8 Businesses Recording Growth Amidst the Coronavirus Outbreak
The recent outbreak of the potentially fatal virus which has spooked countries over the world is also making headlines for disrupting global practices across sectors. The wave of uncertainty brought about the virus is leading major institutions and banks to cut forecasting for the global economy. In fact, a March report by the OECD said it relegated growth forecasts for most economies in 2020.
The impact on the global economy has been unsurprising. China, the country where the virus originated from, saw the steepest fall in the gross domestic product in terms of magnitude, registering a growth of 4.9% this year as opposed to the earlier forecast of 5.7%, said OECD. In the meantime, the global economy has also plummeted to a 2.4% increase in 2020 — down from the earlier forecast of a 2.9% increase.
However, even amidst the looming threat of this pandemic, a markedly unusual sense of perspective is settling over the worldwide commercial landscape.
As reports come in from over the world, throwing light on the consumer boom born from the breakout of the novel coronavirus, a few select stocks are rising in this hairy situation. While tourism, aviation, and food industries have seen lost demand, sectors such as chemicals and health and sanitation are benefiting from the immediate ramifications of the flare-up of the disease.
With the usual trades dominating market share, a few other sectors seem to be pocketing huge growth as a consequence of coronavirus’ global impact. An interesting topic of debate among financial analysts worldwide, let’s take a look at the industries amusing them with their growth.
1. Online Conferencing
As businesses around the world have come to a halt, many of them are taking preventive measures to keep coronavirus at bay while still continuing with their operations. As such, a recent trend that has emerged to combat this issue is the use of cloud meetings and online conferencing for team collaboration.
Cisco announced that it would diversify its Webex offering to expand its capabilities in the 44 countries where it is present, along with offering round-the-clock assistance for businesses. A smart move on its part, the networking, and software giant registered 4-5x users in Japan, South Korea, and Singapore as the average time spent on Webex increased by 100% among these users.
Elsewhere, Google mentioned that it would allow free access and additional capabilities to advanced Hangouts Meet for video conferencing to all G Suite customers over the world. These capabilities allow for larger meetings of up to 250 participants each call with live streaming for 100,000 people within a sector.
2. Online Gaming
While coronavirus has resulted in the cancellation of Tournaments across China and caused a severe decline in the demand for video game consoles, online gaming has caught up.
Powerless and stuck inside their homes, people are turning up to meet with each other online. And its effect has been massive. According to a market researcher named Sensor Tower, the total number of game downloads on Apple’s app store in China has risen by 27.5% YoY as total revenue increased by 12.1%.
Many of China’s popular platforms, like Douyu, for instance, have also reported increased interest in games like PUBG, Honor of Kings, and League of Legends with the platforms streaming index describing the popularity of the games having almost doubled. It’s not surprising, too, as Honor of Kings, the top game on Douyu during this time of the year, reported to have almost 63 million views in comparison to the 31.7 million views that PUBG had around the same time in 2019.
3. Online Learning
According to the UN, the closure of schools and educational institutions in over 13 countries to arrest the spread of COVID-19 has disrupted the education of almost 290 million students. As such, administrators and teachers have moved on to using virtual tools and assets, with online learning has gained increased prominence as a result.
Prime among them is WHO; the United Nations subsidiary concerned with public health has moved on to educating people about how to arm themselves against the virus through an online course. Ever since the course was rolled out, it saw 3000 new users registering for it on the first day of the course itself as 200,000 people watched the course’s introductory video on YouTube.
With learning not as dependent on physical proximity as it has been before, esteemed institutions like Harvard are also employing online learning with immediate effect. In an interview with The Gazette, administrators at Harvard spoke at length about their decision to adopt virtual education to make it possible to conduct classes without sustained physical contact.
4. Household Cleaning Products
Amidst the growing threats of the virus outbreak, people over the world have unanimously identified a new enemy; Germs. Household cleaning products have seen increased demand as organizations move to meet the spike. The Environmental Protection Agency has released a list of essential antimicrobial products earlier like Lysol, Clorox, and Purell, household cleaning products have been practically disappearing from counters.
According to a report by Bloomberg, shares for Clorox were on the rise in the month of February alongside other drugmakers. However, spokespeople from these organizations were hardly surprised by the fact. Purell stated that it had experienced “several demand surges in the past during other outbreaks, and this is on the higher end of the spectrum but not unprecedented.”
