Pandemic spawns new range of innovative services
Jul 30, 2021

Shopping website momo beats rival PChome 13 times over in terms of market value. The third-generation boss of a southern Taiwan restaurant, launched live broadcasts during the pandemic, propping up revenue despite temporary closures. The Hualien Tzu Chi Hospital on Taiwan’s eastern coast is using 5G-technology for virtual consultations. How did they work business miracles in the pandemic?

Amidst this epochal pandemic, companies boom and go bust virtually as fast as the novel coronavirus keeps spreading around the globe.

With no end to the pandemic in sight, governments around the world are flip-flopping on decisions on COVID-19 prevention, economic relief measures and a return to normal life.

What seems to be sure, though, is that many pandemic-related changes in business models and consumer behavior are here to stay.

In March, market research firm McKinsey found in a study of the retail sector in eight countries (Britain, China, France, Germany, India, Japan, Spain and the United States) that the e-commerce share of retail has soared between two to five times.

Faced with changed consumer behavior, companies need to develop new abilities.

New service trend 1: Fresh food e-commerce – Amazon, Momo expand their lead

During the past year, the “unmet demand” that attracted the strongest interest from e-commerce companies around the world was fresh groceries.

Last April, when the pandemic spread across the United States, Amazon launched fresh grocery deliveries. In November, it added contactless deliveries of fresh groceries to its offerings in five major cities. By this April, the new service had already been expanded to 5,000 cities across the United States.

Having correctly gauged the new consumer trend, Amazon has meanwhile emerged as the leading, most popular fresh food online vendor in the United States, according to a consumer survey conducted in the first half of the year.

In Taiwan, leading e-commerce vendor Momo generated monthly revenue worth more than NT$8 billion as the nation saw its strictest COVID-19 restrictions to date in May and June, posting 50 percent growth over the same period last year. In contrast, competitor PChome achieved not even 20 percent annual growth during these two months.

Momo learned the secret to success from Amazon, which had adopted a hybrid logistics model pairing main warehouses with smaller satellite warehouses already in 2017. For Momo, this hub-and-spoke distribution infrastructure was crucial to launching fresh and frozen food deliveries late last year.

On working days, Momo and PChome have the ability to deliver island-wide within 24 hours. PChome runs seven large warehouses in the Taoyuan area and ships all orders from there.

Momo, however, relies on big data analysis to predict what consumers are most likely to order. These items are shipped to satellite warehouses located closest to the customer, and immediately shipped when orders are received. Only items that the computer missed in its analysis need to be stocked up from the main warehouse. Thanks to this system, delivery times could be shortened considerably.

Moreover, transport between the main warehouses and their satellites or between satellite warehouses and delivery locations is outsourced to third-party delivery services such as Pelican. But Momo also founded its own logistics fleet last year to disperse tasks.

At the beginning of the year, Momo launched fresh grocery deliveries that reach the customer within five hours. Momo President Jeff Ku says that groceries can meanwhile be delivered to the doorstep within two to three hours. By year-end, they want to include frozen foods, dairy products, and eggs in the deliveries, which are seen as the toughest challenge because an uninterrupted cold chain must be ensured.

New service trend 2: Live broadcasts with product placement

As everyone buys online, live broadcast hosts are emerging as a new species in the post-pandemic world. Chinese electric appliance brand Gree, which has around 30,000 outlets in China, was hit hard at the beginning of the pandemic. Chairperson Dong Mingzhu immediately began to tour the country to conduct live broadcasts from 13 locations.

During a live broadcast in Guilin, Dong and a chef cooked local fare in a well-equipped kitchen. She took the opportunity to introduce the appliances, ranging from the kitchen exhaust hood to the refrigerator, air purifier and juicer. During the four-hour program, household appliances worth nearly 1.2 billion RMB were sold.

Smart Fish from Chiayi, whose braised fish head casserole has been featured in a Netflix documentary on Taiwanese street food, also turned to live broadcasts to keep business going. Grace Lin, the third generation to head the restaurant chain, created her own online platform together with a friend, where she hosts live broadcasts featuring Chiayi products.

The fish head casserole, invented by her grandfather Lin Tsung-ming, has been sold for 68 years. Lin returned to Chiayi 17 years ago to take over the family business. Since then, revenue has increased 20-fold.

During the pandemic last year, Smart Fish’s revenue not only didn’t suffer, but grew 20 percent to NT$270 million. This May, in-dining revenue declined by 60 percent after Level 3 restrictions were implemented nationwide, while takeout revenue soared.

Lin recalls how the first batch of fish head casseroles for home delivery all went bad. Lesson learned, they increased their freezer capacity, figured out the freezing time and created Google order forms. Meanwhile, home deliveries have increased from a handful per month to a daily average of 2,000 orders. Yet, customers hoping to get the popular street food delivered to their homes will have to be patient, because, due to full order books, the waiting time currently stands at two months.

New service trend 3: Remote delivery of healthcare makes its debut

Remote healthcare is also undergoing change. Internet giants Tencent and Google have invested in Practo, an Indian digital healthcare platform, whose estimated market value has already reached US$900 million. Analysts regard the e-healthcare provider as a quickly rising star with unicorn potential.

The platform offers online medical consulting, brokers doctor’s appointments and arranges drug delivery. Amid the heavy onslaught of the pandemic in India last year, Practo’s usage grew ten-fold in the second half of 2020.

Presently, more than 250,000 physicians use the platform to conduct 20 million consultations per month. The platform boasts 175 million registered users.

In Taiwan, the Hualien Tzu Chi Hospital has teamed up with public health centers in Hualien and Taitung counties, using the 5G-network of private telecom provider Far EasTone to deliver healthcare remotely, sparing patients the trouble of often time- and energy-consuming trips to the hospital.

Ms. Chin, who suffers from diabetes, lives in Xiulin, an indigenous mountain township in Hualien County. Previously, she had to spend an entire day every three months traveling to the hospital in Hualien to be checked for signs of retinopathy, a complication of diabetes. Now she visits the local public health center for such routine checkups.

The physician at the public health center uses an ophthalmoscope to take digital images of Chin’s retina which are stored in the cloud. The physician’s computer connects with the Hualien Tzu Chi medical center via the internet. Thanks to this remote setup, Chin can have a video consultation with the eye doctor at the medical center 15 kilometers away (due to the mountainous terrain, the trip would take one and a half hours by car one way). After analyzing the images in the cloud, the Tzu Chi ophthalmologist tells Chin what she needs to do to protect her eyesight.

Lin Chin-lon, chief executive officer, TIMA & Mission of Medicine with the Buddhist Tzu Chi Foundation, once said: “We hope to build a hospital with 350,000 beds, because Hualien has a population of 350,000 people, and the beds are in the patients’ homes!”

The medical community anticipates the remote delivery of healthcare to become established on Taiwan’s remote east coast, where medical services are not as readily available as on the densely populated west coast.

“Pandemics, wars, depressions—these shocks are painful, but the times that follow are often among the most productive in human history,” asserts Scott Galloway, marketing professor at New York University, in his new book Post Corona: From Crisis to Opportunity. This seems to be a fitting footnote to our current times.

Transated by Susanne Ganz
Edied by TC Lin
Uploaded by Claire Wei