BROWSING online during lockdown, Jessica Friend spotted a pair of Ray-Ban sunglasses she liked, but the price tag made the 30-year-old Ohio resident think twice.

What persuaded her to click “buy,” Ms. Friend said, was the short-term credit offered by Afterpay, which split the $260 payment into four interest-free instalments.

Afterpay is among a handful of alternative credit firms which offer small loans, mostly to online shoppers, and make their money by charging merchants a 4%-6% commission.

These buy-now-pay-later (BNPL) firms have benefited from a shift to online shopping during the coronavirus crisis in countries including the United States, where state aid has also boosted retail sales.

“I’m more inclined to use them because they make it easier to afford to get the things I want all at once … and when I want to splurge on something,” Ms. Friend said of the loans.

Some investors are now betting shoppers will stay away from stores as coronavirus cases rise again in several countries around the world, boosting business for BNPL firms.

But swelling subscriber numbers may also increase bad loans, mainly among first-time users who are more likely to default.

And as job losses rise and government aid ebbs, the business model will face its first real test in a recession.

“Much still hinges on any virus second waves and government wherewithal to keep boosting demand,” said Andrew Mitchell of Ophir Asset Management which owns shares in Melbourne-based Afterpay, whose market value has risen to $12.55 billion from over $100 million four years ago.

While a move to online shopping was underway before the pandemic, the shift has accelerated under lockdown and Afterpay signed up more than a million new active US customers between March and early May, taking its overall base there to 9 million.

Meanwhile retailers desperate to move merchandise have also become more receptive to partnerships with BNPL firms, which unlike credit cards or mortgages, make loans instantly.

Klarna, Europe’s biggest fintech startup, said that since March enquiries from retailers who may want to partner with it jumped by 20% on average globally.

With 7.9 million US subscribers, Sweden’s Klarna has since signed up outdoor gearmaker The North Face, Disney’s streaming service and cosmetics retailer Sephora.

Most of the growth has been in higher-margin discretionary spend categories such as fashion and fitness gear, said Puneet Dikshit, a McKinsey partner in New York, who expects the sector to generate $7 billion to $8 billion in volumes this year in the United States, growing by more than 150% annually. — Reuters

ACCUSTOMED to crunch time and performing in a crisis, the world’s supply chain managers are having something of an extended moment in pandemic recovery mode.

Procurement experts were center stage in the rush to secure alternative sources of household essentials, medical gear, raw materials and components to keep factories running when COVID-19 first struck. Now chief executive officers are looking to those same managers for more strategic vision and ways to shock-proof supply chains for corporate survival.

From automakers to food processors, manufacturers that have relied on a strategy of low-cost supplies and minimum inventories are rethinking such an approach given the combination of the pandemic, trade conflicts and harsher natural disasters.

The buzzwords now are flexibility and resilience.

“This whole part of the equation has a higher prominence,” Alexander Lacik, CEO of Danish jeweler Pandora Group with about 7,400 outlets, said in an interview. The chief supply chain officer “is not someone I speak to just once a month,” he said.

When the coronavirus hit, it took some companies three to four weeks to understand the ripple effect on areas like procurement and logistics.

Those firms are now in the rebuilding phase, with one eye on what digital tools and other technology they need to stay on top when the next crisis comes, according to Kristian Park, a risk advisory partner at Deloitte in London.

“There’s been a 50% increase in people coming forward who have realized they didn’t have the information they needed,” Mr. Park said. “As always with these things, it takes one seismic shift to change people’s perception of the risks.”

That’s the sweet spot of a chief supply chain officer, who is typically more comfortable with a broad focus spanning procurement, logistics, strategic alliances and managing costs, Mr. Park said.

Recent studies support a move to introduce more flexibility. Companies with a resilient supply network grow faster because they better adapt to shifts in demand, potentially boosting their order rate by as much as 40% and customer satisfaction by up to 30%, according to a study by Bain & Co.

