Coronavirus Impacts the On-Demand Industry: A Detailed Study

Posted by ongraph · April 27, 2020 · 9 Min read

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  1. In the current wake of the coronavirus endemic, how feasible do you think it is to send or receive parcels, order food, shop online, order medicine with a tap, and lots more?

According to a report by Harvard, currently millions of people across the world have been affected by this threatening virus, with no signs of stopping down till there is an antidote in place. First and foremost a human tragedy, the coronavirus outbreak is affecting hundreds of thousands of people. The virus is also having a growing impact on the global economy. Here, we will provide business leaders with a fresh perspective on the evolving situation and implications for their businesses.

As per a survey conducted by Ficci,

The novel Covid-19 outbreak has led more than 50% of Indian companies to witness impact on their operations and around 80% have observed decline in cash flows.

The pandemic has presented major challenges for the country’s economy, resulting in severe troublesome impact on both demand and supply side elements having the potential to derail the growth story.

The country is by this time witnessing a slowdown in growth. In the third quarter of the present fiscal, the economy grew at 4.7%, which is the slowest in 6 year. 

With the major population under lockdown due to the pandemic, there’s an acute requirement for basic services so as to survive on a daily basis and run daily lives comfortably. Let’s take into consideration the on-demand industry. The essential on-demand services across the globe are witnessing a spike in demand. 

As per the Harvard Business Report, about 22.4 million people across the world enjoy the comfort that ‘On-Demand’ companies provide. From food delivery to home care services to mobility services and many more, dedicated on-demand services make the lives of people more convenient and smooth. It connects people who require assistance with day-to-day problems to the ones who are ready to offer instant solutions. 

What is the On-Demand Industry?

The on-demand industry works on consummating the demand of customers by providing immediate access to products and services. Consumers look for speed, convenience, and simplicity. This need is providing power to the rapid expansion of the on-demand industry.

How Does The On-Demand Industry Work?

On-demand industry makes use of technology to connect the consumers with relevant suppliers of goods and services. Consumers in need of a particular service enter their requirements in the relevant app. The technology company then indicates the service provider to fulfill the needs of the consumers. Once the service is completed, the payment is made through the technology company.

There are three components to the on-demand industry – suppliers, technology companies, and consumers. The technology company serves as the intermediary for both consumers and the suppliers. 

How The On-Demand Industry Becomes Important During The Pandemic?

  • Social distancing is causing an increase in the consumer base

The terrorof the pandemic has enforced people to keep away from social gatherings. This has caused an increase in the consumer base for on-demand delivery apps

  • Multiple choices, One stop

Consumers always wish to choose from a variety of available options. A single platform such as an on-demand app which has multiple options for various products and services makes the purchase decision convenient.

  • Quick and convenient shopping

The answer to the question of how long the coronavirus pandemic will last is completely uncertain as of now. This has caused consumers to run to shops and buy stocks in panic. With most of the shops running out of stock or getting shut, consumers are finding it difficult to purchase even their regular supplies. On-demand service ensures the regular flow of goods and services which stops people to do panic buying. It helps the consumers to shop quickly and conveniently from the comfort of their homes.

The Impact Of Coronavirus Pandemic On The On-Demand Industry

The impact of the pandemic is such that every facet of the on-demand industry is affected, whether be taxi, retail, restaurant, e-commerce, pharmacy, parcel apps, etc. The biggest obstacle with an on-demand industry is the fact that people cannot absorb delay in whatever is being ordered and this applies to all types of on-demand services.  

Most on-demand services realize this and suffer the delay on a few occasions only. However, with coronavirus on the rise, it can pose a big threat to all the on-demand services. Though, when it comes to providing essentials during the lockdown, the on-demand industry is leading from the front. 

The effect of the coronavirus pandemic on various businesses differ widely. Most businesses which need direct face-to-face interaction with the customer are undoubtedly losing their grund. However, businesses that can provide their services through contactless interactions and doorstep deliveries are witnessing a surge in demand. 

Let’s have a look at how coronavirus has affected various businesses in the on-demand industry…

Food Delivery

The fact that the coronavirus originated in a wet market in Wuhan city in China is no secret, and thus it is obvious for the food industry to become a target.

People have now stopped ordering food from restaurants and have started to eat vegan food by cooking at their home. This has led to a lasting impact on on-demand food delivery services. Furthermore, it has also affected the industry in terms of logistics, wherein delivery agents are now scared to deliver food to crowded places or unhygienic places, causing order cancellation due to staff unavailability.

However, technology played a crucial role in making the zero-contact deliveries a success. Route planning can also help in eliminating the risk of virus spread and enhance the efficiency of deliveries. 

Travel and Transportation

The coronavirus scare has negatively affected local, regional, and global transportation systems. The global airlines, local bus systems, and national railways are witnessing a sharp decline in customers. Majority of countries that are hugely affected by the coronavirus have restricted travel and completely shut down their public transportation systems.

On-demand travel firms such as Airbnb have cancelled trips and also refunded the travelers. Outbound travel bookings have also declined after the outbreak of the coronavirus. 

The air travel industry has been experiencing a global business crisis due to the pandemic. The airline companies which are connected with the on-demand industry are taking up necessary measures in order to reduce costs by cutting domestic and international flights.

On-demand travel companies have reduced their variable spending in marketing and advertising. Moreover, they are also laying off their employees massively. 

However, there’s a different story for the ridesharing apps. These are experiencing a small rise as people who use public transport are now turning towards these apps. But the airport travels have reduced drastically. Although there’s an increase in the volume of rides, the consumer spending on ridesharing platforms has decreased.

Ride Booking

Whether it be a bike, auto, or a cab-booking service have been hugely impacted as passengers are scared of riding a taxi with a fear of getting the infection from a driver servicing so many passengers a day.

Drivers, on the other hand, are equally scared of carrying passengers in their taxi, especially when accepting to and from rides at airports, bus stations, and railway stations.

Retail Delivery

With the outbreak of coronavirus, there has been a sudden hike in on-demand grocery deliveries. People are preferring to purchase groceries using zero-contact deliveries so as to avoid getting exposed to the infection. 

Panic buying has increased consumer spending up to 87.4% year over year, leading to grocery stores showing the highest revenues. 

In several countries, officials have ordered grocery shops to shut their operations completely so as to mitigate the spread of COVID-19. The temporary closure has led some of the grocery shops to provide consumers with delivery options. These delivery options compensate for the losses in brick-and-mortar sales.

The increase in the number of consumers have also resulted in a new trend in retail shopping, BOPIS (Buy Online Pickup at Store). It meets the needs of consumers in times of social distancing. 

BOPIS combines the offline and online shopping experience by letting consumers order goods and get them delivered to nearby retail stores.

A number of logistics and e-commerce businesses are also adding time slots so as to accommodate the increasing demand. However, a lesser number of delivery trucks is causing unavailability of delivery slots. By utilizing a real-time tracking as well as ride allocation solution can eliminate the difficulty in scheduling on-demand deliveries. 

Courier Parcel Delivery

On-demand courier and parcel services is another industry that has witnessed a major impact of coronavirus. Here people are not ready to accept parcels out of fear, unless and until it is very important. Moreover, the senders themselves are avoiding to send parcels as they might not be accepted by the receivers and the delivery staff is also refraining to deliver parcels to suspected places.

Healthcare Service

The outbreak of COVID-19 has spurged the adoption of on-demand healthcare service apps. Big hospitals across various countries have expanded the usage of telemedicine and on-demand doctor apps to screen and treat patients safely for coronavirus.

Telemedicine facilitates healthcare services via audio or video calls. The on-demand healthcare apps will also play a vital role in eliminating the spread of coronavirus. Such apps provide in-house visitations via video channels and identify whether a patient is at a low or high risk of the virus. 

  1. Companies providing telemedicine applications have started to update their services. However, the challenges in adoption, varied physician licensing laws, and lack of reimbursement are preventing the usage of telemedicine apps across the rural areas.

In a Nutshell,

Fighting a pandemic such as COVID-19 is not a task of a single day. To get out of an epidemic like this might take months or even years. It is all about the teamwork and the patience that would really help on-demand services to get their businesses going smoothly in a crisis. 

Hope this reading gives enough insight into the situations of various businesses and the possible solutions to cope with it. If you wish to have a more detailed understanding of the same, then connect with us via email. We assure you that our team will get back to your query very shortly. Till then, stay safe and stay connected!

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