Covid Economy: The winners, the losers and the likely growers

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Covid Economy: The winners, the losers and the likely growers

As Covid19 reshaped the world in 2020 and continues to do so, economies have struggled to stay afloat and adjust to the new circumstances. The newly adopted lifestyle worldwide has dictated the growth or decline of certain industries, while the post-pandemic world might open new possibilities for development for certain industries. Let’s take a look at the industries and companies which have benefited, those which were worst affected and the ones which might grow in the post-COVID era.

Top 5 Companies & Industries that benefited from COVID

Industries that benefited from COVID
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1. Online Retailers

While countries one by one went into lockdown mode, online shopping began to bloom. Amazon became the go-to online retailer for those wanting to stock up on household goods and products to protect them from Covid-19, like hand sanitizer, face masks and disinfectants. According to CNBC between February and March, toilet paper sales jumped 186% on Amazon compared to a year ago, while cough and cold medicine sales rose by a dramatic 862%. Other e-commerce websites, such as Shopify or Alibaba, also recorded significant profit growth as the shopping market moved to the web.

2. Technological Giants

The global shift from offices to home working led to a rise in demand for remote working tools and software. Zoom, the video conferencing company, has become the symbol of the home working/schooling boom of 2020. By the end of April the company’s revenue increased by a staggering 169%. Other technological giants, mainly Microsoft and Apple, also managed to up their profits despite the pandemic. Apple launched and sold new devices successfully making some $58 billion in profit despite closing down stores in the first quarter of 2020.

3. Home Entertainment

The home entertainment sector has benefited significantly from lockdowns, self-quarantines and social distancing measures. Unable to socialize or spend leisure time outside, people turned to online streaming services, such as Netflix, or gaming consoles, such as Nintendo, whose annual profit surged 41%. Netflix had 16 million new subscribers in the first half of 2020 and the numbers continue to grow. The entertainment and news hunger also led to an increase in social media usage. Facebook numbers soared during the pandemic, with some 2.6 billion people using at least one of the company’s apps daily which upped their advertising profits by 39%.

4. Online Learning

School and university closures have impacted 1.2 billion learners in more than 180 countries. Language apps, online tutoring, online learning software – you name it, all of these were used heavily since COVID-19 sent the kids home. Tencent classroom, Google classroom, Microsoft Teams App and other online learning apps and services recorded a dramatic increase in users and ultimately in profit. Students weren’t the only ones who turned to online learning. Lockdowns encouraged many to try and master a new skill to pass the time, for example the popular online languages app Duolingo saw a 148% increase in users.

5. Supermarkets

As all the other retailing businesses were forced to shut their doors to customers, supermarkets, being considered essential, continued working during lockdown periods. Other than to shop for essentials, people used their trips to the supermarket as moments of escape. The supermarket industry was able to make an additional profit, as with restaurants closed down more people prepared food on their own. Two US major grocers reported a growth of over 10% resulting in over $1 billion in profit.

Top 5 Companies & Industries that were worst affected by COVID

Industries that were worst affected by COVID
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1. Travel and Tourism

Travel restrictions, mandatory testing and self-quarantine procedures have crippled the tourism sector. International tourism declined over 70% in 2020, back to levels of 30 years ago. Countries and cities which rely heavily on their tourist income have suffered the most as the lack of tourists had a negative effect on other related industries as well. Some estimates predict that the industry won’t make a full recovery before 2023.

2. Airlines

Of the top 20 companies that saw the steepest decline in profit in 2020, half are in the airline industry. With borders closing down in an attempt to halt the pandemic, airplanes remained grounded. Airlines saw a decrease by 60% in the number of travelers and it is estimated that almost 50% of all airline related jobs might be lost as a result of the pandemic. Bearing in mind the reduction in business travel because of the increased use of online conferencing tools, the future doesn’t appear to be much brighter.

3. The Hospitality Sector

Bars and restaurants have been closed down for the most part during the previous year. Though some have managed to offer take away services, their overall revenue has plummeted when compared to previous years. Hotels on the other hand remained open, but, other than the very rare business trips or people self-quarantining, their rooms also remained empty. More than 42% of people lost their jobs in hotels and some 48% were left unemployed following restaurant and bar closures.

