Impact of COVID-19 Outbreak On New Economy Sectors - An Investment Research Perspective

Source:iResearchMarch 25,20203:12 PM Overview

The outbreak of COVID-19 is causing temporary shock to economy as whole. Industries closely related with offline activities are more vulnerable and market consolidation is expected to speed up, while industries featuring digitalization are more resilient and even see some upside, which all lead to potential investment opportunities.


Online education, SaaS-based enterprise collaboration, fresh food eCommerce and online healthcare sectors share similar characteristics in that they are all at early stage with large potential of market penetration. The epidemic facilitates user acquisition and may lead to systematic user penetration improvement for these industries thanks to user education. Online education is to benefit the most.


Travel, tourism and hospitality industry is hit hard, and we expect business travel to recover at a faster pace than long-distance leisure travel, indicating investors can watch out for business travel-oriented platforms/operators. Catering and other offline formats such as department stores also face big challenges, but food delivery and livestreaming bring relief to some extent. Investors can pay closer attention to eCommerce livestreaming since we expect the segment to achieve big breakthrough this year.


Most to-B logistics sub-sectors experienced severe business interruption due to capacity shortage and weak demand, and accelerated market consolidation is expected. Express service is subject to less negative impact and self-operating players are gaining market share & brand recognition. On-demand delivery benefits from user demand surge but investability is limited since the market is quite concentrated.

Contents

The outbreak of COVID-19 is causing temporary shock to economy as whole. Industries closely related
with offline activities are more vulnerable and market consolidation is expected to speed up, while
industries featuring digitalization are more resilient and even see some upside, which all lead to potential
investment opportunities.
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