Daphni

Tomorrow never dies!

Tomorrow never dies!

Tomorrow never dies!

To be frank and 100% transparent, we spent a lot of time thinking about what we should share in such a unique period? A picture to illustrate the fact that we are all safe with our families and are back to work in home-office, a reminder of the importance of the barrier gestures, that you don’t need to rush to the supermarket, to call everyone to be responsible and stay home, all the respect we have for the medical staff currently saving life regardless the risks… For sure these are all crucial pieces of information, but for us, one word truly matters in this uncertain and difficult time: SOLIDARITY

While the media continuously reminds us that the noodle and toilet paper run-rates are becoming one of peoples’ main concerns in China, Italy, Spain, France, and now in parts of the United States, we also see hundreds of amazing initiatives popping up all around the world. While we are not naive about the consequences, the violence and the potential durability of the current events, we also see in this hectic period an accelerator for many very interesting trends and the opportunity to raise awareness on some key societal challenges. Here are a few examples of our discoveries and key learnings:

The way we heal people

Let’s start with the obvious, the healthcare system. It is currently under high tension in France as well as all other places suffering massively from the Covid 19 pandemic with healthcare staff demonstrating heroic conduct. The current pandemic is a tremendous growth driver for telehealth and teleconsultation that had an adoption far behind expectations while they are necessary. Telemedicine companies in the US are struggling to meet demand while in France, Doctolib announced an 18x on telemedicine demands and 17x more doctors using it on the platform. The French government has also fueled this growth by offering more flexibility on telemedicine rules illustrating the years we are gaining in terms of regulation. More generally, in an industry where sales cycles often reach a couple of years, many companies are currently signing in a week. We can’t ignore the great outcomes it could provide in the long term in an industry that really could benefit from digitization!

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The way we work

Actually it could even have consequences on the housing market with people discovering that they like living remotely or city inhabitants that they actually prefer living in the countryside. It would reduce the over urbanization and the over-concentration of economic activities around big cities. There would be multiple positive impacts on the economy, housing, social sustainability, positive environmental effect, ….

As of March 16, 2020 ZOOM Cloud Meetings ranks #1 for overall iPhone app downloads (across all games and apps) in 35 markets according to AppAnnie

The way we do shopping

The e-commerce industry is elevated as an alternative for the closure of all stores as shown by the Amazon example with the hiring of 100 000 people to tackle the demand. If the industry performs in general, China showed us that all different e-commerce models didn’t behave the same in such a period. While Pinduoduo and Alibaba were highly impacted by the crisis reviewing their forecast more conservatively, JD.com forecasted a 10% growth of its revenue in Q1. The main difference between these models is the efficiency and automation of the supply chain. When the former are marketplaces relating to fragmented suppliers, the latter has its own warehouse and stocks with a high level of automation. The crisis is definitely giving an edge to automation and flexibility in the supply chain.

The way we treat the gig economy

The current crisis also calls the treatment of the gig economy in our society into question. Many gig workers are especially at risk during this period since most of them meet a lot of people while at the same time they do not benefit from the same social protection. In the coming cost-cutting times, freelancers could also become the first variable of adjustment. At the same time, the growth of the gig economy has raised many questions that have never been seriously tackled by politicians yet. In France, the recent decision by the “Cour de cassation” to consider Uber drivers as employees is a good example of the lack of proactivity in the area. However, without questioning the nature of the model, the recent measures of confinement will force us to make some decisions. In France both platforms (Uber, Deliveroo, …) and the government announced indemnities for the couriers infected or suspected to be infected. Let’s take advantage of this situation to open a real debate on the future of the gig economy.

This chart illustrates the respective resistance to the crisis of the different verticals

The way we eat

Traditionally, the food industry is one of the most resilient industries to the crisis as it’s part of the most basic human needs. The tension caused by COVID19 is one step higher with some scenes of panics in the supermarkets. The food delivery industry was already growing at a very fast pace (12% CAGR) before the recent events, but as it happened in China, the demand for food delivery companies should surge in the short term, accelerating, even more, the long term adoption.

https://skift.com/2018/09/14/10-years-later-how-the-travel-industry-came-back-from-the-financial-crisis/

The way we travel

For sure, all industries related to tourism and personal transportation are highly cyclical and traditionally especially impacted by the financial crisis. The combination of such a crisis with a pandemic situation could be even worse. Very few people are probably planning their next vacation at the moment. However, as illustrated by the chart above, the sector also usually recovers faster than the global economy. This is also an innovation accelerator. 2008 indirectly boosted convenient online solutions by causing a decline in the number of travel agents. Will we find a new trend accelerated this time? Maybe one in link with climate change and sustainability?

Confinement, day one

The way we learn or spend our time

With kids confined at home, online gaming and entertainment are taking a growing place. In China, while the time spent on mobile increased by 30%, the downloads of gaming apps increased by 35% in comparison with 2019. E-sport’s popularity is skyrocketing while streaming platforms are thriving. Online fitness coaches are also experimenting with growing demand. On their side, social networks still have to solve their fake news issue with rumors which had a terrible impact on confinement measures. However, the crisis could also accelerate the change in more traditional areas. French President Macron declared that this period was the opportunity to rediscover the simple pleasure of reading. E-books and audiobooks that don’t require any delay or move should also have an accelerated adoption.

The way we consume

More generally, the crisis is reminding us that frugality is good from a personal perspective as well as a professional perspective. This is an opportunity to question our consumption habits. The crisis in China constraints many companies to temporarily relocate part of their production more locally. This is also practical experimentation of the concept of negative growth. For sure we don’t want to live like that, but an unlikely beneficiary of coronavirus is actually the planet. If the actual benefit is still hard to measure at this point (From Feb. 3 to March 1, CO2 emissions were down by at least 25% in China because of the measures to contain the coronavirus), satellite images released by NASA and the European Space Agency show a dramatic reduction in nitrogen dioxide emissions in China and in Italy. This drop in emission is to balance with the drop in the oil price (not only caused by a drop in demand but also by growth in production) and the potential bounce-back effect of the industry post-crisis.

The way we see our future

Meanwhile, stay safe at home!

 

A great thanks to the whole daphni team for their contribution with a special thought for Aurélie van PeteghemCecilia Lundborg and Pierre-Eric Leibovici!

 

http://bit.ly/daphni-newsletter

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