Impact of the Pneumonia Epidemic on the Internet Industry

During this period, due to the impact of the epidemic, all industries have been affected to varying degrees. So what impact does it have on the internet industry?

1.Growth in the internet user population

This timethe epidemic has madeseveral billionpeople around the world stay at home, with three generations under one roof. In such a family atmosphere, young people's behavior and entertainment methods can easily influence children and the elderly, especially regarding the use of smartphones:

many elderly people have gradually learned to operateappand more smartphone functions: they start reading and earning money on Qutoutiao to get perks, buy groceries on Tmall, scroll through Douyinapp(and even shoot their own original content), read online novels, and even buy medical insurance for themselves;

many children will also learn towatch short videos,playmobile games, attendonline classes；

(The chart shows that in recent years, the growth of China's mobile internet users has been weak, and the net increase ratio has continued to decline.)

AndChina's internet user penetration rate is only70%around, and there is still some room for growth.

This epidemic will undoubtedly further promotemiddle-aged and elderly consumersandthe activity of users in lower-tier markets on the internetdegreeThe consumer age range will be further extended. For online consumption, there will be a greater shift from previous understanding and awareness to learning, trying, hands-on experience, and even forming habits. Users in the middle-aged and elderly age group will see a small wave of growth. Internet products targeting middle-aged and elderly peopleandlower-tier marketsthat seize this opportunity will see considerable business growth.

Other internet platforms will likewise benefit from the expansion of the internet user group. Growth departments, especially growth product managers, should spend more effort on product strategies targeting this group of users.

2. Consumer psychology, consumer confidence

The epidemic has caused a short-term downturn in the overall economy, with many businesses closing down or even going bankrupt.

Inevitably, a large number of corporate employees will also become unemployed, consumers' expected income will decline, and overall consumer confidence will fall (it should be noted that in the short term, retaliatory consumption in some consumption scenarios is far from representing the overall social consumption trend, so do not let one leaf blind you to the forest).

However, this situation will not last too long. Based on historical experience, it is expected that within one quarter after the epidemic ends, it can recover to the previous level.

(As shown in the figure, after SARS, total retail sales of consumer goods recovered to the previous level around8month)

The lipstick effect in the consumer market will become more evident, and people will be more willing to use lower-cost inputs to gain greater benefits and satisfaction. Online consumption forms will have a more profound impact on consumers across society. It can be clearly expected that consumption scenarios will become more diversified (the customer base for live-stream shopping will further expand, short-video selling will flourish, and various mini-program e-commerce platforms will bloom everywhere, which will further squeeze the mall space of offline physical businesses); consumers' advance consumption will decrease, and they will live more within their means; credit consumption will also decrease accordingly, because low income expectations lead to insufficient repayment capacity;

3. Lifestyle

The public will pay more attention to health, and demand for gyms and fitness equipment will increase to some extent; the health industry and wellness-related business formats will also see some optimistic growth; health insurance, medical insurance, and accident insurance and other insurance types will see long-term demand growth; health and wellness tourism will also further develop and promote the tourism business format; internet medical platforms will see optimistic business growth; people will be more willing to try cooking at home, and products such as Xiachufang, Douguo Meishi, and fresh food delivery will become more favored;

4. Entertainment methods

Online entertainment methods will cover more scenarios and customer groups:

Online entertainment forms will become more diverse: Online cloud clubbing, short videos, livestreaming, online movie streaming, online Werewolf,VRand various other forms of gaming;

The customer base for online entertainment products isfurther increasing its penetration in lower-tier markets and among older age groups, and the entertainment methods of middle-aged and elderly people are also shifting more from offline square dancing, Dou Dizhu, and watching TV to online Douyin, livestreaming, and online film and television (the trend was already there; the pandemic acted as a catalyst);

6. Education and work methods

The pandemic forcibly changed the work and study methods of white-collar office workers and student groups:

Continuous learning:

Office workers had been bombarded with knowledge anxiety for years, and during the entire period of free time during the pandemic, many knowledge-paid platforms also fully seized the opportunity to release various open classes and online course resources to attract users. The number of course learners also saw a relatively high increase compared with the past. In addition to white-collar workers, it also helped people of more age groups use fragmented time for learning and cultivate the habit of continuous learning;

Online education:

Students were likewise isolated at home, and their learning methods shifted from classrooms to livestreamed classes, online courses, and other online methods. At the same time, this forced the development of informatization in the education industry, and the onlineization of educational resources helped to a certain extent to realize the flow of high-quality educational resources and maximize benefits;

Employment methods:

This nationwide home isolation was, to some extent, also like a social experiment. We can verify the efficiency and existing obstacles of free working from home, and it will likewise trigger the development of a batch of freelance professions, providing more flexible choices for future workplace employment methods.

