The coronavirus outbreak, which originated in China, has infected tens of thousands of people globally. With over 153,648 confirmed cases across 146 countries, the World Health Organization (WHO) has officially declared it a pandemic. (Source)
Since there is no vaccine to prevent the spread of coronavirus disease 2019 (COVID-19) to date, the only prevention that people have is to avoid being exposed to the virus. This is tried to be achieved through social distancing, personal hygiene measures, and avoiding contact with the infected person.
To mitigate the risks involved with contagiousness of the disease, several countries and their cities are put into lockdown, placing quarantine measures on the entire population. This has confined citizens to their homes unless they have to buy food, medicine, or seek any medical treatment. European countries- France, Spain, Netherlands, Denmark, the Republic of Ireland are some of the infected.
Along with this, global companies like Google, Microsoft, Apple, Salesforce, Twitter, etc. have rolled out mandatory work-from-home policies amid the spread of COVID-19. People are advised to avoid social gatherings and traveling to different countries/cities to avoid further spread of the disease.
These limitations are leading to business slowdown, everywhere. Finance, entertainment, healthcare, travel, retail, hospitality are some of the industries that are highly impacted by the COVID-2019 outbreak. Here is a discussion on, how?
The rise of coronavirus cases may end up with the demand for certain insurance types. As the COVID-19 virus continues to dominate the headlines, there is a hike in demand and awareness about insurance plans for health and life coverage.
Apart from this, insurance companies are receiving fewer claim requests than usual. For example, travel insurers can benefit from people traveling less to different cities and countries. Due to the COVID-19 outbreak, there are canceled events and conferences, which again restricts the business reps to travel less. This, as a consequence, leads to fewer cases of insurance claims for treatment in foreign countries. In fact, most travel insurers do not even give coverage for a pandemic, epidemic, or infectious disease.
Similarly, travel insurers will have fewer cases for flight cancellation & delay reimbursements, loss of possessions, accidents, etc., which is an advantage. However, at the same time, fewer travelers means less new insurance cases. So we can say that the insurance industry is not adversely affected by the COVID-19 outbreak.
- Disney and Universal Studios have planned to shut down several theme parks as large gatherings may trigger the spread of coronavirus.
- The NBA has suspended its season after a player was tested positive for COVID-19. Also, Arsenal place players in self-isolation and postpone the Manchester City game due to coronavirus.
- Movie theatres are temporarily locked down in parts of India, amidst the COVID-19 spread.
The entertainment industry is adversely affected by the coronavirus outbreak. However, as more people stay at home, in self-isolation, and take quarantine measures, there is increased use of alternate entertainment services such as games, video-on-demand, etc. According to the Financial Times, the number of app downloads surged in China after the nationwide isolation measures were taken. Video streaming companies such as Netflix, Amazon, Disney+ are expected to have a rise in the number of subscribers in the impact of COVID-19.
3. Hyperlocal Marketplaces
While there is a business slowdown and people are under isolation to mitigate the impact of COVID-19, hyperlocal delivery services are making the most of it. Doorstep delivery services for food, medicine, grocery, packages, etc. are gaining ground. To make it safer for the recipients and riders safe, food delivery companies such as Deliveroo, Postmates, Instacart, Zomato gave options to choose contact-less delivery, wherein the rider drops-off the package outside the doorstep.
This year, 10 major tech conferences including Google I/O, Mobile World Congress, Facebook F8, SXSW, Electronic Entertainment Expo (E3), etc. have been canceled due to the coronavirus outbreak.
Coronavirus has a mixed impact on tech companies. With work-in-isolation policy being a mandate for employees, there are companies that make the most of it in terms of profit. For example:
- Slack Technologies Inc. confirms that due to the global fallout from COVID-19, there is a surge of interest in workplace-collaboration software.
- Zoom, an enterprise video communication solution is one of the most downloaded business apps in the US on Apple Store in the 2nd week of March 2020 (according to App Annie).
Since technology companies have closed their offices and stores, restricting their executives to travel to the affected areas, which also has an effect on supply chains. For example, manufacturers in China are the key suppliers to technology companies across the globe. Manufacturers who have been impacted by the coronavirus are failing to make on-time delivery, thereby impacting various tech businesses.
On the other side, IT firms are realizing the benefits of outsourcing, more than ever. Remote working has been given preference amid the COVID-19 and thus functions such as software development & maintenance are least affected by the coronavirus.
5. Travel & Tourism
The travel & tourism industry is severely affected by the coronavirus outbreak. With COVID-19 being a pandemic, people are avoiding travel to different countries and cities, which has negatively impacted the travel business and has affected the tourism benefits of the affected countries.
Airlines are drastically cutting flights and flight rates as more people have decided not to fly during the outbreak. According to the International Air Transport Association (IATA), global airlines may lose $113 billion in sales if the coronavirus continues to spread at this pace.
- The U.S. airlines asked for over $50 billion in federal assistance due to the dramatic decrease in passenger traffic.
- At the end of the year, airlines can have 11-19% loss in global passenger revenues, according to IATA.
6. Retail & eCommerce
Malls, shopping centers are temporarily shut down in effect to COVID-19. Also, since people distance themselves from social gatherings and crowded spaces, they prefer ordering their favorites or necessities online. Similar is the case with the retail business.
On the contrary, digital commerce businesses are trying to make the most of this situation. Nevertheless, thriving in such an outbreak is still a challenging job for eCommerce businesses.
The COVID-19 spread is proven to be the biggest threat to the global economy and financial markets. If we look at the short term impact, we could see people making safer investments in the market. This means there are fewer investments in the stock market, a negative impact on VC funding of existing and new fintech firms.
The Fintech sector have experienced a drop in transactions at all levels. Since people have self-isolated to protect themselves against the COVID-19 spread, they are spending less than usual, leading to a low transaction rate. In fact, cryptocurrencies such as Bitcoin, Ethereum have experienced a major dip amid the coronavirus effect.
However, in the end, policies, health and our very survival are within our control. Scenarios and anticipation of work can be powerful tools to imagine a possible future. We must make a policy that prevents and, where needed, prepares for those futures we do not want. Well, we all will prepare for the worst and hope for a new dawn without the nemesis of COVID-19.