Making its own jewelry in Thailand and owning shops across 100 countries means Pandora’s Chief Supply Officer Jeerasage Puranasamriddhi has greater control. Yet the company still relies on air freight and some 200 suppliers. As the pandemic snowballed, the company’s initial response was to push more inventory to its shop premises in case one of the large centralized warehouse facilities went down, Mr. Lacik said.

Mr. Lacik is now reviewing his company’s set-up, from procurement of materials to surging online sales. Where possible, having a single source for an input will be avoided and backup plans put in place. Online sales are up as much as 300% currently, leading the Danish company to rethink its e-commerce strategy, and whether it could manage online sales internally rather than rely on a third party. It may also look at factories outside of Thailand, Mr. Lacik said.

Two decades ago less than 10% of companies had a supply chain director, according to Jan Godsell, a professor of operations and supply chain strategy at the University of Warwick. The number now is closer to 50%, with the role of a chief supply chain officer becoming more common in the past five years.

They’re ascending the corporate ladder even more in the post-pandemic world, she said.

“COVID-19 may have been a wake-up call to main boards of the importance of supply chains and hopefully it will accelerate the rise of the chief supply chain officer,” Mr. Godsell said.

The median salary for a supply-chain manager was about $78,507 a year for those with a bachelor’s degree and $95,750 with a graduate degree or higher, according to the Association for Supply Chain Management’s 2020 annual survey. The poll generated about 2,500 responses through Jan. 31.

At large global companies, the top positions can pay $300,000 to $400,000.

But even before the health crisis, there were chronic shortages of workers to fill the positions — about one applicant for every six openings, says Abe Eshkenazi, CEO of the Chicago-based association.

As the jobs become a bigger part of a company’s strategic management team, he says more lucrative salaries will follow. “The demand for talent is going to be significant on the backside of this,” Mr. Eshkenazi says. “We’re seeing skills and expectations for supply chains increase exponentially.”

All the sudden interest hasn’t gone unnoticed among students facing a brutal job market. Haslam College of Business, part of the University of Tennessee in Knoxville, is among colleges offering supply chain studies that are seeing a flurry of inquiries from students and workers looking for a new career, according to George Drinnon, executive director of undergraduate programs. “This awareness is translating into more attention to the field,” he said.

Another anecdotal sign of the profession’s popularity: 6,000 registered attendees from 109 countries for a July 16-18 virtual conference titled “Preparing for the Recovery After Covid-19” and hosted by Alcott Global, an executive search firm specializing in e-commerce, logistics and supply chain executives.

Speakers include the supply chain bosses from companies including Swedish appliance maker Electrolux AB, US tool maker Stanley Black & Decker Inc. and Beiersdorf AG, the German maker of Nivea skin-care products. The Singapore-based recruiter sold out of sponsorships for the event in 10 days.

“We are seeing huge interest,” said Radu Palamariu, Alcott’s managing director for Asia-Pacific. — Bloomberg

GETTING PRODUCTS from one place to another with as little human contact as possible is becoming an imperative for businesses as retailers, warehouses and transport providers adapt to the coronavirus pandemic, seeking to minimize the risk of infections to their employees and customers.

Tsubakimoto Chain Co. is seeing more demand for its sorting and conveyor systems as companies seek ways to move things around, while startup Hacobu sees an opportunity to boost use of its online platform for trucks to exchange information as they load and unload goods at warehouses, a process that’s still mostly done on paper.

The need for automation is especially acute in Japan, where a labor shortage was already putting pressure on companies to find ways to run their businesses with fewer people. Now, that transition is being spurred on by the pandemic, which has boosted online buying and raised concerns among shoppers about being infected by items delivered to their doors. All told, the market for next-generation logistics systems in Japan is set to more than double to 651 billion yen ($6 billion) through 2025 from 2018, according to researcher Fuji Keizai.

“Demand for humanless systems will keep growing,” Masafumi Okamoto, division manager at Osaka-based Tsubakimoto, said in an e-mail. More families are turning to electronic commerce to buy household goods, and the manufacturer is getting more inquiries for its automated equipment, he said.

