Coronavirus disrupts China’s on-demand app industry

People ride past shared bikes at a bike lane in Wuhan, Hubei province, China June 26, 2017. Picture taken June 26, 2017. REUTERS/Stringer

Beijing is always bustling. But as coronavirus fear grips the globe, the Chinese capital and its more than 20 million residents have practically come to a standstill. Theaters have gone dark, stores are shuttered, and schools are closed indefinitely.

The government has called off festivities for China’s most-celebrated holiday, the Lunar New Year. Families, including my own, have canceled gatherings. Office dwellers are working from home en masse. And the streets are eerily quiet.

As millions shelter in place, there should at least be one economic bright spot: boom times for food delivery businesses. But even that industry is facing new obstacles as the number of coronavirus cases on the mainland rises to more than 11,000.

Instead of cashing in on the home-confined population, some food delivery apps, like Sherpa’s, have suspended operations. When I tried ordering from Alibaba Group Holding Ltd.’s grocery app, it said I couldn’t get delivery and suggested I go to the store. JD.com’s app is out of some items and showing longer delivery times, as more people attempt to stock up to avoid leaving the comfort and safety of their homes.

There are still restaurants available on Meituan, but many customers are hesitant to place orders over concerns they could get infected by delivery couriers. In response, Meituan started offering a delivery option that allows couriers to drop the food off at a designated area without having to interact with the customer.

Meanwhile, many drivers for the country’s largest ride-hailing app, Didi, said they’re often sitting idly without work. One said he usually gets requests every minute around the Lunar New Year but now has to wait 30 minutes or more. The company recently suspended trips from one city to another.

For those brave enough to venture outside, there’s not a lot to do. Around my neighborhood in Beijing, most restaurants and grocery stores are shut down. For many of the ones that remain open, citizens are greeted by guards holding temperature readers in buildings across the city. To enter some restaurants, stores or even my own apartment building, I have to pass a temperature screening. In some places, I have to sign my name and write down my temperature before walking in.

Those screenings are fallible. Chinese officials have said patients may be able to spread the virus without signs of a fever or any other symptoms. Though the death rate for this virus is lower than that of SARS, the mild nature of the coronavirus could allow carriers to go undetected for as long as two weeks. That could prolong the crisis beyond the duration of the SARS outbreak in 2003.

Depending on how quickly the coronavirus is contained, the travel bans, store closures and psychological fear of spending time in public areas could exact a heavy toll on global business. The transportation and hospitality industries are taking the brunt of the outbreak, as hotels shut their doors and airlines cancel flights to China. (Airbnb Inc., notably, is still open for business in the virus epicenter of Wuhan.) Warwick McKibbin, professor of economics at the Australian National University in Canberra, estimates that the global cost of the coronavirus could be three or four times that of the SARS epidemic that drained the world’s economy of $40 billion.

A lot has changed since 2003. You can summon a car or a meal from your phone in minutes. But the new outbreak shows that even the on-demand economy isn’t immune to the effects of a health crisis.

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.