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A face mask wearing food delivery rider in Beijing. With people staying indoors during the coronavirus outbreak, companies across a range of sectors are trying new ways to reach their customers. Photo: AFP

China’s US$2.3 trillion property sector tries out VR amid coronavirus scare, online food deliveries, health care set for long-term boost

  • VR is unlikely to become a long-term trend, but online health care services could
  • Online food delivery services experience unprecedented bounce in demand

How do you keep a 15.97 trillion yuan (US$2.3 trillion) industry ticking in the middle of an outbreak that has got 46 million people on lockdown?

Mainland Chinese property dealers – banned from opening their sales offices in at least 60 jurisdictions amid an outbreak that has claimed 425 lives and infected more than 20,000 people – are turning to virtual reality (VR) technology as well as social-media platforms such as WeChat, in addition to websites, to sell homes.
Last week, companies including Hong Kong-listed mainland Chinese property developer and integrated living services provider Greentown China Holdings and Beijing-based China Fortune Land Development launched WeChat mini programs that will let their customers undertake VR tours of properties for sale. LeJu, a New-York listed, Chinese real-estate services platform has created a section for virtual tours following the outbreak. It already offers free hotlines and WeChat groups for buyers.

But even if VR – a new buying method unavailable during the Sars (severe acute respiratory syndrome) outbreak in 2003 – might attract some potential homeowners, it is unlikely to become a long-term trend, analysts said.

“It is not a problem that can be solved by companies adopting creative sales and marketing measures,” said Zhang Dawei, chief analyst at Centaline Property. “People still want to view flats on-site … an online visit is only supplementary.”

While property companies have their work cut out, sectors such as online health care consultation might actually become more mainstream. Food delivery services too will reap the benefits as the masses stay at home.

Online health care companies have waived fees and are making additional manpower available to serve those stuck at home. And the sector is likely to see long term benefits from growing traffic, analysts said.

In the six days to January 29, Tencent Trusted Doctors, formed through a merger of Tencent Doctorwork and Shanghai-based Trusted Doctors, handled 1.21 million online consultations nationwide. This was quadruple the customer numbers reported in the same period last year, according to a spokesperson.

On January 24, it cut its online medical consultation fees for customers in Wuhan to one yuan, from an average of 49 yuan.

Hangzhou-based WeDoctor Group, which is also backed by internet giant Tencent Holdings, has mobilised more than 14,000 doctors – mostly volunteers from the state medical system – who provided about 777,000 online consultations between January 23 and 30, according to a spokesperson. Consultations – the kind that would usually cost from 19 to 29 yuan – are now free if related to the coronavirus scare.

“The novel coronavirus outbreak has highlighted the importance of online medical consultation services,” Daiwa Capital Markets analysts Leon Qi and Kevin Jiang said in a note recently. “We believe [the outbreak] will educate the market about online medical [services].”

Online food delivery services are experiencing an unprecedented bounce in demand as well. “Typically, demand of food delivery during the Lunar New Year holiday is lower than normal days. This year is different,” Pedro Yip, partner at global management consultancy Oliver Wyman, said in reference to mainland China. “Most people are not willing to go out to buy food from supermarkets, or to eat out.

“The situation has been exacerbated by the lack of face masks. We noticed the demand for delivery this Lunar New Year holiday is much higher than in previous [years],” he said, without giving figures.

An unnamed Shanghai food delivery company interviewed by investment bank Jefferies recently said it had recorded a 40 per cent rise in sales for the first few days of the holiday, compared with last year. It’s gains had slowed as malls started to close early, but orders remained 10 per cent higher than the same period in 2019.

A challenge that was holding even more business back was a lack of drivers returning to work, as the situation worsens, according to both Jefferies and Oliver Wyman. “If delivery capacity was not an issue, the orders this year could easily by 10 times that of last year, or more,” said Oliver Wyman’s Yip.

In Hong Kong too, the sector is booming, as more people work from home. London-headquartered Deliveroo, which says it has 5,000 Hong Kong restaurants on its app, reported a 20 per cent rise in orders over the Lunar New Year period compared with the week before.

German rival Food Panda, which claims to have 7,000 restaurants on its Hong Kong app, said it had recorded an 80 per cent rise in orders, particularly for bottled water, canned beer and cup noodles, Arun Makhija, its Hong Kong chief executive, said.

This meant “continued growth” compared with the 2019 holiday period. “We anticipate the demand will probably grow continuously due to flexible working arrangements,” he said. “We have also seen a higher demand in areas outside the central business district, such as Kowloon and New Territories, in line with the increased cases of people working from home.”

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