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THE ‘WINNERS’ FROM A PANDEMIC Ben White
from Peternomics
by StPetersYork
THE ‘WINNERS’ IN A PANDEMIC
From late 2019, to a date still unknown, the Coronavirus has had a long-lasting impact on various lines of work, business and people. For some it has been very detrimental, causing a business to lose vast amounts of profit, or even go bust. However, some businesses have managed to benefit from this period, with some even performing better than they did prior to the lockdowns the world has faced.
Food services Whilst various countries have had to face lockdowns, restricting people’s freedom to dine at restaurants and go to pubs, it has not restricted them to order food online. There has recently been a takeaway surge, where orders had increased by a vast 46% for companies such as Just Eat, Deliveroo and Uber Eats. Elsewhere, online grocery companies, such as Ocado have seen benefits for their services. For Ocado specifically, which was founded in 2000, there has been a sales increase of 40%, as many shoppers are able to get their entire weekly shop from home. The demand for Ocado is at a high level, with customers often placed in queues to place their order. For investors in these companies, there were increases in share prices at approximately double their value in early to mid 2019.
Ecommerce Ecommerce is where companies sell goods or services using the internet. In lockdowns, companies such as Amazon, who use Ecommerce, saw their company become vital for many people stuck inside. This led the company to achieve record revenues of around $96.15bn in the third quarter of 2020. Another company, Shopify, who are similar to Amazon in terms of online selling had a very successful stint over the last year or two. The company had managed to overtake eBay to become the second biggest Ecommerce site, with its value doubled since the start of 2020. The company managed to process around $61bn worth or merchandise, which was accelerated by the global shift to online shopping.
Technology Companies Despite Amazon being the current stock market leader, the Technology sector is the largest sector in the market in 2020. The biggest Tech company in 2020 was Microsoft and due to numerous people working getting an education from home, the Microsoft Teams communication app has been vital for keeping schools and businesses working and functioning effectively. In April 2020 there was around 75 million people using Teams daily. Another giant in the Technology market, Apple had managed to gain $58.3bn in the March quarter of 2020, despite closing retail stores. The internet allowed them to make up from lost retail sales in stores across the world. Arguably due to reliance on computers and phones during the lockdown periods, many people have gone to Apple for products such as iPhones, iMac and MacBook Airs, which helped people facilitate online working/ learning. Apple even managed to release new versions of these products, and with their premium prices and the high demand faced, they gained a vast amount of revenue in 2020.
Which sector benefitted the most? Looking at the stock market listings for 2020, the sector with the largest share value is the Technology sector, due to companies such as Microsoft, Apple, Zoom and various other huge companies having such a prosperous year. However, the E-commerce sector is close to the value of the Technology sector largely down to Amazon having a value of $401bn and Tesla having a value of $108bn. There were many other industries that had a good year in terms of the stock market. This is shown in this diagram below:
