- The coronavirus pandemic has forced industries to rethink how they do business, resulting in a "new normal" that's here to stay, according to two start-up founders.
- As physical stores closed, many retailers moved online, said Ning Wang, co-founder and chief business officer of PingPong Payments, an e-commerce payments processing firm.
- While the travel industry is predicted to take several years to recover, PKFare's Jason Song, founder and president, said the process of digitization for the travel industry will be sped up.
The coronavirus pandemic has forced industries to rethink how they do business, resulting in a "new normal" that's here to stay, according to two start-up founders.
Many small retailers were forced to shift to e-commerce platforms in an attempt to survive the pandemic's disruption to everyday life.
"From our side, what we saw, of course, very first impact was (the) acceleration of retailing going from offline to online," said Ning Wang, co-founder and chief business officer of PingPong Payments — a crossborder e-commerce payments processing company. He was speaking at a panel discussion during CNBC's annual East Tech West conference, which was held this year remotely and on the ground in the Nansha district of Guangzhou, China.
Wang explained that there has also been a category shift in the kind of things that are now being sold online.
"Some of the categories – leisure-related, of course, declined. But there are for example, in the U.S., a lot of home goods stores, mostly sold offline. They closed the stores, so everything is moving online," he said. "I think we are still seeing overall trend of digitization, e-commerce taking over offline, but accelerated in a somehow chaotic way."
As the pandemic spread around the world since January, countries enforced strict lockdown measures and movement restrictions that saw many stores temporarily shut while large swathes of office workers were made to work from home. The travel and tourism industries were hammered in the process as people postponed both business and leisure travel, leaving many airlines struggling to stay afloat.
While the travel industry is predicted to take several years to recover, the process of digitization for the travel industry will be sped up, said Jason Song, founder and president of PKFare, who was part of the panel. PKFare is a travel trade marketplace for air tickets and other hospitality services.
Decline in business travel
Experts have said that even when the pandemic is finally under control and the travel industry begins its recovery process, business travel will take longer to recover compared to leisure travel as corporations have now shifted to virtual modes of meeting.
Business travel plays a critical role in the travel and hospitality industry, with business-travel spending exceeding $1.4 trillion in 2018, according to a report from McKinsey & Company in August. Corporate travel is significant for airlines and hotels "not only in traffic but in profitability," the report said.
Both Wang and Song said they do not foresee business travel returning to pre-pandemic levels anytime soon.
While face-to-face meetings with clients are irreplaceable, Wang said online communications have leveled the playing field for larger firms with higher travel and entertainment budgets and start-ups.
"Everybody" is getting on Zoom, he said, referring to the online video conferencing service that soared in popularity because meetings had to be conducted virtually during the pandemic.
Looking ahead, Wang said he expects e-commerce penetration in the U.S. and Europe to catch up to similar levels seen in China today, leaving smaller companies with "an unprecedented opportunity" to do business.
PKFare's Song said he expects global travel in five years to become much more personalized in terms of the deals and offers travelers receive.