Tearing through the globe, shutting down societies, the Covid-19 pandemic is going to be one of the biggest challenges we ever face as a global population. In addition to decimating health care infrastructure and taking hundreds of thousands of lives, the pandemic is also wreaking havoc on the modern global economy.
Practically no business in any industry has been left untouched by the current situation. As nations are starting to loosen their lockdown regulations, experts are claiming that right now we’re still on the “upslope” of the epidemic, so it’s not over yet — at all. Like the impact of the 2008 Lehman Shock, we can expect that once life on the surface is back on track, the ripple effects will continue long after the izakayas start to reopen.
While many of Japan’s small- medium-size businesses are struggling to make ends meet, there are still a handful of companies that are thriving in the time of the pandemic. While it may still be early to plan anything for the future, it could be that the current situation is giving us hints that, perhaps, these are the industries to invest in if we’re looking into starting our own post-corona businesses.
“In the last month [March-April] we’ve had about a 70% increase in users,” says Aska Ross, an associate at UberEats Japan. “We first noticed a huge increase in restaurants asking to join the platform as far back as February. At the time we speculated it was due to the coronavirus but now, in hindsight, it definitely was due to corona.”
The connection between the virus and the spike in users is faceted, Ross explains. “[Recently,] we’ve gotten lots of exposure on the news, so it’s difficult to isolate one thing causing a spike, and we were also running a large marketing campaign in four cities, so it’s difficult to isolate one single event as causing a spike.”
As the number of Uber Eats delivery drivers and users reaches peak levels, Ross has noticed there’s another far more worrying trend. “We are seeing the number of restaurants coming online falling very slightly as of three weeks ago. It could also be because they are shutting down.” As a way to keep the businesses open and on the platform, Uber is waving sign up fees running promotions to drive trips to businesses and partnering with many local governments to help protect restaurants.
Japan’s largest delivery platform, Demaekan, which has over 20,000 subscribed restaurants across the country, has also seen a rapid increase in new users. The company had 2,710,000 orders as of the end of January, a 7% year-on-year increase, but by the end of February, the numbers had increased to 18% and furthermore to 21% year-on-year growth as of the end of March.
Meal prep and grocery delivery services
With fewer people eating out and more people cooking at home for the whole family (while trying to avoid crowded supermarkets), meal prep and grocery delivery services have been among the most popular businesses over the past few months. Seikyo, the owner of Co-op Deli, one of the biggest names in the industry in Japan that delivers everything from fresh ingredients to baby food and ready meals, saw a 14.2% increase in food and daily supplies delivery.
“Isolation” sport shops
A more independent industry that is surprisingly experiencing a renaissance of sorts is local skate shops. Yusuke Kageyama, an avid skater, said that his local shop, Instant, in Kichijoji, was experiencing an influx of new wannabe Tony Hawks. He believes skating is the ultimate isolation sport.
“The store staff were telling me they have new customers every day. Usually, kids who are interested in skateboarding but didn’t have time. I have noticed the last couple of times I was at the shop, there were a few families trying to buy one.”
“Ok, this is the logic,” he explains, “all the schools have closed since the beginning of March, including their club activities, so those students have nothing but plenty of free time. If you were the parents of them, what would you do? Skateboard! It’s outdoor, you don’t need to be with anyone, and it’s a good workout.” Right now, he thinks it is the best time for “kids to convince their parents to buy them skateboards.”
Online shopping is without question right in its golden era, our online usage is at an all-time high, and with stores closed, the e-marketplace is where we’re all turning for retail therapy. Japan Crate is a candy box subscription service that is experiencing its highest traffic since before November, at least, with 200,000 potential customers visiting the site within the past month.
“We’ve been experiencing great performance and high subscription numbers,” said Japan Crate’s Adele Buncke, in large part due to the uptake of social media usage. “Our business has always been online with a strong social media presence. Due to quarantine, more people are active on social media platforms and on the internet as a whole.”
“The only issue we are facing is shipping since post offices are quickly enforcing new restrictions, but we are actively exploring alternatives to our previous methods and still getting crates to our customers,” Buncke explained.
Video call and mobile device management services
As many offices struggle to make a move to online teleworking, video call services have also been a new addition to the lives of so many here in Japan. Zoom is the most notable player in the game, but Whereby, another video call platform “has seen a 10x increase in the number of users in Japan within the last four weeks and is fast approaching almost 1,000,000 users a week,” according to Ingrid Ødegaard, Co-founder and Chief Product Technology Officer.
Mobile device management (MDM) services are also “seeing a growing demand for improvement of operations,” says MDM company BizMobile CEO Yoshihiro Obata. They’re also discovering new ways to get people back in the office faster and more safely. “We announced a new service under our subsidiary (IoT-EX Inc.). It will provide a service for enterprises so that they can identify close contact persons, mainly in meeting rooms, with a Covid-19 infected employee. This will allow large companies to limit the number of employees to be quarantined (sent back home) when they have an employee infected by the virus. The service requires a sensor in meeting rooms, which is made of Android smartphones managed by an MDM.”
While companies are working with MDMs to get people back in their offices, according to online education service Cafe Talk, many people are using the time to go back to school. Cafe Talk’s Tutor Communications Manager Madeleine Maier says, “compared to the previous months, student sign-ups have increased three-fold in March and April. On the tutor side, we are seeing an even bigger increase of three times the usual sign-ups in March and now four times in April, compared to before the crisis.”
“English has always been the most popular category on Cafe Talk,” Maier says, “and since it’s often the first type of lesson students sign up for we have seen an increase similar to the increase in student sign-ups. Followed by Japanese lessons, which have also seen increased demand and a lot more sign-ups from experienced language teachers and bilingual hobby teachers alike. We have also seen higher demand for music instrument lessons and workout and yoga lessons.”
For Cafe Talk, it hasn’t been an easy transition for the company to move completely online, but Maier believes it’s been a beneficial experience. “Our Tokyo office members now understand the struggles of those who had previously worked remotely better. We’ve started doing ‘online nomikai’ that span over several hours where team members can just join and leave any time, and that has allowed the teams in different time zones to interact more with each other outside of work. Due to the time difference, some might be drinking their morning coffee while others are having an evening beer, which is definitely a little bit strange.”
Although there are a handful of companies that are performing somewhat better in this crisis due to the nature of their services, the reality is that far too many more are suffering — and will be for a long time — under the impact of this pandemic. There has never been a more important time to support those businesses now. If you’re looking for some ways to help, look into how you can reach out to your local business community as a start.
For further information on businesses that are offering various services to help the community and themselves in those trying times, see our TW Together page.