4. Fitness Industry

Gyms faced unique challenges in the wake of the pandemic. How can people who want to exert energy by running on a treadmill be able to do so while wearing a mask? How would gym owners possibly ensure that every member wipes off the equipment they have just used? It is estimated that the US gym and health club industry lost $13.9 billion from mid-March to August 31 2020. At the peak of gym closures last March, class bookings everywhere fell as much as 85%. The fitness industry however was able to adjust slightly to the new circumstances by offering online workouts, which opened up new development options for the sector.

5. Leisure Facilities and Industries

Cinemas, museums, sports events, concerts, zoos, theme parks – the list goes on. All of these leisure facilities remained out of our reach during the pandemic. From February to April last year alone jobs in the performing arts and spectator sports industry fell by 45.4%, while amusement, gambling, and recreation industries were the second-worst hit by the COVID shutdowns in the US.

Top 5 Companies & Industries that will grow after COVID

Industries that will grow after COVID
Photo by Monstera from Pexels

1. Leisure Facilities and Industries

When it’s all back to normal, what’s the first thing you want to do?” is one of the questions people have been asking each other all over the world. Hit hard by the pandemic, the leisure and recreation industry is expected to make a quick recovery with people eager to spend time attending concerts or sporting events, going to the cinema or taking the kids to theme parks when all restrictions are finally lifted.

2. Remote Work/ Online Meeting Platforms

Though the shift to working from home initially was temporary, it appears as if companies will strive to implement this model on a more permanent basis. Therefore, all the online meeting platforms, such as Zoom, Microsoft Teams and others, are expected to grow even more in the years to come and to further develop and optimize their platforms, security issues definitely becoming a top priority. Also, cloud-based applications and platforms are set to become the foundations of companies looking to remain competitive and flexible in a post COVID-19 world.

3. Cyber Security

During the pandemic, people have become accustomed to using technology and the Internet in nearly all aspects of daily lives. We’ve become more prone to cyber attacks than ever before, so having a secure network has become vital. Cyber security, whether while dealing with online payments or Zooming about sensitive work issues, will be in the center of this new era and companies and industries providing services to keep us safe online are bound to strive in the years ahead.

4. Remote Medical Services

Having been essential in our fight against COVID-19, the healthcare sector is expected to have tremendous growth. With people avoiding going to hospitals due to the pandemic, many have turned to remote medical services. Accessibility to healthcare being of utmost importance, telehealth is set to become the norm, which means the industry will need to adapt to a digital world and audience. Health tech, such as on-demand doctor apps and 24-hour digital medical assistance, will definitely be in high demand and governments will also need to adapt soon to offering virtual treatment whenever possible.

5. Fitness Industry

Along with the importance of accessibility to healthcare, the pandemic also highlighted how crucial it is to take care of ourselves. The importance of having a healthy lifestyle dawned on us when COVID struck and the numbers began to roll. While regular gyms were hit hard by the forced closures, the whole industry will likely continue expanding. Both avid gym goers as well as newbies are already investing in fitness apps and home equipment as a preventative measure.

Although we all like to reminisce about the pre-COVID era, this global crisis has undoubtedly taught companies some valuable lessons about the unpredictability of the economy. Some businesses thrived, others lost, but still, with some slight adjusting, there’s a light at the end of the tunnel. Let’s just hope that we will be able to value these lessons in the post-COVID era as well.

Sources:

https://www.ft.com/content/844ed28c-8074-4856-bde0-20f3bf4cd8f0 
https://edition.cnn.com/2020/05/07/business/companies-thriving-coronavirus-pandemic/index.html 
https://www.cnbc.com/2020/09/29/how-amazon-managed-the-coronavirus-crisis-and-came-out-stronger.html#:~:text=Between%20February%20and%20March%2C%20toilet,sales%20during%20the%20second%20quarter 
https://www.globenewswire.com/news-release/2020/11/19/2129923/0/en/Global-E-Learning-Industry.html 
https://www.unwto.org/impact-assessment-of-the-covid-19-outbreak-on-international-tourism 
https://www.restaurantbusinessonline.com/financing/report-85-independent-restaurants-could-close-due-pandemic 
https://airlines.iata.org/news/the-impact-of-covid-19-on-aviation 
https://www.icao.int/sustainability/Documents/COVID-19/ICAO_Coronavirus_Econ_Impact.pdf 
https://www.businessinsider.com/jobs-industries-careers-hit-hardest-by-coronavirus-unemployment-data-2020-5#7-restaurants-and-bars-4 
https://runrepeat.com/pandemics-impact-fitness-industry 
https://www.cpacanada.ca/en/news/world/2020-06-03-post-covid-19-future-sectors 

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