Effect of COVID19 on Service Industry with special emphasis on Effect on Group Chat & Collaboration Softwares

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INTRODUCTION
The outbreak of COVID-19 has significant impact on the economy globally including
economic slowdown, trade, supply chain disruption, commodities, and logistics. Up to a large
extent, it will impact the Indian industry.
India’s economic growth is likely to slow down to 4 per cent this fiscal year on the back of the
current global health emergency, Asian Development Bank (ADB) said in its outlook for
financial year 2020-21
In its Asian Development Outlook (ADO) 2020 the lender said: Gross domestic product (GDP)
growth in India is forecast to slow further to 4 per cent in FY21 before strengthening to 6.2
per cent in the next fiscal.
OVERALL IMPACT OF COVID19 ON INDIAN SERVICE INDUSTRY (SECTOR
WISE)
Telecom Industry: Work-from-home and social distancing are expected to boost data
usage by 10-15 percent in the home broadband and mobile space in India, according to
Rajiv Sharma, head of equity research and telecom analyst at SBICAP Securities. But that’s
likely to be offset by the ongoing slowdown in the economy, leading to only to a 5 percent
growth in the companies’ top line, according to him. Bundled plans that offer long-term
recharges assure good revenue outlook and customer stickiness.

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India’s telecom sector, however, is facing a bigger problem. A recent judgment by the Supreme
Court asked the carriers to pay interest and penalty on pending statutory dues stemming from the
court’s earlier order to include non-core revenue to calculate the payouts. That dealt a blow when
the sector is already bruised by a cheap tariff war launched by Reliance JioInfocomm Ltd.
Video streaming Services (Netflix, Amazon Prime, Hotstar etc): In the short term, with
more and more people staying indoors, it is leading to a surge in TV and streaming
viewership. Self-isolation and quarantine are resulting in increased media consumption in
the home in the form of entertainment services such as video-on-demand and gaming.
Insurance: The Insurance Regulatory Development Authority of India (IRDA) has asked
insurers to cover Covid-19 cases in their existing policies as well as ensure that they
expeditiously attend to the coronavirus claims. One of the factors that work in its favour is
that it’s an under-penetrated sector and hence, the impact will be low compared to other
segments.
In fact, the insurance regulator’s decision might lead to an increase in inquiries for health
policies. More people will buy policies in the current scenario. However, It will be a follow
up impact and not an immediate one.
Source: STL Partners, FT.com

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E-Tailers & E-Grocers: Alibaba, reportedly warned of a decrease in revenue from
operations in China where coronavirus continues to adversely impact supplies, logistics, and
deliveries. However, the Indian ecommerce industry presents a picture in contrast – people
are switching from malls and supermarkets to ecommerce for purchase of everyday
commodities, resulting in drastic spikes in online orders for companies such as Flipkart,
Amazon, Bigbasket, and Grofers. However, Amazon and Flipkart has suspended all new
orders and deliveries after thelockdown.
Ecommerce companies were forced to cancel lakhs of orders & put their returns on hold
but they have assured continuing to service orders for essentials, but delivery timelines
remain stretched as they deal with operational upheaval caused by the restriction on
manufacturing and movement of goods, and people.
Figure Depicting Moody’s credit rating impact of Coronavirus by industry
Source: MOODY’S

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Shipping Industry: Coronavirus outbreak has impacted the business of cargo movement
service providers. As per the sources, per day per vessel has declined by more than 75-
80% in dry bulk trade.
Solar Power Sector: Indian developers may face some shortfall of raw materials needed in
solar panels/cells and limited stocks from China.
Aviation: In order to curb the spread of this deadly virus, the Indian Govt has suspended all
flights from March 25 to April 14. The Aviation sector is expected to lose 3.6 billion USD
only in June quarter. Also it is expected that there will be huge job cut to curb down
further losses.
Hospitality: The effect on hotel business is expected to be 70% to 75% fall as demand has
surged totally. Food delivery app Swiggy has reported almost 89% drop in demand. Movie
theatres has also been shut down and Chains like PVR, Inox are already hurt.
IT Industry: The New Year holidays in China has been extended due to coronavirus
outbreak that adversely impacted the revenue and growth of Indian IT companies.
Tourism: Perhaps the biggest economic loser in India would be the travel and tourism
industry. It is the Indian Railway Catering and Tourism Corporation (IRCTC), which handles
ticketing for the Indian Railways. Nearly 300 million tickets are booked every year through
the platform.
CASE STUDY ON THE EFFECT OF COVID19 ON GROUP CHAT &
COLLABORATION SOFTWARES (Microsoft Teams, Slack, CISCO, Hangouts etc.)
Though most sectors in the service industry has been hit hard by the COVID19 outbreak but
the Collaboration Chat Softwares have seemed to gain millions of users due to the lockdown,
increase in work from home culture and online classes being conducted by schools and
universities throughout the globe. Microsoft's Teams chat and conferencing app gained more
than 12 million daily users in one week, a 37.5% jump as more people worked from home
during the coronavirus outbreak
In the last week of March, Microsoft has seen a very significant spike in Teams usage, which
now has over 44 million daily users. Its users grew from 32 million to 44 million in the period
between March 11 and March 18 alone, as many more U.S. companies asked employees

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to work from home, Microsoft said. “Those users generated over 900 million meeting and
calling minutes on Teams daily in a single week,” Microsoft says. This is more than double the
20 million daily active users that the software maker reported in November, 2019. Microsoft also
rolled out several features designed to help with telemedicine and working from home, such as
a bookings application for Teams to help hospitals manage virtual appointments.

