Footfall has improved since circuit breaker in June. It's nowhere near pre-COVID levels but still it's better than none. Everyone is masked up except for those who are eating or having a coffee like me. The tables are now more widely spaced - which I'd always thought it should be that way. On the face of it, everyone seems to be getting used to the new normal.
It's good to see some activity in the malls. It implies that the office crowd is back and that in turn drives the F&B businesses. It keeps people employed and keeps the economy running.
Generally speaking, this crisis is somewhat different from the 2008 financial crisis.
In theory, some jobs should only be more directly impacted than others, particularly those in the travel and tourism sectors. And savings from non essential travel should technically allow businesses to sustain operating expenses and maintain headcount.
That said, as companies today have largely regional / global operations, and are significantly reliant on travel, the entire economy takes a hit. The lack of inter-city commute provides a good 'excuse' for many decision makers to withhold aggressive marketing and expansion plans, creating a further drag on revenues across the entire value chain.
I imagine that the uncertainty can be unnerving. For now, let's all sit tight and I'll check back again in another three months.
Zoom's share price was up 40% last week.
"If we can work well together online now, perhaps it will permanently reduce the need for business travel"
Work-from-home protocols, tele-commuting, webinars and virtual meetings may permanently alter business travel, which accounts for a significant portion of aviation revenues. Zoom isn't the only winner here. Given the restrictions on daily commuting, technology has become an enabler of businesses and lifestyles. Many tech-related stocks ranging from cloud computing, e-commerce to data security have benefited greatly as a result of this migration to the digital realm.
Early investors in Zoom and other tech stocks were lucky. But one might wonder if it still makes sense to even buy its shares. At its peak, Zoom traded at more than 2,000 price-to-earnings, implying a dividend yield of 0.05%.
“Our ability to keep people around the world connected, coupled with our strong execution, led to revenue growth of 355% year-over-year" - quote from Zoom's recent earnings call
Clearly investors are not buying technology stocks for their dividends.
Everyone who has a positive rating on the sector is valuing it based off the scenario that we won't be returning to our offices soon. Not at least within the next 12 months.
A few months ago, people had already been speculating about a second wave. This has since emerged in several major cities - South Korea, Hong Kong and Japan. The effect of the virus is also festering down south in Australia where it is currently winter. Governments are holding their breath in anticipation of a third wave towards the year end.
For now, it doesn't look like the nightmare of travel bans and city lockdowns are easing anytime soon. This virus could linger around for a few years and you could be using Zoom for a longer time than you think.
Right place at the right time
Using Zoom underscores the innate desire to engage in a face-to-face setting. Apple has tried to do this with FaceTime in the peer-to-peer context. Skype has video calls. Polycom even offers an immersive platform which is targeted at large corporates with the budget to invest in virtual-presence-type meetings. Doing so allows their professionals based in multiple cities to communicate in real-time without the need to fly to a single location.
While these paid-for-service features have not been cheap, corporates weigh the trade-off between the cost of a business class air ticket vis-a-vis the cost of an enterprise-grade platform.
Video conferencing is not state-of-the-art tech. But Zoom was caught in the right place at the right time. In a world without safe distancing and masks, demand for real-time video communications and webinar broadcasts might never have evolved into the defacto standard today.
Unlike Polycom, Zoom had somehow managed to make tele-presence accessible easily and quickly for everyone across all budgets during a time where the world needs it the most. Albeit the initial security issues that surfaced as a result of its popularity, the app continues to serve its main purpose of facilitating conversations between people and it connects seamlessly. Most importantly: it just works.
Take a look at Apple. The technical specifications of its products are not superior to the Microsoft or Android counterparts. In fact, Apple products are pricey. But loyal fans of Apple (including me) continue to buy the iPhones and Macbooks, happy to settle for a less than top-notch hardware.
Maybe it's Apple's iCloud ecosystem, or the make of the phone. Or maybe there's something enigmatic and addictive about its minimalistic design that appeals to a certain group of users.
And just like how people are drawn to the allure of Apple's simplicity, if there's anything that Zoom has gotten right, it is probably the ease of installation and use.
More important than usability, the majority of governments and organizations around the world have also mandated extended periods of work-from-home procedures and no physical client meetings. Very draconian you say, but who can afford the socio-economic risk of a second lockdown?
What happens when the show is over?
After this pandemic is over (either through herd immunity or via a vaccine), I am guessing that most people would still use Zoom in their day to day work, but the real question is how many will continue to pay for its enterprise grade functionalities? Keeping in mind our natural instincts to engage someone else in person, and also because as humans, we will probably start to forget the pain of the initial lockdowns. People around the world will likely ditch the newly formed "work-from-home status quo" and revert to air travel, physical meetings and mass events.
But in the current day where airline stocks continue to battle for survival and media reporting new cases daily, it might be easy to rationalize why Zoom can trade at 2,000 times earnings.
Investors and stock watchers can be restless and impatient people.
