The coronavirus pandemic has spread havoc across the world, ranging from the Brazilian favelas to the world-renowned Manhattan skyline. People, businesses, and the global economy have suffered severe consequences as a result of the virus, but some sectors have surprisingly emerged stronger than before.
A combination of factors, including changes in demand, communication techniques and the introduction of remote working have been vital catalysts for a handful of sectors, who have seen tremendous growth in the last few months. Other sectors have benefitted from shrewd business and marketing plans. These plans have focused on capitalising on the fact that the majority of the global population are staying at home, and as a result, have inevitably resulted in a change in global trends.
The closing of all non-essential and high-street stores has seen the retail sector suffer considerably, as the fixed costs for stores remain, whilst revenue has crashed to record lows for many. Instead, it has been the e-commerce sector which has seen tremendous levels of growth in revenue, traffic and profits. Amazon, with a market capitalization of over £1.236 trillion has spearheaded the e-commerce sector and has seen share prices increase by over 60%. Amazon has grown its market capitalization by more than £472 billion in 2020 alone but is not the only e-commerce company that has experienced tremendous levels of growth as a result of the global pandemic.
Etsy has seen a 34.7% growth in revenue when comparing Q1 2020 and Q1 2019 figures. Active buyers have also increased by 16.4% from Q1 in 2019, and Rachel Glaser, the Chief Financial Officer for Etsy, Inc claims the positive statistics in Q1 2020 were a result of Etsy responding “to changing conditions more rapidly than traditional retail models”. Other companies such as Wayfair, have seen shares double in price in 2020, whilst Chinese e-commerce giant JD.com have seen share prices increase by more than 60%.
As a result of lockdown measures, employees, both small and large, have been forced to think of innovative methods to ensure that their workers can collaborate and maintain productivity levels, even in these uncertain times. Enter the video conferencing sector.
Platforms such as Zoom, Google Hangouts and Microsoft Teams have seen an exponential rise in users, as employers, educational facilities and businesses have relied on modern technology to communicate in an effective and timely manner.
Zoom’s Q1 2020 revenue increased by more than 100% when compared to Q1 2019 figures, whilst profits increased from £155,705 to a whopping £21.2 million. The fact that Zoom offers a free version of its platform is another driving factor in its success during the global pandemic, where income levels have plunged, and people have lower amounts of disposable income. Whilst Zoom epitomises the success of the video conferencing sector, other platforms such as Microsoft (MSFT) and Webex (CSCO) have also reported increased sales and share prices. Some of the changes in communication methods will be irreversible and investors are confident that the major companies in the video conferencing sector will continue to witness growth in a post-pandemic global economy.
One of the more obvious sectors to have benefitted from changes in demand due to the COVID-19 pandemic is the pharmaceutical sector. By providing treatments to coronavirus symptoms, testing kits, face masks and developing vaccines, pharmaceutical companies have been operating at full capacity in recent months.
Governments have purchased millions of testing kits, resulting in a very lucrative payday for some of the most well-renowned pharmaceutical companies. “Bayer saw a spike in profits during Q1 thanks to consumers stockpiling drugs such as aspirin” and the company reported that sales rose by 4.8% to £10.94 billion. Revenues at Eli Lilly & Company during Q1 were up 15%.
Pharmaceutical companies also benefit from the funding they receive from governments. Companies such as Johnson & Johnson have “made it clear that they are receiving funding from the Department of Health and Human Services”. The unexpected surge in R&D in Big Pharma companies will see the potential for growth increase even more in the sector. Potentially, once a vaccine is found for COVID-19, the sector will benefit even further from government funding and mass purchasing from people around the globe.
Whilst it would be immoral to claim that certain sectors should thank the global pandemic for improved business performance, it can be said that without the drastic changes in everyday life, certain sectors such as Video Conferencing would not be thriving in the same manner. As predominantly shown by figures comparing Q1 2019 business performance with Q1 2020 business performance, the sectors mentioned above have seen significant increases in revenue, sales and traffic. However, it remains to be seen if these sectors will remain omnipresent as “winners” in a post-pandemic global economy.