When COVID-19 hit the markets, it took everyone a while to understand what the new reality would be like. Stock markets plummeted, investments were pulled, unemployment rose, and forecasts became pessimistic. Then, the digital economy started to adapt, as it is its very nature. Business models changed, digital approaches proved to be more robust than anticipated, and technological solutions were used to overcome COVID-19 challenges in almost all industries.
In under three months, a local infection became a pandemic affecting 210 countries and territories. The share prices plummeted in Q1 ’20 but started a quick recovery, improving overall by Sep ‘20. In general, start-ups in digital markets performed better than those in traditional industries.
Layoffs took place globally, with Colombia, Spain, Canada, and the U.S. hit hardest. Labor force unemployment rates and changes in selected OECD countries:
Global institutions expect a recession in 2020 that is more severe than the financial crisis of 2009
Key players in digital markets prospered during the crisis and demonstrated a positive share performance. Stock performance of leading global digital companies during COVID-19 as compared to December 31, 2019
Restaurants as transformers turned to online food delivery to compensate for COVID-19 restrictions. Online food delivery experienced a gold rush, driving food delivery app downloads up by as much as +88%. Health & fitness apps have become increasingly popular and offer a wide range of application areas. Online learning landscape also professionalized into segments with key players establishing themselves.
Led by video streaming and gaming, in-home media consumption changed. 70% of consumers increased their time using a smartphone during COVID-19.
Consumer online interests shifted during COVID-19 and pushed web traffic to supermarkets and media. Content consumption moved towards news, streaming, TV, messaging, and social media. Video streaming spiked as soon as COVID-19 hit, with the most growth seen in Austria, Spain, and Germany. Number of subscriptions for key video streaming providers increased by 28% in 2020
Working from home became the new normal with 27% of workers shifting to 5+ days per week at home. Google search interest in remote working keywords rose significantly during COVID-19. Corporate remote working policies have changed with a majority allowing a full or hybrid remote model. Information/TMT1 industry went almost entirely into
remote working; other industries had lower shares
Economic impact of remote working could result in annual savings of over US$700bn in the U.S. alone. COVID-19 is expected to push spending for trend technologies including cybersecurity and cloud on top. Cybersecurity market expected to grow to nearly US$250bn in 2023 with a 10% CAGR from 2017-2023. The cloud market is expected to grow to US$364bn in 2022 with a CAGR of nearly 15% in 2019-2022.
Prior to the pandemic, a paradigm shift towards digitization and servitization of the economy was already underway. Current events have accelerated the paradigm, as evidenced by the marked shift in spending towards digital businesses. The coronavirus is permanently reshaping the way we live and work. Some of the behaviors developed in crisis—including wide-scale digital adoption—will outlast the pandemic, well after restrictions on activity are lifted. To stay competitive, organizations must respond to these behavioral changes and meet emerging customer demands.