Zoom revenue soared 326% in 2020. Can it stay ahead this year? –


  • in 2020, Zoom recorded a quadrupled revenue of US$2.65 billion.
  • Its fourth-quarter revenue alone soared by 369%.
  • The video conferencing company’s revenue this year is expected to rise more than 41% to between US$900 million and US$905 million.

Being the perfect product available at the idea time, 2020 was indeed a banner year for Zoom Video Communications Inc. The pandemic-influenced gains made Zoom a household name among users and investors, pushing its revenue up by four-fold to US$2.65 billion in the fiscal year ended in January. Assuming that working from home is no longer a staple for millions of people towards the end of 2020 as to how it was at the beginning of the Covid-19 pandemic, Zoom’s revenue still soared by 369% in the last quarter to US$882.5 million, bigger than the entire financial year of 2020. As a result, its market cap increased five-fold to US$100 billion.

However, worries about what Zoom’s business will look like once the pandemic ebbs are still hanging over the company of late. While the pandemic has made for trying business circumstances, Zoom Chief Executive Eric Yuan said it has made it “one of the most popular apps of the year”. He also said the fourth quarter marked a strong finish to an unprecedented year for Zoom. “As the world emerges from the pandemic, our work has only begun,” he added.

The company’s customer base also increased that too by 470% YoY to 467,100 on the back of more than 10 employees. Of those, 1,644 contributed more than US$100,000 in trailing 12 months revenue, up 156%. It also reported a trailing 12-month net dollar expansion rate in customers with more than 10 employees of 130%. Overall, these customers accounted for about 80% of its incremental revenue, up from 59% one year ago. 

How will 2021 fare for Zoom?

The nine-year-old company has become synonymous with video conferencing during the pandemic and despite the talks surrounding ‘Zoom fatigue’, Covid-19 is continuing to spread and traditional office life is still on hold for many.

Zoom is expecting sales to rise more than 40% this year, reaching more than US$3.7 billion and although it did not expect growth to continue at the pace it enjoyed last year, the company said so far business remains strong. The company also expects the shift to continue well into 2021 with revenue in the first three months of this year is expected to be between US$900 million and US$905 million, well above analysts’ estimates.

On where the future growth will come from, Zoom stressed the potential of its two-year-old Zoom Phone product, which is a simple and straightforward cloud-calling service without video calls. It was pointed out that Zoom Phone was the company’s fastest-growing product on a quarter-over-quarter basis in Q4. They said it ended the year with 10,700 Zoom Phone customers with more than 10 employees, up 269% YoY.

The company may also have other options to grow its business though, as it’s rumored to be trying to expand its presence in the overall productivity market such as a web-based email service to compete with Gmail and Outlook, as well as a Calendar service. The company may also be able to extract some revenue from a new product called OnZoom that debuted in October.

Hargreaves Lansdown analyst Susannah Street said, Zoom’s fate would depend on how it manages to compete against firms such as Microsoft and Google, which have introduced similar features. “Although it stole an early march on other players in the first few months of the crisis, it does now have much stiffer competition from the likes of Microsoft and Google who have significantly upped their game,” she wrote in a research note.

“It may be that we have become so used to pandemic habits that we will stick with our virtual social lives, particularly for long-distance friendships and work relationships. But just how large a slice of the live video pie Zoom manages to hang on to will depend on how it matches up to its powerful rivals,” she added.

 



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Interest Rates Have Soared. That Could Put a Dent in Stocks Soon.


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Tycoon Who Soared On China’s Tech Dreams Grounded By Regulators


Jack Ma, the ebullient and unconventional billionaire founder of tech giant Alibaba and the totem of China’s entrepreneurial brilliance, now finds himself up against a Communist leadership seemingly intent on hacking back his empire and issuing a lesson that no one is bigger than the party.

Ma, the most recognisable face in Asian business with a fortune estimated at around $58 billion, has already faced the ignominy of having the world’s biggest-ever IPO spiked by Chinese regulators days before its launch.

The November share sale was set to see his wealth bulge to more than $70 billion in a record-breaking listing of the group’s Ant Group financial arm in Hong Kong and Shanghai.

But Chinese regulators abruptly pulled the deal, over what initially appeared to be concerns about the company’s reach into the finances of hundreds of millions of Chinese people.

It was a brutal public rebuke to Ma, who was then called in for dressing down by regulators and has since evaporated from the spotlight he normally so ably commands.

Now China’s poster boy for enterprise finds himself again caught in the glare of the Communist-run state, with Thursday’s announcement of an anti-monopoly probe into Alibaba, the tech giant he founded, and the summoning of Ant Group by regulators.

It is another public relations catastrophe for Ma, a Communist Party member, whose rags-to-riches backstory has come to embody a self-confident generation of Chinese entrepreneurs ready to shake up the world.

Charismatic, diminutive and fast-talking, Ma was cash-strapped and working as an English teacher when someone showed him the internet on a 1990s trip to the United States — and he was hooked.

He toyed with several internet-related projects, before convincing a group of friends to give him $60,000 to start a new business in 1999 in China, then still emerging as an economic giant.

Alibaba was the result, an e-commerce empire founded from his bedroom in Hangzhou and which started an online shopping revolution and grew into a fintech titan.

The company changed the shopping habits of hundreds of millions of Chinese people, and catapulted Ma into the global limelight.

