Must Target China's Rapidly Emerging 'Untact Industry' Due to COVID-19

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[Asia Economy Reporter Hwang Yoon-joo] In the wake of the COVID-19 pandemic, China's contactless business is rapidly expanding across various industries and extending its user base to all age groups, highlighting the need for swift participation by Korean companies, according to an analysis.

According to the "Contactless Industry in China Gaining Attention Due to COVID-19" report released on the 15th by the Korea International Trade Association's Beijing branch, amid the recent economic downturn in China, demand for contactless-based 'untact industries' such as remote work, online education, telemedicine, and online fresh food purchases is increasing, emerging as promising sectors.

China's remote work usage rate was only 0.6% in 2018, far behind the United States (18.9%) and the United Kingdom (12.8%). However, with the rise of working from home during the COVID-19 prevention period, the market size this year is expected to be more than three times larger than in 2018. In March, Alibaba's communication platform DingTalk announced it would recruit about 1,000 additional workers as service demand surged, with over 100 million users daily and 20 million video conferences held.

Additionally, in China, online education services are replacing offline classes as schools delayed reopening and academies closed after the Lunar New Year holiday. New Oriental, China's largest education service company, announced that since the end of January, all lectures have been moved online, with over 970,000 participants attending online classes. Xueersi, in collaboration with state broadcaster CCTV, has been offering free primary and secondary school courses since February, and Yuanfudao provided free online educational content and live broadcasts, with over 5 million simultaneous viewers on the first day of classes.

Telemedicine services are also expected to gain further momentum. During the Lunar New Year period, up to 6.71 million users per day received remote medical consultations through major Chinese online medical applications, marking an increase of over 30% compared to the same period last year. Last year, China's telemedicine market size reached 19 billion yuan (approximately 3.3 trillion KRW), more than quadrupling since 2015, and is expected to grow even more rapidly this year.

Online purchases of fresh foods, such as vegetables and seafood, which traditionally had a relatively high offline store purchase ratio, have also significantly increased. The report stated, "During the Lunar New Year holiday, sales on major platforms such as Meiruyousen (Tencent), Jingdong Daojia (JD.com), and Hema (Alibaba) increased three to four times compared to previous years, gradually replacing dining out and offline store shopping," adding, "This trend is expected to continue, and our companies should actively utilize online platforms to participate in the market."

Park Min-young, head of the Korea International Trade Association's Beijing branch, said, "The untact industry, which started with consumer-oriented (B2C) online shopping, is expected to expand to business-to-business (B2B) transactions and society at large," and forecasted, "With the development of cloud computing, various unmanned services, and home entertainment, the untact industry will become a part of daily life."

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