Online office work:

During the month and a half of home isolation, everyone could only start working through online methods. Hundreds of millions of Chinese employees began online office work. Downloads of office software such as WeCom, DingTalk, and Feishu grew rapidly,Zoom, and the number of users of multi-person online video communication tools such as Tencent Meeting also grew rapidly. This is undoubtedly a huge benefit for software providers supporting online collaborative office work, and the impact will continue to have an effect, and will certainly change the office methods of Chinese enterprises more profoundly and extensively.

7. Other aspects

This pandemic also reflects many points worth thinking about and analyzing: for example, the application of high-tech and big data in epidemic prevention and control,5G、AIartificial intelligence for epidemic analysis and diagnosis, internet products for epidemic information release and guidance, and problems existing in the government's administrative response mechanism;

Rapid development of community e-commerce:

During the pandemic, it coincided with the Spring Festival holiday for couriers, plus the continuation of the pandemic, so logistics and delivery human resources were extremely scarce,e-commerce platformsand orders placed were also difficult to deliver to homes.

Instead, community e-commerce grew against the trend. In various communities, owner groups and community groups were bustling with offline group buying of daily necessities, alcohol and masks, fruit, and other products, and sellers concentrated deliveries to the residential compound through offline channels, after which owners distributed them themselves. To a certain extent, this supplemented the problem of blocked e-commerce logistics links. After the pandemic ends, the community e-commerce group-buying method will still continue to grow and persist;

Evolution of the online media landscape:

During the pandemic, countless media platforms and media organizations released all kinds of information without interruption, with both good and bad mixed together. On information platforms such as Weibo, WeChat, Toutiao, and Tencent News, a group of central media, official media, professional media, and self-media rose and gained public trust, effectively conveying correct public opinion information and delivering high-quality news content, playing a very important role in soothing public emotions, guiding the public to do a good job in epidemic protection, and dispelling rumors.

However, open and transparent internet media platforms also in turn supervise high-quality media platforms to continuously improve the quality of news content: for example, WeChat opened a special entry for the State Council's epidemic inspection, using the power of the people to manage the epidemic; for example, People's Daily, from being the media platform most trusted by everyone, because of3one improper Weibo post, aroused widespread public questioning, and doubts arose about the credibility of People's Daily as an official media outlet.

5GCommercial use needs to accelerate even more:

During the pandemic, scenarios such as ultra-large-scale information flow across the entire network, massive information transmission and interaction, remote video diagnosis, ultra-high-definition medical video, and home online office work and entertainment required larger-capacity and faster channels,5Gand the application scenarios have also become clearer and more implementable;

AIAlgorithms assist healthcare:

Alibaba DAMO Academy assisted the Zhejiang Provincial Center for Disease Control and Prevention in launching an automated whole-genome detection and analysis platform, using theAIalgorithm developed by Alibaba DAMO Academy, which can shorten the gene analysis of suspected cases from the original several hours to half an hour, greatly shortening the time to diagnosis, and can accurately detect virus mutations;

Transparency in government affairs management:

The openness and transparency of online public opinion can be said to have forced governments at all levels in China to achieve the best level in history in policy formulation, implementation, supervision, and improvement. Through methods such as public opinion supervision, the public exposed illegal facts, offered suggestions, and supervised policy implementation, creating a good scene of interaction between officials and the people;

Big data builds smart cities:

Everyone should have some impression of online products during the pandemic for checking whether they were on the same flight, train, or bus as a confirmed case. At least they should also be familiar with health codes. These small internet tools seem simple, but behind them is a large amount of algorithms+and big data that make them possible.

For example, with health codes, the system can combine each person's real-name use of transportation, mobile device location movement, and contact with confirmed cases/Real-time calculation of large amounts of data such as possible contact with suspected cases is used to provide feedback in the form of green codes, yellow codes, and red codes, assisting urban communities in epidemic management and guiding the resumption of work and production;

Internet products take on an important role in social management:

During the epidemic, a great many internet products actively opened special epidemic sections, providing real-time aggregated data displays during the epidemic; opened online diagnosis and treatment entry points to guide people to seek medical advice at home, avoiding cross-infection caused by gathering in hospitals; collected various false rumors online for centralized refutation; promoted home delivery services to meet people's basic living needs.

Only on the premise of multi-dimensional services based on internet platform products could home quarantine for a billion people be achieved, which also shows that internet platforms can likewise play an important role in social management;