“The first time I used the internet, I touched on the keyboard and I find ‘well, this is something I believe, it is something that is going to change the world and change China’,” Ma once told CNN.

In 2014, Alibaba listed in New York in a world-record $25 billion offering.





Jack Ma’s rags-to-riches backstory has come to embody a self-confident generation of Chinese entrepreneurs ready to shake up the world
 AFP / STR

Ant Group, in which Ma is the largest shareholder, is now the world-largest digital payments platform, claiming 731 million monthly users on the Alipay app.

But there are fears it reaches too deeply into the pockets of ordinary Chinese with its micro-loans, investment and insurance products.

Ma long enjoyed an image as the benevolent and unconventional billionaire.

Sometimes referred to in China as “Father Ma”, he is praised for his self-deprecation — he recounts being rejected by Harvard “10 times” — and a knack for lighting up company events with song-and-dance appearances as Lady Gaga, Snow White and Michael Jackson.

As his fortune grew, Ma rebranded as a philanthropist — in 2019 retiring from the business to focus on giving.

But even his charitable work betrays an idiosyncratic touch.

After footage of a little boy in a village in central China who looked like Ma went viral, the businessman promised to pay for him to go through university.

But that reputation may be in the balance with the regulatory slap-down playing into a growing sense shared on China’s Twitter-like Weibo that he has leaned into hubris by criticising fintech regulators.

He has faced his share of travails over the years in a country where getting rich risks catching the attention of the powerful.

Eyebrows were raised when the state-run People’s Daily revealed that he is a member of the Communist Party — something Ma has never fully commented on.

He had previously indicated that he preferred to keep the state at arm’s length, telling the World Economic Forum in 2007: “My philosophy is to be in love with the government, but never marry them.”

But perhaps the biggest challenges remain ahead, as the size and scale of his business mean that relationship may need to be renegotiated.





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As Australians stocked up for COVID-19, the price of some fridges and freezers soared


Consumer advocacy group Choice has found the price of some whitegoods, such as freezers and fridges, soared as Australians stocked up on food at the height of the coronavirus pandemic.

According to the research, the price of a Westinghouse chest freezer at Billy Guyatts went up by 63 per cent — from $916 in October 2019 to $1,490 March 2020.

At other stores, a small Esatto freezer went from $327 last year to $499 at Appliances Online in February this year, and a Siemens freezer rose from $2,085 in October to $2,850 at Winnings Appliances in March.

The prices were set by individual retailers and not by the products’ wholesalers.

Amy Pereira from Choice said the demand for freezers and fridges increased as consumers rushed to supermarkets amid confusion over potential lockdowns.

“As a result, we did see that some businesses responded to this by hiking their prices.”

But one of the owners of retailer Billy Guyatts, Mark Caval said the company did not hike its prices because of the pandemic.

“Billy Guyatts is a small family-run business,” he said.

“We did not increase our prices in response to the pandemic lockdown, because we did not know there was going to be a lockdown.

“Our pricing is dynamic and changes daily according to supply in the market, and what our competitors are offering.”

But Ms Pereira said the group had spoken to supply chain experts who could not justify why prices had risen so high.

“It’s vital that we look at what happened during this crisis and put protections in place to make sure Australians don’t get exploited again — whether that be through price gouging or panic marketing,” she said.

The Winning Group said prices at Appliances Online and Winning Appliances were not set manually, but determined by an algorithm.

In a statement, the chief executive of Winning Group, John Winning, said none of the factors that influenced pricing, such as manufacturing costs or exchange rates, had changed during the pandemic.

He rejected any allegation the companies increased their prices in response to the situation.

“We have not engaged in any form of price gouging and any suggestion that we had would be incorrect,” he said.

‘Essential prices did rise’

In March, as the pandemic intensified, supermarket shelves were emptied of essentials as shoppers stocked up.

The situation got so bad that Australia’s competition watchdog, the ACCC, decided to allow supermarkets to work together to ensure shoppers could access food items at a fair price.

A survey of 1,000 people conducted by the consumer advocacy group from March 20 to March 29, also found at least one in three Australians faced price hikes for essential products.

“We saw across the board that prices for essential goods did rise,” she said.

“We were particularly concerned … about the price rises for personal protective equipment like facemasks, hand sanitizer, soap and other essential items like toilet paper.”

Supermarkets were cleared of products like toilet paper and paper towels due to coronavirus stockpiling in March.(ABC News: Freya Michie)

Products like toilet paper were in such high demand in March that physical altercations broke out in aisles as supermarkets imposed limits per customer.

In Western Australia, 45 per cent of respondents reported higher prices during that period, with 44 per cent reporting the same in the Northern Territory, South Australia, the Australian Capital Territory and Tasmania.

“There are explanations like supply chains or shortages but we’re really concerned about those instances where it can’t be explained, where there is no reasonable explanation for increasing the prices exponentially,” she said.

A map of Australia with percentages - 45 per cent in WA. 44 per cent in NT, SA, Tas and ACT. 40 in Qld, 38 in NSW and 37 in Vic.
A map of Australia showing the percentage of survey respondents who reported price hikes in March this year.(Supplied: Choice)

The group is calling on states to review and strengthen consumer protection laws in light of the findings.

“Choice has investigated business behaviour over this period and we’ve seen some inexcusable opportunism, panic marketing and price gouging from retailers across the country.”



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