As countries grapple with the human and economic costs of COVID-19, the pandemic is shifting the global landscape in many ways. It has catalysed new ways of doing things — the way business works, communicates, and markets products — changes that could be here to stay.
For management accountants, it's crucial to know which sectors are struggling and which ones might present new opportunities from the crisis. There are indications that the following categories of businesses are worth observing for trends that could impact business operations and strategy in countries around the world.
1. Remote working tools and software
In the early months of the pandemic's spread, governments' full or partial lockdowns forced businesses to turn to remote working apps and software to maintain adequate levels of productivity. Even as many other tech companies fell in value, Zoom's shares rose as the pandemic spread. Microsoft said its conferencing and collaboration software, Teams, reached 75 million daily users in April, compared with 20 million in November.
In China, Alibaba-owned DingTalk and Tencent's WeChat Work — two of the most widely used workplace collaboration tools — temporarily crashed on the first day Chinese office workers began working from home in February before ramping up to handle demand.
The desire to have more operational flexibility and contingency for disruption will also drive businesses to rely more on cloud and virtual office solutions.
Looking ahead: While many countries have relaxed quarantine measures, this sector could benefit even more in the long run if businesses make the shift to employing a mix of remote and in-office workers. Drivers of adoption include potential cost savings from renting a smaller office and having access to a greater pool of talent not bound by geography.
School and university closures have impacted learners around the globe. Readily available remote-learning technologies meant many programmes could be reformatted for online platforms. Colleges shifted to distance learning, and many teachers tried their hand at Google Classroom or web apps like Seesaw for students as young as kindergarten age. Parents also made their first forays into home-schooling.
Massive open online courses (MOOCs) and webinars are also seeing renewed interest amongst adults and business owners as they seek resources on self-development or personal finance to survive a downturn. Coursera offered support by making its entire course catalogue free for universities worldwide. Bloomberg's philanthropic arm in March launched an online coaching programme with Johns Hopkins University's public health school to provide mayors on the frontlines of the coronavirus crisis with technical advice virtually.
Looking ahead: The pandemic has made online learning a necessity. In the future, learners may use a combination of on-site and off-site learning to meet their needs, and educators that adapt to this changing preference stand to benefit. On-premise educators are evaluating their value drivers and cost structure in light of the potential continuation of virtual or blended classroom and at-home learning.
3. Online entertainment
The online entertainment sector has benefited from travel bans and social-distancing measures. Online streaming came to the rescue as sports venues and movie theatres closed.
In China, average weekly app downloads leapt 40% against 2019's average during the first half of February as the entire country underwent isolation measures, and traditional TV viewership also surged, the World Economic Forum noted. Netflix app downloads have also risen in coronavirus-hit areas.
Social media influencers, immersive games, and dating apps are also gaining new groups of users as people look for more ways to interact with the outside world from home. In the first quarter this year, the video-sharing app TikTok had 315 million new downloads, outperforming WhatsApp, Instagram, and Facebook. It now has more than 2 billion total installs.
Looking ahead: Short-run growth is likely due to the demand surge; the trend already began prior to the pandemic and will continue in the long run. (See "House Music" for a look at disruptions and trends in the concert business.)
4. Virtual reality (VR) and virtual tech
Growth possibilities were already on the horizon for VR, but they could get a boost with so many people looking to improve the quality of their stay-at-home time. Use of VR could also rise from those who offer virtual experiences such as museums, art galleries, and historic sites — the Guggenheim Museum, the Sistine Chapel, and the Great Wall of China have joined those offering virtual experiences. Real estate companies are also expanding virtual tours due to the coronavirus.
Work that currently has to be carried out on-site, such as supervision of construction, mining, and repairing power plants, could also possibly be shifted to virtual, while VR tools like Oculus Quest, PlayStation VR, or HTC Vive, and iQIYI's newly launched Qiyu 2Pro VR gaming console could receive a boost. Industry experts are also touting VR as a solution to some cancelled events.
Looking ahead: The consumer VR hardware and software market could nearly triple over three years, to more than $16 billion by 2022, up from $6.2 billion in 2019, according to a Statista projection.
5. Virtual healthcare
The global outbreak has made every country painfully aware of the limits of its own healthcare system. Potential lies in virtual healthcare services, especially portable, artificial intelligence-reliant medical devices and apps that will make individual healthcare and diagnosis more immediate and accessible to the general public.
There is demand for virtual care providers such as Teladoc Health in the US, or Xuhui Central Hospital in Shanghai, now licensed by the Chinese government as a "cloud hospital". After its January launch, Alibaba reported that its health platform received 3,000 requests per hour, while Tencent's WeDoctor said it had serviced 1.5 million consultations by the end of February.
Also, in the US, VirtualHealth, the provider of software-as-a-service care management platform HELIOS, deployed in March complete end-to-end capabilities for identifying and managing suspected and confirmed cases of COVID-19.
Looking ahead: Long-term growth is possible if governments shift their focus to investing more into preparing for the next pandemic event. There could also be growth in hybrid sectors, such as the global virtual reality healthcare market, which is anticipated to reach $3.44 billion by 2027.
6. Contactless technology
To reduce the probability of spreading the coronavirus, no-contact practices have been championed — and that creates room for innovation and creativity in products that support no-contact.
These could range from automatic sanitisers to voice-activated technologies and a greater proliferation of cashierless supermarkets like Amazon Go. The global voice- and speech-recognition market is expected to top $18.8 billion by 2025. Walmart has already launched voice-activated grocery shopping, which became more relevant during the pandemic.
Robotic medicine is also on the rise, with many hospitals increasing robotic capabilities. At a converted sports centre in Wuhan, China, the city where the virus spread began, the field hospital used robots to deliver all kinds of services, from patient screening and monitoring, to delivering food and medicine. In South Korea, robots were deployed to disinfect Daegu city; Antwork, part of Japanese industrial drone maker group Terra Drone, flew medical samples and quarantine materials to China.
Looking ahead: Short-term demand for readily available products is expected, but it will take some time for producers to develop new technologies and products. Xenex, a California-based company that makes full-spectrum UV germicidal robots, expects its disinfecting robots to be in great demand.
7. Electronic transfers
Notes and coins carry germs, and this crisis has made people more aware that hard cash can be a vehicle for pathogens. The pandemic has led some countries to take measures to protect people from physical exposure to cash, even quarantining money. At the peak of its outbreak, China isolated, disinfected, and burned bank notes from infected provinces. The South Korea central bank superheated banknotes to get rid of the coronavirus, while Thai banks also temporarily suspended foreign money exchange booths nationwide due to COVID-19 fears.
Now fintech solutions to avoid the use of notes and coins altogether are seeing more use. The pandemic could be a catalyst to move populations closer to a cashless society. New technologies could also reduce the cost of handling money for banks.
Looking ahead: Short-run demand growth is expected to accelerate the transition from paper to paperless in the long run; once people get used to paperless, it will be hard to go back.
From novel to mainstream
In every crisis there will be unexpected beneficiaries and companies rushing in to seize what they perceive as new opportunities. The longer organisations and end consumers operate and live differently, the more likely these changes will become mainstream.
Anne Somanas is a freelance journalist based in Thailand. To comment on this article or to suggest an idea for another article, contact Alexis See Tho, an FM magazine associate editor, at Alexis.SeeTho@aicpa-cima.com.