Daifuku Co., an 83-year-old company that makes and sells material-handling equipment, has seen its shares climb. Its market capitalization topped 1 trillion yen in mid-May.

“Daifuku will lead the way to a new normal in the post-COVID era,” said Toshiharu Morita, an analyst at SBI Securities. “Its visibility for mid- and long-term growth is high,” he said, adding that Daifuku is one of the top global players in the industry with its solid technology.

Above Robotics, a San Francisco-based startup, offers services to stitch together various autonomous logistics and transportation systems. Its cloud-based software can get shipping companies, warehouses and driverless vehicles to communicate directly and handle goods with fewer humans in between. Above Robotics has had inquiries from companies in Japan, South Korea and other parts of Asia, according to Dirk Beth, a director at the company.

“We’re certainly seeing an acceleration of interest because of COVID,” Mr. Beth said. “I don’t think that’s going to slow down even if the COVID situation is solved today, because now what companies are thinking is, ‘when is the next time this is going to happen and people can’t go to work? How do we make sure that our goods get to the end customer?’”

Hacobu, the logistics-data company, teamed up with Hino Motors Ltd. in May to solve issues such as a shortage of drivers. Japan has had a chronic insufficiency of drivers, with 85% of companies surveyed by the Japan Truck Association saying they didn’t have enough, according to a 2019 poll.

There are still a lot of areas where humans are needed in logistics facilities. If the number of staff in warehouses is restricted to prevent transmission of the COVID-19 pathogen, that could limit shipments and turn into lost sales opportunities, according to Takeshi Kitaura, an analyst at Bloomberg Intelligence.

“The incentives for automation have gone up,” Mr. Kitaura said. He predicts that many providers of automation machines will see a drop in demand from automakers as the pandemic depresses sales of automobiles across the globe, and that the transport and logistics sector could make up for that decline.

Japan’s bigger retailers are also looking to automate their operations. Rakuten, Inc. Chief Executive Officer Hiroshi Mikitani said in May that his online marketplace is automating its logistics and installing new machines to reduce manual labor. Tadashi Yanai of Fast Retailing Co. also said the maker of Uniqlo clothing is actively investing in logistics and its supply chain.

Mujin, Inc., a company that makes industrial robot controllers, said there’s booming interest for its solutions. Logistics automation is now seen as a way to prepare for emergency, said spokeswoman Yuzuki Ishihara.

Hisashi Taniguchi, CEO of ZMP, Inc., which makes driverless carts and forklifts for warehouses, said the number of clients using its machines to support logistics will increase by 150 to 200 this year. ZMP is now planning to list on the Tokyo Stock Exchange, after postponing it in 2016.

Japan’s government is also behind the push into logistics automation. The country needs to embrace the use of data and artificial intelligence in managing truck fleets, autonomous vehicles and drones to be more competitive globally, the Ministry of Land, Infrastructure, Transport and Tourism said in a policy paper. For example, the agency called for the use of drones in less populated, mountainous areas.

“The big challenge for us is regulations, which are different all over the world” for new technology such as drones, said Mr. Beth of Above Robotics. — Bloomberg

WHOEVER said “an apple a day keeps the doctor away” didn’t have a computer in mind. But with more Americans staying away from doctors’ offices because of COVID-19 (coronavirus disease 2019), the use of telehealth has been surging.

In the early stages of the pandemic, healthcare systems prioritized urgent medical issues and delayed optional care, leading to a 60% drop in outpatient visits in April.

Simultaneously, telemedicine visits surged by as much as 14%, according to data from Harvard University and Phreesia, a healthcare software company.

The move toward doing more health care online has helped squeeze the finances of many physician practices. Research from Health Affairs shows that US primary care offices could lose $15.1 billion in revenue this year due to COVID-19. While telehealth keeps medical practices working, it is generally not as lucrative — reimbursement rates from insurers are typically lower for online appointments.

While the US continues to thrust itself into reopening, in-person visits have begun to rise. Still, business remains slow, and telehealth is still being used more often than it ever was in the past.

