The catastrophic impact of the ongoing Covid-19 pandemic is nothing like the world has ever seen before. As the outbreak spread across the world, millions of people were forced to change the way they lived and in ways that were unthinkable prior to the pandemic.

In a press conference in May, the World Health Organization suggested that it was possible that Covid-19 may never go away. As such, it would be naïve and unrealistic to expect a return to normalcy even after the current global lockdown ends. As pessimistic as this may sound, we should prepare for the worst-case scenario, where the virus is here to stay for the long run and that humanity would have to learn to live alongside Covid-19 for the foreseeable future in this “new normal”.

Let us explore some aspects of what this “new normal” will look like.

Covid-19 has forced businesses to adopt extreme business continuity plans and re-evaluate the ways in which they operate. And while this change was unexpected, the pandemic has allowed companies to experiment and re-imagine how work should be done, and the role that offices and employees can play in the future:

Prior to the pandemic, offices were viewed as an essential component to workplace productivity. It was key for leading companies to have office spaces in prime locations, and hefty investments were made to create innovative workspaces that promoted employee collaboration, efficiency and output. RHB Wealth Research believes, however, that the success of remote working has meant that the role of the once-essential office space has changed. Technology has proven to be a capable tool in allowing employees to remain connected and productive during this lockdown. Companies will be re-evaluating how much space they really need and where they should be located. Businesses are constantly looking for ways to effectively cut costs. With a heightened shift to virtual modes of working, reduced office spaces and a lower dependency on prime locations, this provides them with the perfect opportunity to do so.

The traditional way of thinking was that employees needed to remain at work with other employees in the same office to remain productive. With lockdown measures and mobility restrictions imposed, however, remote working has become the new norm. Even as the Covid-19 situation stabilises, most business leaders believe that remote working is here to stay, especially since allowing employees to work from home has brought about unexpected benefits.

Evidently, employees prefer working from home, with 90% of Singaporeans preferring remote working arrangements for varying amounts of time; and 57% of respondents of an American survey indicating that they would prefer to remain working from home in the future. Numerous studies have also shown that working from home results in a boost in productivity, where Prodoscore tracking data showed a 47% increase in productivity in 2020 in the US during the Covid-19 lockdown. Moreover, employees enjoyed greater satisfaction, as working from home allowed them greater flexibility in balancing their work and personal lives.

Even as employees eventually return to their offices, the way people work and how companies operate will change drastically. Routine business activities such as face-to-face meetings, client events and large-scale conferences may no longer be the norm. Employees may still gather at the office, but the amount of time they will work in proximity with other colleagues will decrease substantially. Safety distancing measures will need to be implemented; so to reduce the concentration of staff in one workspace, companies may open remote office branches or use co-working office spaces.

“Covid-19 has accelerated the adoption of technology in business operations. With virtual and digital replacing physical interactions whenever possible, we will see an increased adoption in technology and virtual conferencing software,” says RHB Wealth Research.

Businesses are also increasingly turning to autonomous solutions, as social distancing measures have forced them to operate with as few employees physically present as possible. Robots and algorithms will never fall sick or need to worry about social distancing.

Aside from a shift in the way businesses operate, Covid-19 has changed the way how societies function, as well as how ordinary people will live and entertain themselves.

The Covid-19 pandemic has revealed the deep flaws that currently exist in society — inadequate healthcare systems that marginalise the ones who need it most, the huge divide that exists between the rich and the poor, and the lack of sufficient government response to emergency issues. Fortunately, this crisis allows us to reimagine and reconstruct a new and more effective society.

This crisis exposed how poorly prepared healthcare systems were in responding to a crisis of this magnitude. In the immediate aftermath to the pandemic, countries will look to expand treatment capacity, emphasise on medical care, increase medical preparedness and focus on effective long-term healthcare solutions.

As conventional brick-and-mortar stores were forced to shut down because of lockdown measures, consumers turned to e-commerce and online retail outlets to fulfil their shopping needs. Even as the pandemic subsides, this increased demand for e-commerce is not expected to subside. In the short to mid term, demand for online retail would remain, as consumers would still be wary of the coronavirus — at least until a vaccine is discovered.

“Even if an effective vaccine is in the market, we believe that online shopping and e-commerce would still continue to thrive. Consumers are likely to keep the behaviours and habits formed during the stay-at-home period. So, it is highly likely that e-commerce, with its high degree of flexibility and convenience, is here to stay,” says Tan Jee Toon, chief investment officer of Asia-Pacific equities at RHB Asset Management in Singapore.

The rise in e-commerce would have tremendous detrimental impact on traditional brick-and-mortar stores. First, retailers would need to ensure that outlets comply with more stringent health and safety regulations. Retail outlets will also need to ensure that the in-store experiences are truly outstanding to give people reasons to leave their homes and venture outside. Ultimately, in a post-Covid world, we will see retailers working to improve their in-store experiences while developing seamless online shopping services.

The coronavirus has also changed how people entertain themselves. An increasing number of consumers have been turning to online entertainment to fill their free time. A Deloitte survey showed that 38% of consumers tried a new form of digital entertainment such as online video streaming services and video games. More than two-thirds of the respondents said they would continue to use these services even as the crisis subsides. There has also been a rise in the number of paid online subscription services since Covid-19. Video games are the big winners during the pandemic.

Most live entertainment venues and events have temporarily stopped operations, with no clear timelines for re-opening in sight. Even so, for entertainment activities that have reopened — most notably sports — they take place in a bubble-like environment with stringent testing measures and, more importantly, with the absence of any fans and unrelated personnel. Even as live entertainment eventually resumes after the development of a vaccine, RHB Wealth Research believes it would take a significant amount of time before crowd attendance returns to pre-Covid-19 levels.

Necessity is the mother of invention and, in just over six months, Covid-19 has already drastically changed the way we work, live and play. Still, even as the spread of the virus is eventually contained and stringent lockdown measures are relaxed, the world as we knew it may never be the same again. While this post-Covid-19 “new normal” may seem confusing or even intimidating at first, however, we believe investors can gain renewed confidence as they better their understanding of the key investment themes in this “new normal”. These key investment themes include China as a longer-term structural growth story, and the technology, internet and healthcare sectors that will benefit in this “new normal”. Of course, not all new science and technologies will succeed. To be a well-positioned investor, careful stock selection is critical and should be based on a good understanding of the industry, including its opportunities and threats.

To practise the finer points of investing, work closely with your RHB Relationship Manager to design a plan to tap this opportunity through solutions such as RHB Big Cap China Enterprise Fund, RHB Shariah China Focus Fund and RHB Global Artificial Intelligence Fund, which invest in assets focused on new science, technologies and healthcare based on your risk-return appetite, whether it is for long-term capital appreciation or for short-term gains. - By RHB Wealth Research