In 2013, CEO of Apple, Tim Cook, told the media that "some really great stuff [was] coming in the fall and across all of 2014". This was equivalent to saying: "We've got nothing for you this year, but stay tuned next year!". Analysts and investors listening to the briefing were unimpressed and Apple's share price took a mild beating.
Like the ubiquitous smart phone, video-conferencing tools are not cutting edge technology. It remains to be seen if Zoom can really deliver on growth through innovation, transformation and create sustainable value for its customers in the same way Apple had done with the iPhone.
Before emails became the norm at the workplace. People worked around the boundaries of the 9-to-6 work hour regime. The generally accepted convention was that: If you'd tried to reach someone after hours, there would be no one there to pick up the phone, because everyone at the office had gone home. The only way you could try to reach out to that person again was to call back the following morning. The telephone or face-to-face meetings were socially and professionally accepted protocols.
First email addresses, then came the personal computer.
In addition to receiving just a verbal confirmation, we then had the ability to communicate and access a wider variety of information media - lengthy text messages, pictures and sometimes videos (bandwidth permitting).
This transformation gave way to many opportunities for individuals and businesses to communicate: digital e-receipts containing information that would allow us to reduce the back-and-forth phone calls, allowing us to make collective decisions in a much quicker way. Although the speed at which we conducted business increased significantly, we were still constrained by the boundaries of normal working hours as personal computers were largely used in the office and people left their workstations at the end of the day.
Laptops and WiFi.
We used to access the Internet by plugging one of these cards into the side of our laptops. That enabled us to surf the net wherever that was an Internet access point - at school, at work, in the cafe, at public places, etc. More importantly, with Internet on the move, we could now send and receive emails virtually anywhere. Having access to emails at home implied that people were able to continue to respond even after the stipulated working hours. Implied is the operative word here because there are no real obligations to reply a client or your boss after working hours. But think about the potential consequences that come along with this:
A competitor might beat you at responding to a potential sales lead while you were "out of the office". You might have missed that long awaited promotion at the workplace just because you failed to scratch the itch in your boss' brain on an idea for a new product launch at 1am in the morning.
So, now we have started to over-step the boundaries. In the past your performance was judged based on your presence and delivery at the workplace. Today, in the digital world, you are omni-present and being judged all of the time. Responsive-ness (or in this case the lack of it) translates to missed opportunities, lower sales, and lower bonuses.
This vicious cycle and frenzy of responding to emails after office hours gets propagated over the years, and clients/bosses grew accustomed to the instant gratification of having an almost immediate response from a vendor/colleague. Just think about the number of times you had felt uneasy just because a friend or a colleague didn't reply to your email "immediately". Instant gratification.
Emails and instant messaging are now so cheap (and virtually free) that we are communicating and replying every minute on a daily basis.
A compulsive need to reply every message.
Today, my whatsapp and wechat sometimes looks like this:
I used to have a compulsive need to reply to every message that comes in. The habit stemmed from years of working in a corporate finance role where every deliverable was expected to be served in double-quick real time. It was to the extent that even the mere sound of the notification (both email and whatsapp) gave me butterflies in my stomach. Half the time, it was an email coming in from someone expecting work to be done. The process was hard-wired and programmed into my nerves and I'd lived the majority of my work life (>10 years) on that instinct. It was unhealthy.
Today, I am glad that I have grown out of this toxic mindset, which has obviously resulted in the consistent backlog of messages in my phone. I also do not feel any guilt for not replying someone on a timely basis. My whatsapp chat list is like my email inbox. I reply only if the matter requires my urgent attention (in which case, the person would have most likely called me), or when it is convenient for me.
Email takes a back seat.
The introduction of Whatsapp, Wechat, Line, etc have blurred the lines between our social and professional circles. It is the defacto go-to channel for getting things done - at home of at the office. Email is just for keeping things on the record. As COVID-19 continues to keep people at home, these communication tools will increasingly be the norm with Zoom being the latest addition to the family.
It is going to feel somewhat awkward in navigating a world where nearly all business dealings are done away from the office and in an entirely virtual domain or even from home. No more visits to posh looking offices in the city area or meetings in gigantic boardrooms overlooking the waterfront bay.
"It is great to meet you on Zoom. By the way, the background behind me is my study where I spend nearly most of my waking hours. This is my new suit. I'm not wearing long pants by the way. In fact, I'm probably not wearing any pants at all."
It might end up becoming a new way of life.
Digitization and technology makes all things possible. An example is the signing of official paper documents. Physical copies and in-person signatures might have been mandatory in the past but in today's context many companies have come to accept e-signatures as the standard.
Today, we speak of work-from-home ("WFH") as if it is a separate and alternative business continuity procedure. But in years to come, the physical dimensions of what defines the office and what defines the home will be so blurred that the term WFH will no longer be relevant.
The phrases: "I'm working at the office today" or "I'm working from home today", will hold no meaning. It'll just be: "I'm working" and you will be deemed to be working ALL the time.