[Lee Jong-woo's Economic Reading] The Era of Everyday Contactless Life, Online Consumption and K-Medical Care

COVID-19 Severe in March-April, e-Sales Increased by 16.9% and 12.7%
PG and MyData Expected to Expand
K-Medical Changed Global Perception, Confirmed Status with Diagnostic Kit Exports
Remote Medical Care Likely to Be Approved Soon

It is said that the world will be different before and after the novel coronavirus infection (COVID-19). Having experienced the rare situation where economic activities came to a halt due to disease, it means that people's behaviors will inevitably change accordingly in the future.

So how will daily life change? The biggest change is the normalization of non-face-to-face (Untact) interactions. Prolonged contact has often been a cause of disease spread. Having experienced that meetings, education, and medical consultations can be conducted via video calls during COVID-19, the pace of normalization of non-face-to-face interactions is likely to accelerate.

The expansion of non-face-to-face interactions will affect consumption. Although consumption decreased due to COVID-19, the situation varied by business type. In the United States, e-commerce retail sales in the first quarter of this year increased by 14.8% compared to the same period last year. In South Korea, while offline sales declined for three consecutive months from February to April, online sales increased by double digits. Online sales increased by 16.9% and 12.7% in March and April, when COVID-19 spread was at its peak. Even before social distancing became widespread, the proportion of online consumption was steadily increasing, but COVID-19 accelerated this expansion.

The activation of online consumption will also impact the logistics industry, including parcel delivery. Online consumption requires a logistics foundation. Even if producers and consumers do not meet directly, there must be an intermediary that delivers the transaction results to consumers for consumption to occur. Online consumption will affect various areas, from delivery services and call centers that receive orders to automated devices needed for distribution and delivery.

As lifestyles change, industries will be affected as well. First, with the increase in online consumption, the electronic payment gateway (PG) market will expand. Online transactions must be accompanied by payment methods, and electronic payment acts as an intermediary. Due to the growth of online shopping and simple payment markets, the scale of electronic payments in the first quarter of this year increased by more than 20% compared to the same period last year. Currently, electronic payments based on credit cards account for 80% of the total payment market, but as online transaction volume grows, other payment methods may emerge.

Along with the increase in electronic payments, the MyData business is expected to become more active. The MyData business refers to individuals managing and controlling their own information and utilizing it for credit or asset management. Currently, the MyData business is limited to integrated personal credit information inquiry services, but in the future, it is highly likely to be used to comprehensively gather financial credit information such as card, loan, insurance, and securities transactions to provide customized financial services.

Another area of interest related to non-face-to-face interactions is online content. This includes portals, mobile messengers, digital advertising, video content, webtoons, and commerce. As seen in the stock market where the status of NAVER and Kakao rose after the spread of COVID-19, these fields have been notably spotlighted due to the disease. Global consulting firm PwC forecasts that the global online video service (OTT) market will rapidly expand, increasing by 60% from $45.2 billion last year to $72.7 billion in 2023.

An industry that cannot be overlooked in relation to COVID-19 is K-medical. During the process of overcoming COVID-19, the international community's perception of our medical system changed. Unlike other countries where patients increased uncontrollably during the full-scale spread, we succeeded in controlling the disease through aggressive testing. Among various medical sectors, the areas that drew particular attention were quarantine systems, diagnostic kits, medical devices, masks, and hand sanitizers. This change in the status of K-medical was confirmed in exports and imports. While total exports in April decreased by more than 24% due to the impact of COVID-19, exports of medical and quarantine supplies, such as diagnostic kits, increased significantly, with diagnostic kits increasing twentyfold.

K-medical is receiving policy support from the government. In May, the 'Pan-Ministry Medical Device R&D Project' was announced to strengthen the competitiveness of the domestic medical device industry. Led by the Ministry of Health and Welfare, the government plans to invest 1 trillion won and the private sector 200 billion won, with plans to build regulatory approval strategies and develop technologies to expand global market share over the next six years.

Another area of interest related to medical care is telemedicine. This refers to providing medical services remotely using information and communication technology, but it is currently illegal under our medical law. However, many countries are implementing telemedicine, and it is expected that approval will be granted soon in our country as well. Telemedicine is an excellent tool to address the shortage of medical supply and low medical accessibility in rural and fishing villages.

After the full-scale spread of COVID-19, visits and users of telemedicine online platforms increased significantly in the United States and China. Accordingly, regulatory relaxation and system improvements accelerated; the United States expanded the scope of telemedicine after the COVID-19 outbreak, and Japan extended telemedicine coverage from follow-up patients to first-time patients. In South Korea, telemedicine was temporarily allowed during the COVID-19 period. These institutional improvements, combined with infrastructure expansion, are expected to accelerate the growth of global telemedicine in the future.

The COVID-19 crisis has proven the necessity of science-based policy decisions. South Korea efficiently responded to COVID-19 centered on the Korea Disease Control and Prevention Agency, demonstrating that scientists with experience in classrooms and laboratories are the most trusted sources of information in an era of uncertainty. In contrast, several European countries, despite infection risks, held large gatherings early in the outbreak, providing a decisive opportunity for disease spread, which was disconnected from scientific judgment. In September 1918, the first Spanish flu patient appeared in Philadelphia, USA. The next day, the city government proceeded with a World War I war bond parade attended by 200,000 people, and two weeks later, 20,000 infections occurred in the city alone. This past mistake was repeated. Having experienced that science-based judgment produces wise outcomes, the role of scientific judgment will increase not only in disease but also in other sectors in the future.

Advanced countries decided to proceed with COVID-19 response and economic activities simultaneously. It has become a situation where disease and economy must coexist for a considerable period, requiring meticulous attention to disease prevention.

This content was produced with the assistance of AI translation services.