But how accessible is telehealth for people who don’t have access to a stable internet connection, computers, or the ability to fix technology snags when they arise? For all its benefits in a pandemic, practicing medicine over the internet has pitfalls. — Bloomberg

NEW YORK — US property and casualty insurers have cast the coronavirus pandemic as an unprecedented event whose massive cost to small businesses they are neither able nor required to cover.

The industry has warned it could cost them $255 billion to $431 billion a month if they are required, as some states are proposing, to compensate firms for income lost and expenses owed due to virus-led shutdowns, an amount it says would make insurers insolvent.

The estimate, made by the American Property Casualty Insurance Association (APCIA), a trade group, was recently used by the industry to successfully lobby against state and city lawmakers’ efforts to legislate to make the sector pay.

Insurers say business interruption policies only apply when actual physical property damage prevents a business from operating and any attempt to apply cover beyond that, for a pandemic, are unconstitutional.

The stance has discouraged some policyholders from filing claims and prompted others to take legal action.

A Reuters examination of APCIA’s estimate, however, suggests the possible bill may not be so onerous.

The APCIA estimate is an industry worst-case scenario based on all small firms with business interruption coverage being able to claim. It also assumes that between 60% and 90% of businesses with fewer than 100 employees will be impacted by COVID-19 (coronavirus disease 2019).

Only about 40% of small firms have business interruption coverage, according to the Insurance Information Institute, and most of the policies explicitly exclude pandemics, according to Tyler Leverty and Lawrence Powell, professors who specialize in insurance at the University of Wisconsin and the University of Alabama, respectively.

Powell has estimated that insurers could be on the hook for a maximum of $120 billion a month in claims on the basis that half of small firms have business interruption insurance.

Leverty said that if the estimate counted only businesses without explicit exclusions for pandemics, “it would be in the millions per month.”

The APCIA said it stood by its numbers, which it said reflect the unique and widespread impact of the virus. It declined to comment on Powell’s analysis.

“Yes, these are eye-popping figures,” APCIA Chief Executive David Sampson told Reuters, referring to the association’s estimate. “This pandemic is unprecedented in its scale, reach, and economic impact.”

NOT CLEAR-CUT
New Jersey’s business interruption bill, a model for others, is stalled while Roy Freiman, the lawmaker who introduced it, waits for an alternative plan from the industry.

“I said, ‘Look, we don’t want insolvency, but surely there is some place between 100% denial and insolvency that you can operate within,’” Freiman told Reuters.

The city council in Washington, DC shelved a similar plan in early May after “pretty intense” lobbying, Council Member Charles Allen, a supporter, told Reuters. APCIA’s cost estimate was cited in council discussions along with an association white paper describing the plan as unconstitutional.

Chairman Phil Mendelson, who introduced the plan, withdrew it after members voiced fears of a lengthy court fight and insurer insolvency.

“Obviously, our concerns were heard,” Sampson told Reuters at the time.

Trade groups say the industry’s stance has deterred many claims.

“Businesses are being told if you file they will probably deny you,” Andrew Rigie, executive director of the New York City Hospitality Alliance, which represents 2,500 bars and restaurants in New York City, told Reuters.

“We’re telling them to seek counsel and be on record filing claims.”

That’s not an option for George Sizemore, owner of Bit of England Darts & Games Shoppe in Virginia Beach.

Sizemore’s insurance agent told him it would be pointless to claim for the $40,000 in revenue he said he lost while his store was shut because his policy does not cover pandemics.

“The only way I could file a claim would be to have a lawyer,” said Sizemore. “I just don’t have the money.”

There are currently dozens of lawsuits in US courts seeking compensation on behalf of small businesses for lost earnings due to the pandemic.

Legal experts said that while many policies exclude pandemics, some do not and there is precedent for courts requiring insurers to pay for physical loss without physical damage, such as when pollution or asbestos make property uninhabitable.

“It’s not anywhere near as clear-cut as the industry says,” said John Ellison, a partner at Reed Smith who has represented policyholders for three decades. — Reuters

INDIA has set an ambitious timeline for its first potential coronavirus vaccine — from human trials to general use in six weeks.