5. Personal Hygiene Products
If it’s one industry that has continually compounded on growth since the news of the outbreak, it’s that of personal hygiene products. Hand sanitizers are flying off the shelves as Amazon pricing of the same products has grown to exorbitant rates.
According to a report by Nielsen, sales of hand sanitizers in the U.S.A had increased by 73% in the last four weeks close to February 22 when compared to the same period in the year 2019. Another report released by Kantar, a leading firm in data insights and consulting, revealed that the supermarket sales of sanitizers had gone up by almost 255% in the last four weeks leading to February 23.
The increased demand for hand sanitizers has been such that a buying limit has been introduced on it in some parts of the world. In a photograph tweeted by a Twitter user, a sign from a Boots store actually says that:
“Hand sanitizers are currently limited to two per customer. Help us to support as many people as possible to keep their hands clean this winter.”
6. On-Demand Exercise Streamers
As virtual tools gain momentum, fitness hasn’t taken a backseat. While virtual fitness classes aren’t a new phenomenon, their demand has massively increased, turning more and more people into homebound gym junkies.
In fact, Keep, a fitness app offering exercise programs that range from yoga to cycling, saw its ranking jump from the 200th to the 65th position in China’s iOS App Store, according to App Annie statistics. Supermonkey, another round-the-clock gym chain offering users classes on WeChat with a pay-as-they-go model, has employed live-streaming of gym lessons. Their popularity increased so much that the company’s free online classes saw more than 2 million views on Weibo’s Yizhibo.
Another on-demand exercise streamer, Les Mills, reported that its traffic during the period of February has never been this high. As people even tune into Nintendo Switch’s game, Ring Fit Adventure, to exercise from the safety of their home, it only shows the overarching effect the outbreak of the COVID-19 has had on this industry. Predictably, online sellers in China have taken advantage of this scenario to sell the game at twice its price.
7. Video Streamers
The streaming video industry, apart from health & sanitation and online gaming, is raking it in by the millions. The business which is already big has suddenly gotten bigger as revenue in the industry is expected to soar to $25.9 billion by the end of the year, increasing at a CAGR of 4.1% and reaching $30.4 billion by 2024, according to Statista.
Netflix, the industry giant in the video streaming business, with about 167 million global active users, expects to add almost 7 million subscribers in the first quarter of this year as a result of the impact of the COVID-19 coronavirus outbreak.
Michael Olson, Analyst at Piper Sandler, conducted research on Netflix’s revenues in the wake of the outbreak and released the results of the quarterly Netflix Navigator, a tool that specifically analyzes Netflix’s search trends. The research shows an interesting trend in the number of users increasing during the period of January-February. Additionally, the data revealed that Netflix’s users in the United States of America and Canada, a region called by the company as UCAN, is poised to register a 3.8% YoY growth, which is almost 100% the consensus estimates of analysts.
8. Food Delivery Services
While the restaurant industry has been grappling with low sales and aversion to dining outside, the food services industry has massively picked up. As the virus spreads throughout the world, preventive measures in the food industry have taken a shift to instead having it delivered to their homes.
Delivery companies like Meituan, which have had to learn as they go, have now moved on to supplying groceries too. And because of customers’ wariness to avoid as much contact as possible, Meituan deployed driverless vehicles to deliver food parcels to stations, which also resulted in an increased demand for contactless delivery. Customer concerns over contact also drove the development of safety policies, including wearing gloves and masks, disinfecting delivery bikes, and keeping a distance from other deliverers while on the road.
Third-party delivery service, Postmate, also announced that it would be introducing a non-contact delivery feature for its in-app customers and workers, while Instacart, a grocery delivery service, launched a service called “Leave at My Door Delivery.” This feature allows delivery personnel to drop off a customer’s order at a predefined time without having to make contact with the receiver.
Where We Go From Here
At the rate the coronavirus is growing, it looks set to upend the most basic components of daily life. People are communicating, eating, traveling, and interacting with each other differently. However, still, as it’s sure that the disease won’t affect everyone equally, the preparations of people to combat the disease are different.
For people without the means, the virus has caused a marked shift in daily practices while the people having the means simply view the outbreak as market disruption. As markets crash and rise every day and greater economic evolution unfolds, a global slowdown and recession are expected. However, even amidst this pessimistic backdrop, an optimistic outcome to the scenario has been hugely undermined. As markets and policymakers react to the outbreak and come together to the aid of the people, economic upheavals could turn out to have a larger positive result.
What happens next remains to be seen.