The next Uber & new waves of business after recession
Guest Column: Adam Singolda, Founder and CEO, Taboola, shares more on the categories that will be ripe for startup innovation now
Looking up at the bull's horns while the bear swipes us down should be every business’s focus in the wake of COVID-19. Volatile stocks, record unemployment rates, and predictions of our worst recession yet are naturally spurring companies of all sizes into cost-cutting defence, which is natural. Most people's natural behavior in times of crises is to look inside for solutions or protection.
Recessions, while always difficult to navigate, have fostered some of the most impressive companies in history. The Great Depression brought us GE, Disney, and HP, who all benefited from marketing while their rivals cut back. The Great Recession brought us companies that ushered us into the digital age and opened up the gig economy—Airbnb, Credit Karma, Uber, Slack, Venmo and Square.
These companies were successful because they looked outside for opportunities as times changed and came up with products and services the world needed. There were many signals that illustrated their eventual rise—but their success was fuelled by a world looking for alternative work during hard times.
During the recession, just before Airbnb was founded in 2008, searches for the keyword ‘mortgage’ were beginning to drop, and the number of real estate, rental and leasing contractors was increasing by almost half a million. The share of the U.S workforce in the gig economy as a whole rose from 10.1% to 15.8% in 2015. People were looking for ways to reduce their costs and earn more anyway they could.
Airbnb and many other examples that fueled desire for alternative income in 2008 and 2009 were born from loss—we lost 533,000 jobs in 2008, the biggest drop since 1974. The desire for alternative work arrangements stuck. As we came out of the great recession, the number of people doing alternative work rose by over 3%.
Back to 2020. After the coronavirus fades from the public mindset, what might be the next “gig economy” born from this recession, what is going to be the next AirBnb, or Uber?
Looking at a variety of data sources shows these as the categories will be ripe for startup innovation.
Home Cooking: 87% Growth in Consumer Interest
The combination of empty grocery store aisles and closure of restaurants has driven many people to experiment with new recipes by watching and reading cooking-related videos and articles to satiate their hunger pangs for restaurant style cuisines.
Many countries, including India, applied lockdown due to the COVID-19 outbreak. During this time frame, there was a huge surge witnessed in the pageviews around recipes and home cooking in India. An increase of 87% in pageviews and 4.8 million traffic on cooking recipes and what celebrities are cooking with topics like Lockdown Cooking Tips, Quarantine Curation, etc. were extremely popular. Businesses selling the materials to support them are thriving. As a result, the sales for and grocery food items increased during the period. ITC Limited saw increased demand for frozen snacks in retail by 25% to 30% when compared to the pre-Covid period.
Pet Products: 50% Growth in Consumer Interest
Lockdown has been an opportunity for animal shelters, who have urged people to adopt while home—and it's working. People have adopted 10x more pets than usual there has been a 70% increase in adoptions from shelters. In fact, shares of Chewy, Inc. a popular pet marketplace, are up 7%.
We’ll start to see a whole new host of pet-related businesses—from the basics of food, toys and grooming, to mainstream TV channels for dogs like dogtv.com, more dedicated Netflix original shows for pets to keep them entertained, a proliferation of homemade meal services for cats and dogs like NomNom, virtual dog training courses, and tools to communicate with your pet like Hunger For Words.
In India, consumers’ interest has seen an increase in bank loans, automotive and taxes. During the lockdown, articles about loans recorded 5.3 million pageviews that focused on the falling loan interest rates, how to apply for home loans, etc. As the Income tax filing season has been extended until 31 July this year due to COVID-19, there was an increase in traffic related to articles about income tax and recorded 2.6 million pageviews. Bank credit between March 27 and April 10, which came under the first 21 days of nationwide lockdown, shows a staggering 11 per cent rise of Rs 10.73 lakh crore.
Amidst the lockdown, people especially automotive enthusiasts have been keen to read about new car models during this time even though it is unclear whether they will actually commit to purchasing a vehicle. Around 4.4 million pageviews were recorded where people searched about top BS 6 compact SUVs. Recently, Maruti spokesperson indicated an increase in enquiries by 80%- 90% during the lockdown as compared to same time period last year and the trend in the last 3-4 weeks signals a quick rebound.
Gaming: 145% Growth in Consumer Interest
This may be obvious—video games and board games are providing all types of people with a welcome escape in lockdown. The Nintendo Switch is flying off the shelves, and the company currently can’t make enough game consoles to meet the demand. This is due in part to one of their new releases, Animal Crossing, which has drawn the attention of the masses from across the globe.
In fact, as many people turn to safe, at-home entertainment, the U.S, has spent $1.597 billions on gaming hardware—a blockbuster amount—since the great recession, when we spent over $1.8 billion on hardware.
Our enthusiasm for gaming has been reflected on the open web. We’ve seen a 145% increase in gaming page views on publisher sites.
When it comes to gaming in India, PUBG Mobile has been the most popular game as well as a topic of interest with an increase of 2.3 million pageviews recorded. Some interesting articles like “How to play PUBG Mobile on PC or Laptop” engaged the gaming enthusiasts.
There’s a huge opportunity for people to connect through video games—it could be the sports’ world next frontier, as eSports are currently outperforming their goals. Games that include world building scenarios, the ability to socialize and incorporate exercise will thrive post-pandemic.
Fitness And Health: 2,000,000% Growth in Consumer Interest
Most of the health-related news cycle revolves around obesity in relation to coronavirus deaths, but also, educational content on how to not lose weight in lockdown. Searches for ‘weight loss’ have steadily increased the more time we’ve spent in quarantine, and the more fitness and health apps we download. According to Statista, we downloaded over 2.6 million home workout, no equipment apps in March of this year.
Staying healthy sustainably, and while sedentary, is a challenge. But some companies are starting to figure it out. Blue Apron recently made a comeback as more and more people look to learn to cook healthy, and Peloton stock is up 4% in the last month.
We’ve seen a huge spike in searches related to weight loss since the global pandemic began.
During the lockdown in India, apart from taking all the precautionary measures against COVID-19, boosting immunity has been a major goal for all. An increase of 5.6 million pageviews, which is a total of 39%, were recorded around stories that focused on health benefits of turmeric and recipes for immunity-boosting foods.
Now stuck at home, we’re now more aware of our fitness, which may build habits that stick around. With so many healthy food, fitness and exercise options available, there’s an opportunity here for aggregation of the market.
Just like we saw streaming services aggregate to places like Roku and Apple TV, fitness and food aggregation will be next. Physical gyms might also thrive later, to meet the new demand.
I’m Optimistic. Entrepreneurs This is Your Moment
The news cycle is a direct reflection of what’s grabbing consumer attention in real-time. Successful businesses will heed it’s advice and use it to “look outside” in times of crisis, but also how to “look inside” effectively to determine where to save costs and make responsible business choices.
There is not enough content that speaks about why the opportunity in all of this for existing companies, and new companies that will be born now and be with us forever. For the next Airbnb of healthcare, of fitness, of home improvement, look outside.
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