4 ways the COVID-19 pandemic has impacted the world of business

The coronavirus pandemic that swept the world by storm would see numbers in the millions by the end of April 2020 (this heatmap was taken in mid-March). Photo by Clay Banks on Unsplash

The COVID-19 pandemic has caused a great stir in the world as we know it.

Commercial activities came to a halt as various countries imposed lockdowns to curb the spread of the virus, forcing many companies to adapt or die.

Even as the situation stabilizes and businesses reopen, the impact caused by the COVID-19 pandemic and the economy’s response has changed the playing field forever.

In the first part of this 2-part series, we cover how the COVID-19 global outbreak has impacted the economy.

Grocery stores such as the one pictured above were emptied as consumers panic-buy in preparation for the lockdown. Photo by John Cameron on Unsplash

1. Rapid digital adoption in various industries

The most significant impact of COVID-19 is the forced digitalization of processes.

Many companies have to adjust their workflow and rely on telecommuting and web-based services to reduce the impact on business operations due to workplace closures.

Widespread school closures have prompted educational facilities to provide online lectures as a means to facilitate home-based learning.

The healthcare industry is also seeing an inclination towards telemedicine as remote clinic consultations can help to reduce transmission risks for both patient-to-doctor and patient-to-patient.

All this has contributed to a rise in the use of cloud-based services for easier off-site collaboration and teleconferencing software. Most notably, Zoom, a video-conferencing software, saw a considerable jump in daily meeting participants from 10 million to over 200 million users in the first quarter of 2020.

Some brick-and-mortar stores that have been identified as providers of non-essential services are required by governing bodies to close. To adapt to this change, affected stores have invested in digital channels to generate more revenue to make up for the lack of walk-in sales.

With a surge in demand for essential goods such as groceries, Amazon reported the highest e-commerce growth in over three years, despite having implemented measures such as waitlists and restrictions to buy time to ramp up their operational capabilities.

Cashless payments (both online or mobile payments) see increased interest as consumers move away from cash to minimize contact with other persons and shared surfaces.

COVID-19 has only sped up the inevitable as we move closer towards a fully-digitized world.

2. Supply chains disrupted as “the world’s factory” stops

With China being the former epicenter of the COVID-19 outbreak, government-imposed factory closures and movement control orders have primarily impacted the supply chains of businesses that relied on the manufacturing giant for products and components.

Even with China on the road to recovery, businesses are shifting their focus to diversifying their supply chain by looking into alternative manufacturing hubs, such as Vietnam and Indonesia.

Streets are empty as lockdown measures due to the COVID-19 global outbreak are imposed to promote social distancing. Photo by Chloe Evans on Unsplash

3. Increased vigilance in global networking events and trade fairs

The majority of networking events and summits have been postponed or canceled entirely, reducing the chance for different company representatives to network and share ideas.

Some event organizers have chosen to hold digital events instead. However, these events will see limited success as e-meeting a potential client or partner cannot be compared to meeting them in person.

Having a lack of in-person interactions with other companies results in a drop in partnerships or sales. There is a lower chance of innovation due to less collaboration across companies.

4. Recession and uncertainty in the market

The downturn caused by the pandemic has resulted in a hiring freeze in most industries. The hiring freeze allows employers to consolidate what resources they have and facilitates any restructuring due to a shift in priorities.

Some smaller companies are unable to stay afloat and are forced to scale down or shut down completely, with unemployment rates in many countries such as the US and India seeing a significant increase.

The poor economic climate has discouraged new businesses from starting in fear of failure. Ventures backing up startups are also forecasted to be on a decline as investors flock to safer investments.

If you plan to reopen your business as per usual in a post-COVID-19 economy without adapting to the changes, you’ll be in for a rude awakening.

In the next article, we share tips on how to adapt your business in a post-COVID-19 world.

Deskera Books is a cloud-based ERP solution designed to help companies run their business efficiently, even during the COVID-19 pandemic. Check it out here.