Demand for Proxies Falls During Coronavirus Crisis

The mood among the proxy providers I know is pretty gloomy at the moment.  Many of them where rather hoping that with everyone shut inside at their computers, there would be a boost in demand for proxies, VPNs and other associated technologies.  It always seemed rather optimistic to me and the reality has indeed been very different.  From the larger providers to the smaller, specialized companies – demand it seems has fallen through the floor.  One business owner told me that his business has virtually disappeared overnight and he’s very frightened that it might never re-appear.

Of course, it was always rather hopeful to think that the proxy market would be unaffected.  After all so much of the market is linked either directly or indirectly to consumer demand in other markets.  Most of the providers I know supply proxies for lots of different purposes yet the virus crisis has virtually eradicated these markets too.    Let’s look at some of these markets and see how Covid-19 is likely to affect the demand for associated proxies.

Is it Bonanza Time for Sneaker Proxies ?

This market was one of the areas that people were hopeful might not be impacted to a large extent.  In fact one sneaker head acquaintance of mine was expecting it to be a highly profitable period.  The reality again is quite different, for several reasons but the key one is that demand for high value sneakers has dropped.  It’s actually not surprising, and any economist would be able to predict this consumer behavior very easily.  Demand for high cost, luxury items will always fall in times of economic uncertainty.  Covid-19 has provided the biggest economic shock in living memory and the sad truth is that many people will lose their jobs and livelihoods.

The economy of every country in the world has been hit extremely hard, and the shock has hit the developed world hard too.  The European powerhouse of Germany has announced a 2% fall in the first quarter (remember the full impact won’t be felt until the second quarter results). While in the USA there are now over 36 million people registering as unemployed, over 40% of low income families have lost at least one breadwinner.

These are incredible figures, and it’s not hard to see why $300 pairs of sneakers are not exactly on people’s shopping lists.  Demand and prices for ostentatious items like these has fallen sharply.  Plus retail outlets have of course been largely closed, so those great high traffic drops aren’t taking place.  The manufacturers have responded unsurprisingly by simply pulling back from the market, there’s little point spending money on marketing and building hype for products that are simply not in demand at the moment.  All this is very bad news for sneaker proxy providers who service the sneaker market, who rely on huge demand and lots of competitive drops.

The after sale market is still operating reasonably well, but obviously you don’t really need proxies for this.  Prices have fallen though and presumably will fall further as people seek to raise revenue from those prized sneakers.  Possibly a great buying opportunity, but this relies on our world returning to it’s pre-covid reality which doesn’t look likely anytime soon.

Ticketing and Event Proxies

This was easier to call than the sneakers, obviously concert and any sorts of mass events are pretty much all gone at the moment.   There seems to be a little bit of denial going on in some of these markets but let’s face it who’s going to spend a few hundred dollars now on an event which very likely will be cancelled.  If you visit the Ticketmaster sites there’s very little mention of cancellations or Covid information on the front pages.  However there’s no major events available in the UK before August and only a few still remaining in July. Whether this remains the same is of course subject to speculation but when your main product disappears then it’s not going to be good for business.

There’s likely to be huge pent up demand for these sorts of areas though, so potentially profitable times might be around the corner.  All the youngsters I know will be rushing out to buy tickets for anything much available when the lock down is up, those who can afford them of course.  Many companies also focus largely on providing proxy servers for accessing large events on sites like Ticketmaster.  These companies are basically closed down at the moment, it’s a sector that is facing as much uncertainty as any.

Other Sectors

From discussions, there’s almost no sector of the proxy market which is doing well out of the current crisis.  It’s hardly a shock as when demand plummets, economies go into free fall then it’s hard to find anyone who will benefit.  Although I’m sure there’s lots of George Soros type characters making a fortune somewhere shorting shares and currencies.    Most SEO research and marketing type companies have slashed costs and expenses so high grade proxies are a an easy cost to eliminate.  I’m not sure how companies like Luminati are doing currently but I know some of the larger, commercial grade proxy companies are suffering badly.

It’s difficult to see opportunities at the moment, even the thought of spending money on proxies seems rather reckless at the moment.  However there are certainly going to be some great chances for people to make money even in this situation.  There are of course some indicators which are beneficial particularly to those who are linked to online markets.  There are way more people spending a huge amount of time online now, and many markets are less volatile to situations like Covid than others.

One depressing statistic I read was that online gambling was surging due to people simply being bored.  OK for those who can control and afford to gamble but for those who have problems in this area is likely a recipe for disaster.    A smaller market for low cost proxies and VPNs is to bypass geo-blocks and restrictions is actually doing well as people use proxies to hide their location.  There’s likely to be other opportunities too especially when the economy hopefully starts to recover.