Bharat Biotech International Ltd., an unlisted Indian vaccine maker, received regulatory approval to start human clinical trials for its experimental shot in early July and it already has India’s apex medical research body expediting the process.

The under-development vaccine is “envisaged” to be rolled out “for public health use by Aug. 15 after completion of all clinical trials,” the Indian Council of Medical Research, or ICMR, said in a July 2 letter to clinical trial sites, which was seen by Bloomberg News. It “is one of the top priority projects which is being monitored at the topmost level of the government.”

There’s been no evidence yet that Bharat Biotech’s vaccine is safe for use on humans, not to mention effective. The envisioned timeline is markedly shorter than other front-runner vaccine efforts from American and Chinese drugmakers, most of which started human clinical trials months ago and are now entering the last of three stages of testing.

The bid underscores India’s urgent need for a way to halt the coronavirus. In its letter, ICMR urged the trial sites to enroll volunteers by July 7.

The speediness has alarmed some in the medical fraternity. “Such an accelerated development pathway has not been done EVER for any kind of vaccine, even the ones being tried out in other countries,” Anant Bhan, a medical researcher at India’s Manipal University, said in a Twitter post. “Even with accelerated timelines, this seems rushed and hence, with potential risks.”

After abandoning a costly lockdown that caused tremendous economic suffering without slowing the virus’s spread, Prime Minister Narendra Modi’s government is anxious to project control over the outbreak.

The Aug. 15 deadline for Bharat Biotech’s vaccine may reflect that political pressure: that’s the day India celebrates independence from the British, marked by a nationwide address by Modi.

The letter to investigators of clinical trial sites was meant to cut unnecessary red tape, without bypassing any necessary process, and to speed up recruitment of participants, the ICMR said in a statement.

“ICMR’s process is exactly in accordance with the globally accepted norms to fast-track the vaccine development for diseases of pandemic potential wherein human and animal trials can continue in parallel,” according to the statement. “Our trials will be done following the best practices and rigour, and will be reviewed, as required.”

Bharat Biotech plans to enroll 375 people in the first phase of clinical trials and 750 people in the second phase, an ICMR spokesperson said. Whether the vaccine will be approved for general use depends on the outcomes of those trials, he said. A spokeswoman for Bharat Biotech declined to comment on the Aug. 15 timeline in ICMR’s letter.

“They can’t do that,” said Jayaprakash Muliyil, chairman of the Scientific Advisory Committee in National Institute of Epidemiology, referring to the targeted timeline of the vaccine launch. Developing a vaccine is a complicated procedure that involves proving its effectiveness and safety, he said.

While Bharat Biotech’s timeline is ambitious compared to other efforts, India’s mature medical manufacturing sector and its large population, from which human trial volunteers can be easily found, are factors that could help accelerate the usual vaccine development process.

C. Prabhakar Reddy, a professor in Hyderabad’s Nizam’s Institute of Medical Sciences, one of the trial sites that received ICMR’s letter, said: “We are all working day and night to meet the deadline but still it will be neck and neck race,” he said, adding that he doesn’t anticipate any shortage of volunteers “in the current scenario.”

A vaccine ready for public use will allow the safe reopening of schools, offices and factories to revive India’s economy, which is hurtling toward its first contraction in more than four decades. It will also tie in with self-reliance — a motto Modi has repeated often in recent weeks.

Developing nations are eager to pare their dependence on other nations and foreign drugmakers in securing vaccines. Called Covaxin, the “inactivated vaccine” candidate has demonstrated safety and immune response in preclinical studies, Bharat Biotech said in a June 29 statement that cited the firm’s “track record in developing vero cell culture platform technologies.”

It has developed vaccines against polio, rotavirus, Japanese encephalitis and Zika, according to the statement.

Bharat Biotech “is working expeditiously to meet the target, however, final outcome will depend on the cooperation of all the clinical trial sites involved in the project,” the ICMR letter said. — Bloomberg