The novel coronavirus, officially known as COVID-19, has been the ongoing and unexpected opening drama of 2020, wreaking havoc in both public health and economic terms. Worldwide over 3,000 people have died from the virus, including the first two U.S. deaths reported over the weekend. The infection rate is currently at roughly 90,000, in 60 countries.
And counting. In the last 24 hours alone, South Korea has reported 599 new infections, bringing its total above 4,000 cases. Italy leads the European Union with over 1,600 cases, Iran has seen 1,500 cases and 66 deaths while the U.S. has about 90 as of the writing of this story — with the Centers for Disease Control and Prevention (CDC) officially forecasting a sharp uptick as testing becomes more widespread.
And as the virus spreads, fear of it spreads, and not for entirely irrational reasons. Though its mortality rate sounds low at 2 percent, that is in fact 20 times higher than the mortality rate associated with annual seasonal flu. It’s also twice as contagious. That means that while the risk to any individual person is low, as Karen Webster pointed out, the risk to everyone’s network is high.
And as Webster asked, “Who would want to risk being exposed to something that could endanger their family and friends?”
The short answer to that question is no one — which has meant travel plans curtailed, vacations canceled, corporate events sidelined and workers kept home. That has virtually stopped production in China since the New Year, which in turn has slowed global supply chains and left Apple, Google, PayPal, Walmart, Target and a host of other Fortune 500 companies warning that it is not a question of whether COVID-19 will take a bite out of their performance in the first half of the year, but how big that bite will be.
As of last week — which saw the S&P 500 lose over $1 trillion in a day and the stock market across the board suffer its worst week since the dawn of the Great Recession in 2008 — concern is emerging that COVID-19 might just tip off a worldwide recession.
As the stock market opened Monday (March 2) and immediately shot up several hundred points, concerns late last week about the imminent meltdown of the global financial system seemed perhaps a bit overstated. Last week’s fear seems to have given way to this week’s enthusiasm, because as it turns out, one investor’s terrifying week of instability on the markets predicated by uncertainty about public health is another’s “shopping opportunity.”
“This is a bloodbath, but it’s not when you panic,” the president and founder of Blue Line Capital and Blue Line Futures told CNBC’s Trading Nation. “This is when you go shopping.”
And it seems investors aren’t the only ones going shopping in creative and new ways this week — looking for unexpected bargains in new places. Apparently a global disease outbreak and all the unpleasant economic symptoms it brings along in its wake create boom conditions in segments of commerce one might not expect.
Some good and inspiring, some decidedly not so — and others that are quite a bit out of the box, but suddenly surprisingly relevant.
For example …
Wearables’ Winning Use Case
Wearables got off to something of a slow start, but in the last 24 months or so have started to pick up momentum as the technology improved, capabilities have expanded and consumer have shown an increased willingness to at least give wearables a try.
And there is something, it seems, about the rapid spread of an incurable virus that really stimulates consumer interest in their health and their ability to track it in real time. Wearables, and their expanding capabilities to do just that, seems to be drafting off of that sudden uptick in interest.
And, according to new data out from IDC, wearables makers are on pace to ship 30 percent more gadgets this year, mostly driven by the unexpected emergence of COVID-19.
“The SARS outbreak 17 years ago in 2003 was followed by a rapid growth of the laptop market in the third quarter of the same year, with one important underlying factor being that the crisis made more consumers aware of the importance of access to internet information, and of having portal internet-enabled devices. Therefore, in assessing the factors that impact the devices market, it is important for the entire industry to highlight the short-term and long-term positive factors,” noted IDC’s Antonio Wang.
The trend in the market had already been pointing toward additional wearables adoption, particularly among fitness brands. Fitbit, for example, announced last week that it will sell 16 million units in 2019, and saw retail growth of 45 percent in its wearables unit. Moreover, wearables as tools for boosting wellness — particularly by offering real time monitoring — has become an increasingly high-profile arena in recent months. Apple recently announced a heart study in cooperation with Johnson & Johnson, and has reportedly been looking for more healthcare related channels into which Apple Watch can serve a role. Meanwhile Google, which is in the process of trying to acquire Fitbit, announced recently that it will be leveling up revamping its health wearable offerings — which have been reviewed thus far as middling at best.
Experts believe the coronavirus scare will both prompt more purchases of what is already out there in terms of real-time health monitoring and spur demand for innovation of new capabilities in wearable devices. That might mean temperature tracking, disinfectant features or even things as simple as push reminders spurring consumers to wash their hands more often.
Of course, given how may wearables are currently manufactured in China, it seems that even if consumer demand rises, some ancillary solutions will have to be developed to actually get the products into consumers hands.
And speaking of product shortages …
Mask Hoarders and Gougers
In every kind of crisis there are people who rise to the challenge to benefit the greater mass of humanity. The researchers currently leveraging the best scientific minds the world have to offer with advanced artificial intelligence (AI) to put a vaccine on the market in seven months instead of several years from now are a good example of this.
And then there are the jerks. The people who overcharge for ice and bottles of water when the power goes out in a heat wave; the over-zealous preppers who buy out whole shelves of canned goods at the first hint a hurricane might be coming.
Or, as this crisis is producing, the mask hoarders and gougers. Said simply anyone who tries to buy a surgical or other type of face mask at their local pharmacy may find they are sold out. Going online try to make the same purchase on Amazon a consumer will find masks that 12 weeks ago were $10 to $30 a box are now running for $50 to $250. The situation got serious enough that the Surgeon General took to Twitter to firmly ask people to please, please stop hoarding masks.
“Seriously people- STOP BUYING MASKS!” the surgeon general’s account said on Feb. 29. “They are NOT effective in preventing general public from catching #Coronavirus, but if healthcare providers can’t get them to care for sick patients, it puts them and our communities at risk!”
That notice also pointed out that since most people don’t wear the masks properly, not only are they not protecting themselves from disease, they are also actively making its spread more likely.
Officials in South Korea, on the other hand, have gotten past the point of firm requests made on Twitter in regards to people hoarding and price gouging on hand sanitizer and face masks. They are now throwing up steep punishments — in the form of incredibly steep fines of a little over $40,000 and up to two years in prison.
“The government will do this to prevent market manipulation, particularly in the face mask market,” South Korean Finance Minister Hong Nam-ki said, according to the Korean Herald.
And extreme stance perhaps, but when one risks paying $250 for a 20-pack of face masks in the U.S., it’s hard not to acknowledge they have a bit of a point.
There are some rather odd commerce use cases emerging in the global spread of the COVID-19 virus — almost none of which could have been imagined a year ago. Our favorite remains the “hazmat suit for the urban commuter” designed by Chinese architect Dayong Sun — which basically allows the average consumer to strap themselves into a personal bubble to go throughout their day in.
This product does not exist past the concept art at this point, but according to reports is finding interest as investors are wondering if there are ways to epidemic-proof the economy.
And, no criticism of the commuter hazmat bubble implied, we’re not sure that is possible — natural events seem to prove with charming regularity that they are quite skilled getting ahead of our ability to predict and plan for them.
But respond to them — that perhaps we are getting better at, as the fast turnaround time on the vaccine and the pop-up in the global wearable market indicate. What’s next remains a lot of unknowns — but the innovations that emerge might offer an interesting picture of the future beyond COVID-19 and its immediate effects.