London Daily

Focus on the big picture.
Thursday, Jul 31, 2025

Online services leading growth economy

Unknown and unnamed a few months ago, Covid-19 has since upended much of the world economy and dictated a new set of norms for everyday life. People have had to adapt to the realities of working and studying from home, while social distancing rules have brought a major shift in consumer behaviour, spending patterns and general outlook.
The result is that online services have come of age. Necessity, combined with technology and convenience, has been the driver. And though some resetting is likely as the pandemic winds down, it is clear a new ecosystem is taking shape and, overall, there is no turning back.

“In terms of changes, this is very significant,” says Edmond Huang, managing director, head of Hong Kong/China research and head of China equity strategy at leading investment bank Credit Suisse. “Online services are growing fast. It’s not only e-commerce and delivery; online education and entertainment are also much more important than before. The virus outbreak has been a wake-up call for many businesses and investors. But the corporate world should be confident about developments and ready to throw more resources into this area.”

At one level, Huang notes, investment is needed in data centres, AI and 5G networks to improve connectivity and provide the infrastructure to support growth. At another, executives should be finding ways to give traditional offline businesses an online presence to avoid missing out on the opportunities available.

“All of a sudden, people in sectors which have taken a hit from this trend can see it’s a question of survival, not just a matter of cash flow,” Huang says. “Everything will not just be ‘back to normal’ when the virus is over. The wider impact is huge.”

As an example, he notes that online sportswear sales are now recovering, but offline they continue to struggle. That is a clear enough sign: businesses must adjust to meet changing consumer demand. And investors should be alert to the knock-on effects – positive or negative – in related sectors and the broader economy.

For instance, there are easily foreseeable consequences for retail facilities, rental rates and renewals. The switch to online meetings and more working from home is sure to affect the office sector, with implications too for the wider property market. And, as users lean more towards online delivery of education, entertainment, health care and medical services, there will be a further shift in needs for advanced IT infrastructure, apps, capital, and specialist employees with relevant skills.

With any luck, that will spur all kinds of innovation, start-ups and a surge in economic growth. However, such a scenario also raises a number of questions, not least about data privacy, effective regulation, tax liabilities, and the risks of control and influence being exercised by just a few dominant players.

“In a capitalist system, big companies want to get bigger and more powerful,” says Huang, who doubles as head of China equity strategy for Credit Suisse. “And people now want to invest in the market leaders in e-commerce because they deliver strong results. But when such companies grow to a certain scale, it becomes a global issue. Society will raise questions on what these companies give back and look at how to find a balance.”

Huang does not claim to have all the answers. But with online services and the internet economy set for further rapid expansion, he wouldn’t be surprised to see tighter regulation and antitrust initiatives. The best-known names may talk about the interests of stakeholders and bringing benefits to all. However, more stakeholders need to be consulted in order to facilitate such a concerted move.

“We will see more regulation and, hopefully, more balance between growth and responsibility towards society,” he says. “You cannot stop the overall trend, but Europe, for instance, will argue that big companies have to pay more tax and that some people are not exactly benefiting. You need to share the growth more fairly.”

In general, though, such issues are unlikely to deter local investors. Instead, judging by recent events, they will be lining up to back “new economy” listings and looking to cash in on any float helped by current stimulus plans or excess liquidity.

“From the regulatory point of view, Hong Kong and Shanghai are very much ready to welcome these companies for listing, hoping this will trigger a virtuous circle,” Huang says. “The weighting of the Hang Seng Index is still too much towards old economy stocks. You will see a move to the growth economy of e-commerce, online education and biotech. It is the same for the Shanghai index which has pretty much been banks, commodities and industrials. In the next five to 10 years, the trend will be from physical to online. People in Hong Kong were ready to invest in physical assets and earn 5 per cent a year, but they now see the game changers.”
Newsletter

Related Articles

0:00
0:00
Close
Former Judge Charged After Drunk Driving Crash Kills Comedian in Brazil
Jeff Bezos hasn’t paid a dollar in taxes for decades. He makes billions and pays $0 in taxes, LEGALLY
China Increases Use of Exit Bans Amid Rising U.S. Tensions
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Procter & Gamble to Raise U.S. Prices to Offset One‑Billion‑Dollar Tariff Cost
House Republicans Move to Defund OECD Over Global Tax Dispute
Botswana Seeks Controlling Stake in De Beers as Anglo American Prepares Exit
Trump Administration Proposes Repeal of Obama‑Era Endangerment Finding, Dismantling Regulatory Basis for CO₂ Emissions Limits
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
A family has been arrested in the UK for displaying the British flag
Mel Gibson refuses to work with Robert De Niro, saying, "Keep that woke clown away from me."
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
The British propaganda channel BBC News lies again.
Deputy attorney general's second day of meeting with Ghislaine Maxwell has concluded
Controversial March in Switzerland Features Men Dressed in Nazi Uniforms
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
Thai Civilian Death Toll Rises to 12 in Cambodian Cross-Border Attacks
TSUNAMI: Trump Just Crossed the Rubicon—And There’s No Turning Back
Over 120 Criminal Cases Dismissed in Boston Amid Public Defender Shortage
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
Trump Announces $550 Billion Japanese Investment and New Trade Agreements with Indonesia and the Philippines
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
×