The novel coronavirus rampaging across the world’s second-largest economy, forcing cities to be cordoned off and companies to shut down, has disrupted global businesses and rattled financial markets.
A wide range of industries, ranging from leisure to retail, are teetering on the brink of a dramatic shake-up in a life-and-death struggle while, for others, the crisis spells potentially huge opportunities to blaze a new trail.
“In the Chinese language, the word ‘crisis’ has a dual meaning. It breeds danger and also brings opportunities,” said Chen Hongmin, a professor at the Antai College of Economics and Management at Shanghai Jiaotong University.
The novel coronavirus is an unexpected, game-changing event for the video conference industry
He Jun, chief executive of Cisco Webex Meetings
In 2003, when the SARS epidemic struck, emptying the streets and confining hundreds of millions of employees on the Chinese mainland to their homes, its then nascent e-commerce sector got an unexpected boost from the killer virus. Alibaba and JD, then in their infancy, struck the right chord and went on to become internet behemoths as many Chinese, unwilling to go out for anything but the essentials, developed their online shopping habit.
As Duncan Clark said in his new book on Alibaba, “The (SARS) outbreak had a curiously beneficial impact on the Chinese internet sector, including Alibaba. SARS validated digital mobile telephony and the internet, and came to represent the turning point when the internet emerged as a truly mass medium in China.”
“Such a game-changing hit sounds like an inspirational tale for companies making good efforts to ride out the storm at the moment,” said Chen.
After nearly two decades, the number of internet users in China stands at 900 million — up from 60 million when SARS struck. As the novel coronavirus triggered lockdowns and isolated millions of people, the transition to living and working online has fueled a boom in the mainland’s burgeoning remote-work software industry, its burgeoning online education sector and the world’s largest mobile gaming market, he pointed out.
Even before the virus emerged, the remote-work software business in China has been on a tear, with the collective market size surging to a whopping US$3.9 billion last year from US$2.8 billion in 2017, according to Shenzhen-based Forward Business and Intelligence.
The explosive demand for virtual office tools lately has turned Alibaba’s DingTalk into the most downloaded free app in the country’s iOS app store, followed by Tencent Conference. Huawei’s remote-work platform Welink was reported to have brought in 50 percent more new accounts a day.
Online education platforms are also benefiting from the momentum with a nationwide shift to digital classes. Following the postponement of school semesters, more than 80 educational companies have offered free online courses to students in China, which has nearly 280 million students ranging from kindergartens to universities.
Consultancy firm iResearch projected last year the online education business, then accounting for just below 10 percent of the total market share of the country’s education industry, would hit US$62 billion, with nearly 300 million paying users by 2020.
The epidemic seems to have exacerbated the trend.
Zhang Lijun, an education veteran and partner of Sinovation Ventures — a venture capital firm founded by prominent investor Kai-fu Lee — said it would be easier for online education firms to acquire users at comparatively lower costs than before, and the penetration rate of online education will grow by around 10 percent.
“The novel coronavirus is an unexpected, game-changing event for the video conference industry, which has been long underrated in China in the past 20 years. Its development has been accelerated by five years, with the country’s thriving online education and online healthcare scenes leading the pack,” said He Jun, chief executive of Cisco Webex Meetings.
As the coronavirus outbreak put health authorities on high alert around the world, IT-powered online healthcare platforms in China have a bigger role to play in combating the epidemic, offering services such as online consultation, online diagnosis and psychological assistance in a smarter way.
Online consultation marks the very first step in digital health, said Li Dewen, deputy director of the information center of the Ministry of Industry and Information Technology.
It’s the online diagnosis service that holds the key to achieving the informatization of the medical system and digital health in China, he stressed.
Work and study are definitely not the whole story. “Online gaming will likely be the biggest beneficiary of the coronavirus-triggered disruption,” Nomura analyst Shi Jialong wrote in a recent report.
Tencent’s King of Glory cemented its role as the impeccable cash cow for the gaming giant, with daily active users surpassing 100 million over the Spring Festival holiday, compared with the usual level of around 60 million to 70 million, according to Nomura.
King of Glory and Tencent’s another blockbuster title, Game for Peace, ranked as the top paid mobile games in China during the holiday season, data from QuestMobile show.
Short video and live-streaming apps Kuaishou and Douyin also saw their number of daily active users skyrocket by more than 400 million on average, according to QuestMobile.
“The coronavirus outbreak has lifted the awareness and market prospects of many online-related businesses, which have gone on a hiring binge and created hundreds of new jobs at a time when the economy is in the doldrums,” noted Charles Ma, a Hong Kong-based consultant at one of the “Big Four” accounting firms.
“However, with a flood of money pouring in, an industrywide shake-up that will essentially reshape the competition landscape and redefine the development trajectory is on the horizon. The fortunes are not for everyone. In the end, only those leading the pack, as well as promising market players, will be relishing their glory.”
