country can register for their employees and choose to become Hummingbird Blue Riders or convenience stores in nearby supermarket employees.

Now that the epidemic is gradually easing, can the fresh food retail industry maintain the hype during the epidemic? Some believe that the surge in business of platforms such as Hema Fresh and MISS FRESH is not only a short-term benefit but is also expected to cultivate new ways for Chinese people to buy food. Before the epidemic, people were accustomed to ordering food on their mobile phones on take-out platforms. Although there are platforms such as Hema, MISS FRESH, and Meituan Grocery, traditional vegetable markets have always been a way for people to obtain fresh food due to long-standing habits. However, after the developing habit in the epidemic, the Chinese people now pay more attention to personal and family health and hygiene, thus, we can expect that fresh and fresh retail will usher in a new development in China.

After the full return of work and production in China, the retail industry in the post-epidemic era has achieved significant growth. In the 12th Double Eleven Shopping Festival (November 1–11) in 2020, postal and express companies across the country handled a total of 3.965 billion express mails, of which 675 million were generated on November 11, setting another record high of a year-on-year increase of 26.16 %. The transaction amount of major platforms also hit a new high during Double Eleven. Tmall’s real-time transaction volume reached 498.2 billion yuan, and the peak order volume reached 583,000 transactions per second, which was 1,457 times that of the first Tmall Double Eleven in 2009; JD.com’s cumulative order amount exceeded 271.5 billion yuan. JD Logistics has also scaled up again to improve transportation efficiency, achieving 93% of self-operated orders within 24 hours, 92% of districts and counties, and 83% of township orders within 24 hours. It is worth noting that the online shopping influencer live streaming, which is still a novelty in 2019, has become a buying channel that consumers are accustomed to during Double Eleven in 2020. Obviously, the “buy with the anchor” shopping method has become one of the mainstream of Chinese consumers.

Author: Mandy

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