The coronavirus (COVID-19) epidemic has redefined our private life, work, travel, consumption— everything you can possibly think of. The lockdown and restrictions imposed by the pandemic have also severely affected the global economy.
We know the next normal, the post-COVID era is going to be different and it will be nothing like the conditions before 2019. However, people and businesses are trying to adapt to these shifts, to shape their futures in a positive manner.
This post traces the rising trends in the COVID era and their impact on the global economy.
The Next Normal: Post-COVID Era
The era has the power to redefine our ways of life and consumption. We are seeing consumers in queues outside stores due to social distancing but the fashions are inside closets. The theatres have gone empty. International tourism has significantly decreased.
In these and many other ways, the consumers have stepped back from spending. Usually, after such a crisis, customer confidence returns. However, this time the services have been hit hard.
The first to experience a bounce-back will be business with a communal element, such as theatres and restaurants. However, the bounce back in China, the first country hit by COVID, might indicate bigger changes.
The country’s two biggest online retailers, Alibaba and JD.com experienced record sales during the Singles Day shopping event. It showed that the consumers have begun to spend largely, much like before the pandemic.
However, the rate of recovery will not necessarily be uniform. For example, the US consumer survey during the pandemic showed that only one-third of consumers had resumed outside activities as compared to 81% of consumers in China.
We also saw a strong impact of COVID on travel and tourist destinations. The power of the impact on different countries was determined by their dependence on tourism, location, and COVID management.
However, following the pattern in China, tourism will restart and get back to normal. But this normal might be different from the pre-crisis times. The news shows a surge in domestic travel, but international travel still hasn’t recovered due to the changes introduced by the pandemic.
The economic constraints have encouraged the use of technology that will leave a long-term change in business structures.
Key Sectors Boosted by COVID-19
The COVID-19 has caused a rapid change throughout every sector, from healthcare to education and agriculture.
While it’s too early to conclude anything, there are hints that these categories of business worldwide will stand to benefit from the pandemic.
Rising Generation of Entrepreneurs
The disruption in previously stable structures has brought about a flood of new business startups in major countries. In the third quarter of 2020, the US received roughly 1.5 million new business applications, nearly 205,000 more than in 2019.
France saw 84,000 new business formations in October, which was 20% more than in October 2019. Similarly, Germany and Japan also experienced an increase in new businesses compared with 2019.
The pandemic has changed our approach towards entrepreneurship as it turns into a potential job choice in the future.
Remote Work Platforms and Software
The serious restricting measures lead to businesses turning towards remote working platforms and softwares. The companies started implementing remote work tools to increase the productivity of the employees.
While many other tech companies experienced a decline, applications like Zoom gained popularity. Microsoft Teams increased from 20 million daily active users to 44 million in just one week of March 2020. In 2020, China’s two most widely used collaboration tools got overburdened and temporarily crashed on the first day of working from home.
This sector is likely to benefit even more in the coming times as businesses prepare for the pandemic waves.
E-Learning
The schools and university closures have changed the means of learning for over 1.5 billion learners across the world. It has increased the demand for remote learning platforms, such as Google Classroom.
There is also an increased interest in the massive open online courses that give affordable remote learning opportunities to students. This demand will persist as the schools are closed and e-learning technologies improve.
Entertainment
The pandemic and self-quarantine that followed also impacted the entertainment sector. We saw a sudden surge in demand for online streaming apps like Netflix in COVID struck areas, including South Korea, Spain, and Italy.
Apart from that, social media influencers and interactive apps also experienced a rise as people looked for ways to interact with the world outside their homes. For example, the video-sharing application TikTok is the most downloaded non-gaming app of the year 2021.
This rising trend in entertainment grew before the pandemic and will only grow more as time passes.
Logistics
Logistics is another sector that has experienced a decline and a sudden boost as online shopping, and food deliveries become important. With the continuing impact of the pandemic, more and more companies are compelled to rethink their supply chains.
As e-commerce continues to grow and social distances become normal, this sector will have to meet the surge in shipping demands. And so, it is likely to benefit from the conditions.
Electronic Transfers
The pandemic forced people to minimize physical contact not only with other people but also with cash. Hence, most businesses have turned towards electronic transfers, such as Apple Pay and PayPal.
Now mobile payment is a growing business that has made money transfers more manageable and free of human contact. This sector is expected to grow in the long run and continue even after the pandemic.
Impact of COVID on Small and Medium Enterprises
Large businesses have managed to survive and come out strong in the crisis. Their size allows them to have cash reserves and adapt to the changing demands.
However, micro, small, and medium enterprises (MSMEs) have been disrupted due to their limited resources and reach. The pandemic has forced many small businesses to close down. While some of them did reopen, most of them were unable to recover from the hard blow.
The COVID-19 crisis has made businesses rethink their strategies and transform for increased productivity. But, the transition hasn’t been a smooth one for many.
How Small and Medium Enterprises Can Survive COVID
Small and medium enterprises (SMEs), being the critical part of any country’s economy, have been badly damaged during the Covid-19 waves. One of the prime examples is India, where Covid waves, in addition to long lockdowns, destroyed many small and medium businesses.
This ultimately pushed millions back into poverty, while the country also experienced a sharp decline in GDP per capita.
It is almost the same, probably with lesser intensity, for other countries that implemented long lockdowns. Even the large businesses had to adapt to the new technologies under such pressure.
However, SMEs can still bounce back and benefit from the pandemic by changing their business strategies. For example, they can turn towards online advertising to bring in online customers.
Looking at the Walmart Grocery App as an example, SMES can consider digitizing their stores and using their physical stores as storage areas. They can also strive to improve the delivery times and make use of contactless payment options.
Another option for these businesses is to use online in-demand streaming apps, like YouTube, to reach a wider audience. Likewise, using social media, including Instagram and Facebook can help small businesses showcase their inventory.
COVID-19 has changed everything around us, and its effects are likely to last. Even though the fight against the pandemic continues, there is hope that the next normal will shape our lives for the better.
