The Catastrophic Effects of COVID-19 on the Economy: Is There Any Hope?

The World Health Organisation (WHO) declared COVID-19 a pandemic, throwing a spanner in the works of the global economy. The health of the public has been greatly affected, with thousands of new cases and deaths making the outlook even bleaker. It is emerging as an unprecedented black swan event that has sent socio-economic shockwaves into even the most isolated pockets of the world.

Naturally, businesses of all sizes have suffered losses like never before. Marketers have found their campaigns grinding to a halt; those who tried to capitalise on the Novel Coronavirus and consequent fear have been shut down by popular marketing platforms such as YouTube and Facebook. 

To summarize, here’s what the coming fiscal year will look like for marketers and businesses:

Coronavirus Effects #1: Struggles for Lost Profits

Even as the impact of Coronavirus slows down in certain countries, businesses will struggle to make up for losses caused during the slump. This trend will affect nearly all industries– the global economy will be set back by a whopping $2.7 trillion USD [1]. 

Coronavirus Effects #2: Drop in Organic Traffic

Most industries experienced a plunge in search engine rankings and organic traffic, not least because consumers’ focus has turned to the virus itself. Since the first week of February, the number of searches for COVID-19-related content has risen by an exponential +260% [2]. It’s worth noting that organic traffic towards news platforms have skyrocketed, as have financial businesses. Naturally, this adversely affects conversion, which then hits revenues and racks up losses. 

Coronavirus Effects #3: Looming Global Recession

From the very beginning, it was clear that the COVID-19 pandemic would affect both supply and demand, the former by shutting down production lines and the latter by consumers preventing non-essential purchases. The United Nations has warned that the global economy could shrink by 1%– an about-turn from the previous 2.5% growth forecast [3]. This spells trouble for the service sector; contingency measures will come into force over the next few weeks to reduce liabilities as much as possible over the year.

Is There a Silver Lining?

In the face of such a catastrophic global circumstance, it’s difficult to see beyond the troughs in profits and revenues. However, studies have shown that a few industries are less likely to be impacted and more likely to bounce back compared to others. Furthermore, history is witness to several opportunities stemming from crisis, already signs are visible that certain industries have found niche business opportunities amidst the chaos [4].

Coronavirus Effects #4: E-commerce Might Pick Up the Pace

Despite an initial slowdown thanks to shut production lines and warehouses, the e-commerce industry might well pick up the pace in the coming fiscal year, especially when countries emerge out of lockdowns. The logic is simple– consumers will continue to make purchases and, while that is currently restricted to essentials, it is only a matter of time before non-essentials also come back stronger. In fact, in China alone, 50% of customers say they’re now purchasing online what they used to buy in-store. It’s a similar story in India, where 55% of consumers have taken to ordering from online portals [5]. 

Coronavirus Effects #5: Omnichannel Experiences Will Grow

The Indian retail industry has been severely affected by the coronavirus effects; however, experts suggest that it might even encourage them to focus more on omnichannel experiences. Many economic survivors of the pandemic-induced retail crash have floated only because they managed to shift offline inventories online and divert traffic to websites and apps. This is where marketers will need to step in– to ensure the increase of O2O (Online to Offline) strategies and cover all consumer-brand touchpoints.

The Final Word

At the outset, it can’t be said that the economy will spur back into action immediately after the Coronavirus threatsubsides. However, certain industries are expected to bounce back harder than others, and e-commerce seems to be at the top of the list. 

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