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Slack Technologies Inc. is experiencing a rapid user growth as demand increases for remote
working amid the COVID-19 pandemic.
The workplace communication platform said March 26 that it added 9,000 new paid customers
from Feb. 1 to March 25, representing an 80% increase over the full quarterly total for the
preceding two quarters.
Simultaneously connected users increased to 12.5 million on March 25, up from 10 million on
March 10. Returning teams, which measures the growth and progression of newly created work
teams, increased by over 120% in Italy, 34% in Japan and 33% in Korea by around March 10.
Further, the creation rate of new Slack workspaces increased by "hundreds of percent" from
March 12 to March 25, the company said.
The Daily usage of Google's enterprise videoconferencing tool Hangouts Meet is soaring, the
company reported, as workers look for ways to stay productive from home through the COVID-
19 pandemic. Over the last few weeks, Google Meet's day-over-day growth has exceeded 60
percent, Google Cloud Chief Thomas Kurian wrote in a blog post, with daily usage now 25
times higher than it was in January.

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Despite this growth, the demand has been well within the bounds. Like a number of other
businesses that offer communication and collaboration tools, Google some weeks ago
started rolling out free access to its teleconferencing tools in response to the global crisis. A
few weeks ago, the company made the advanced features in Google Meet free to all G Suite and
G Suite for Education customers globally.
Zoom Meetings active users increased 151% year over year in March, breaking its own
records. On March 31, it had 4.84 million daily user volumes within the U.S., surpassing
Microsoft Teams.
However, it has a lot of work to do in addressing security and privacy going forward. It’s
innovating incredibly quickly, much more quickly than others. Zoom’s gone through this halo
period where it was the savior. Now, in the past two weeks, every story is about how it can’t deal
with the volume or its privacy problems.
CONCLUSION
With most of the world’s white-collar workforce working from home due to the COVID-19
pandemic, there’s been an explosion of demand for communication tools from companies
including Zoom, Slack, CISCO, and Microsoft. But these effects aren’t short-term – this crisis
may change how we work going forward.
Certainly, the short-term implications are dramatic usage and, to some extent, a lowering of
expectations of quality on that usage. Companies have realized their users are more ready for
this change than they believed. Employers have found that users are far more adept at
running apps and connecting virtually than they thought.
In the long term, Working from home will become a more standardized and accepted thing;
it’ll take a long time for people to be back in the office, which will continue to put an
emphasis on anything around accessibility, remote technology, and finding data. That will be a
boost for all cloud companies, and especially meeting and collaboration tools.

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REFERENCES
 https://www.microsoft.com/en-us/microsoft-365/blog/2020/03/19/microsoft-teams-3-
everything-you-need-connect-teammates-be-more-productive/
 https://www.jagranjosh.com/general-knowledge/what-is-the-impact-of-coronavirus-on-
indian-economy-1582870052-1
 https://www.medianova.com/en-blog/2020/03/23/the-impact-of-coronavirus-on-the-
streaming-industry
 https://www.bloombergquint.com/markets/three-sectors-remain-unscathed-so-far-from-
covid-19-hit
 https://yourstory.com/2020/04/coronavirus-effect-global-pandemic-ecommerce-industry
 https://economictimes.indiatimes.com/industry/services/retail/ecomm-ops-resume-but-
deliveries-may-move-in-slow-lane/articleshow/74878732.cms?from=mdr
 https://www.livemint.com/
 https://www.thehindubusinessline.com/economy/covid-19-impact-adb-expects-indias-
economic-growth-to-slow-down-to-4-per-cent-in-fy21/article31243955.ece
 https://stlpartners.com/research/covid-19-now-next-and-after/
 https://gadgets.ndtv.com/apps/news/coronavirus-impact-google-hangouts-meet-microsoft-
teams-cisco-webex-free-access-work-from-home-2189558
 https://venturebeat.com/2020/03/16/microsoft-teams-struggles-as-coronavirus-pushes-
millions-to-work-from-home/
 https://www.news18.com/news/tech/work-from-home-effect-microsoft-claims-teams-grew-
60-percent-in-past-four-months-2543271.html
 https://cio.economictimes.indiatimes.com/news/corporate-news/remote-work-during-
coronavirus-outbreak-puts-millions-more-on-microsoft-teams-slack/74727998
 https://www.thurrott.com/cloud/233710/microsoft-details-impact-of-coronavirus-on-cloud-
services-usage
 https://www.zdnet.com/article/google-hangouts-meets-daily-usage-soars-during-covid-19-
outbreak/
 https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/slack-
user-growth-jumps-amid-covid-19-crisis-57779106
 https://glg.it/articles/zoom-microsoft-teams-and-slack-have-exploded-due-to-the-covid-19-
pandemic-can-they-hold-onto-this-growth/