Almost every element of our day-to-day life has been affected by COVID-19. We are all too familiar with the awkward hesitation of a handshake transformed to an elbow bump, or us grumbling about the humidity brewing inside our face mask under the sweltering summer heat. Disruption abounds pervasively, and the business sector has been no exception.
Whilst many businesses have suffered in this unprecedented time, other companies have found ways to capitalise on their products and attract swathes of consumers.
Six months into this full-blown pandemic, the winners and losers of COVID-19 are clear, accelerating new trends that will dramatically change our working habits and leisure patterns - essentially life as we know it. Let us look at what these changes are, and what this means for the future as the world adjusts to living with the coronavirus.
WINNER: The tech sector
The immediate ‘winner’ of this crisis that springs to mind is undoubtedly the tech sector. While many businesses struggle to survive under the global lockdown, tech has held up far better than the rest of the market.
Virtually overnight, businesses and schools had to move their operations online, ushering in a new era of increased reliance on digital platforms to carry out our daily lives. Society has adjusted to this ‘new norm’ fairly quickly, and now many more people rely on their technology to work, learn, shop, socialise and exercise from home.
In the immediate aftermath, Microsoft reported a surge in usage of its cloud computing service Azure, as millions of people were forced to work from home. Microsoft Teams has also reported over 75 million daily active users by the end of March- up 70% from 44 million on 18 March.
Zoom has overtaken Skype’s two-decade lead and emerged as the industry leader of video conferencing. An April 2020 survey of 1,110 US companies by Creative Strategies showed that 27 per cent of businesses primarily used Zoom for video calls and meetings, compared to 18 per cent that used Teams, and 15 per cent that used Skype.
Education has also changed dramatically, with the distinctive rise of online learning. In April, more than 1.2 billion children in 186 countries were affected by school closures due to the pandemic. BYJU’s, a Bangalore-based educational technology and online tutoring firm founded in 2011 has added over 25 million students on its platform. The level of awareness for a product like this would have been impossible to achieve prior to these times, and therefore the tech business is on a new, grander trajectory that it might have otherwise been.
What can we expect for the future? Well, the work-from-home experiment looks like it’s here to stay, thanks to technology, and Morgan Stanley, JPMorgan, Twitter, Google, Amazon and other big corporations have announced they will continue to let its employees work remotely even as the world begins to emerge from lockdown. This will be music to the ears of many workers who dread the morning commute, as well as the tech companies who get to continue to provide their services to support this trend.
On the education front, whilst the jury is still out on whether online learning is as beneficial as being in a bricks and mortar school, there’s a good chance it is here to stay. “I believe that the integration of information technology in education will be further accelerated and that online education will eventually become an integral component of school education,“ says Wang Tao, Vice President of Tencent Cloud and Vice President of Tencent Education (Tencent is a Chinese multinational technology conglomerate).
With a vaccine still months away, these technologies will continue to play a crucial role in maintaining some semblance of normality – even in a virtual setting.
The travel industry has been decimated by the impact of COVID-19. As nations are still actively battling the deadly virus, this sector is desperately trying to find ways to make money during this time.
On the travel front, lockdowns and a slump in demand amongst travellers mean air travel has almost ground to a halt. In the immediate future, the balance sheets of these companies will make or break their success, with some companies having more cash on hand to better weather a shock like this.
For example, Booking.com could potentially survive three years with no revenue. Airlines have not been lucky. Those who have already been bankrupted by coronavirus include Flybe, German Airways, Air Italy amongst others. Even Virgin Atlantic was in serious trouble until it won court approval for a £1.2billion recapitalisation plan.
The cessation of travel has also affected hotels- even the big chains. The world’s five largest hotel chains (Wyndham Hotels and Resorts, Choice Hotels International, Marriott International, Intercontinental Hotels Group, and Hilton Worldwide Holdings) hit a new low of $79.2bn in market capitalisation in September 2020, down $25.2bn since the beginning of 2020.
What can we expect for the future? In the coming years, airlines will continue to have a tough time, battered by low travel volume and higher environmental regulation. Their revenues will continue to be depressed, , with the International Air Transport Association predicting that passenger numbers will return to pre-pandemic levels only by 2023 in a best case scenario. Airlines might also have to do more to halt climate change to stay afloat and receive government funding. For example, in Europe, governments have imposed environmental reforms among the terms for airline bailouts. In return for €15bn, Air France has committed to halving domestic flight emissions by 2024 and to restricting short-haul flights where trains run instead.
Of course, bear in mind that we are between a Pre-COVID and Post-COVID economy, with a vaccine still far on the horizon. New winners and losers of this pandemic still have time to pop out and surprise us. If you were told a year ago face masks would become as ubiquitous as jeans, an incredulous snicker might have escaped your lips. So whatever future awaits, it will not look like the world we knew in March 2020. Expect the unexpected.