Coronavirus has been one of the most dangerous threats to human existence. The attack of this microscopic virus has hampered the industries across the globe. While some are fearing permanent or temporary shutdowns, some are turning the crisis on their favour. This article will give the reader a glimpse of the industries that are winning and losing in the time of the contagion.
In 1918 Spanish Flu wreaked havoc and killed 10-15 million people of the world. A century later, when the world was enjoying in the age of technological disruption, when the people were playing God with the help of advancements and science, once again it had to bow in front of another pandemic, Coronavirus disease or COVID-19. The disease has resulted in economic contagion and massive breakdown all around.
Struggling to find a proper medication or treatment is going on in full swing, without any positive news as of now. Social distancing and quarantine seem to be the only way to contain this virus, which originated in Wuhan province in China. India, crossing the mark of 600 and the number of virus-infected patients being unstoppable, has reached the stage of total lockdown for 21 days, as urged by the Prime Minister Narendra Modi. No one knows what will happen after this 21 days, but lack of optimism loom large over the masses.
At this critical hour, several businesses like aviation, travel and hospitality, apparel, large format stores (LFS), movie theatres, multiplexes, entertainment places are running in losses. When the phase of the coronavirus will be over, a distant possibility it may seem now, people may find that their favourite restaurants and malls are shut down permanently.
The moment of uncertainty is weighing heavy over large businesses and organizations, over the market conditions and the industrial sectors at large. But, there are some ventures that are sleeping over colossal profit. Small businesses like Kirana stores, Mom and Pop stores, small grocery stores and the eCommerce platforms are turning the tough times in their favour.
Harming the supply chains
The lockdown in China has affected adversely the production and supply chain across several sectors like automotive, tourism, retail, electronics, production and manufacturing etc. Hubei province in China accounts for 9% of the total vehicle production of the country.
Hubei is also a hub for the foreign and domestic manufacturers of automotive. Shutting down of the plants due to the pandemic has hit hard the global automotive supply chains; resulting in the steady diminishing of stocks and scarcity of auto parts.
Aviation companies, hoteliers, restaurants, tour and travel operators, transport service providers, travel agencies dotting the global sector are looking southward due to the travel restrictions and the panic-stricken tourists deciding against venturing out. Tourism dependent countries like Thailand and Malaysia are scathed by the economic slowdown brought along by the coronavirus outbreak.
Few small businesses are thriving
When the people fearing the contagion decides to engage in social distancing and home quarantine, they prefer to get their essentials delivered at homes. This is where the selected winners come in, like the eCommerce platforms, the online retailers become active.
The small grocery stores and ration shops, which were once overshadowed by the glitters of the malls, are now saving the masses from running out of their daily requirements. The manufactures of masks, sanitizers, soaps, hand washes are dreaming of millions during these tough times.
With the rising demands and the soaring panic buyers, the small businesses and retailers are experiencing a growth impetus in recent times. Let us dig a bit deeper to get a better view of the situation.
The situation looks similar across the globe, with some nations like Italy bearing the greatest wrath of the outbreak. Some of the locally-owned stores are booming in profits, both in India and also the global market like the USA. In 2016, when the Modi government decided to activate demonetization overnight, the online payment platforms like Paytm heaped in profit with thousand going for cashless transactions as that was the only way.
The online education platforms are winning
In 2020, when people are unable to leave their safe houses, the education sector is also hit hard, especially during the exam season, that is January to April. Several board examinations, joint entrances etc take place during this time. The coronavirus outbreak has compelled the educational institutions to shut down and also the home tuitions were called off. So, what will the students do at this hour?
The Edtech has come right up for the rescue. This tough time has boosted the popularity and profit of the Edtech platforms to a few levels higher. Sites like BYJU’S, Toppr, Vedantu have started giving free materials to the students to some extent. They also witnessed a steady growth in the number of paid subscribers.
BYJU’S has started to give the study materials from class I to class XII free of cost until April 2020. Toppr has also followed the same path. Online class lectures, study materials, video lessons in collaboration will several schools and colleges are helping the students save their careers, and the credit goes to the Edtech sector.
As said by Zishaan Hayath, the founder of Toppr, “Edtech can fill in for the gap in schooling for a temporary period of three to six months. But if schools shut longer, we’ll need to find ways to enable school teachers to directly conduct live classes, figure out how kids can take exams, and so on.”
Initiatives for saving some
While some businesses are in the light and some in darkness, the Indian government has taken some initiatives to save the small businesses, the startups. The Finance Minister of India Nirmala Sitharaman “raised the threshold of default to Rs 1 crore from the existing Rs 1 lakh to prevent triggering of insolvency proceedings against MSMEs.” She also added that it must be “implemented straightaway” keeping in mind the uncertainty of the crisis.
The Finance Minister will also consider the suspension of Section 7,9, and 10 of the Insolvency and Bankruptcy Code (IBC) in case the pandemic continues for a longer tenure. She said, “This can stop companies from being forced into insolvency proceedings in such force majeure causes of default.”
As opined by K.R. Sekar, Partner, Deloitte, “The move preventing insolvency proceedings against MSMEs will help thousands of small firms that are spread across the length and breadth of the country.”
The micro, small and medium-sized enterprises are also helped by the public sector lender Union Bank of India. On 26th March 2020, it announced that it has started am emergency funding window for the MSMEs across the country. The government decisions and initiatives are in favour of the Indian startup ecosystem and they do not need to worry about insolvency during the tumultuous times. So, we may consider the startup ecosystem to be on the winning side of the line.
High demand of eCommerce platforms
There are several thousand out there frightened to get out of their main doors. They prefer the online platforms, like Amazon, Flipkart, Big Basket, Grofers, Licious, Fresh To Home etc. For the daily needs like vegetables, meat, eggs, milk, rice, pulses etc, one would require these sites to buy in bulk.
The Kirana stores are running out of stock oftentimes due to the overwhelming demands. According to a CNBC report, Amazon is adding 100,000 jobs to suit the rising demands. Some platforms like Licious and Grofers are not delivering at the present moment due to the unprecedented events. Several sites have also blocked receiving new orders as they are busy working hard for delivering the already pending orders.
In China, which has made its name in recent times due to the technological advancements and disease outbreak, has added unmanned robots in the delivering systems. Robots are used in China to deliver food supplies and medicines in Wuhan, which is the epicentre of Coronavirus.
The pharmaceutical companies and healthcare tech are also on the winning side. The online medicine delivering apps like PharmEasy, iMed, mfine are available and assisting the worried consumers. The chains of medicine shops like Apollo Pharmacy are open 24*7 to serve the needs of the hour.
Be it getting groceries or medicines, online platforms are playing a very important role in our lives. The online payment platforms are sharing the space with these above-mentioned players. More and more people are avoiding cash transactions and using Paytm, PayPal, BHIM UPI, Google Pay for their purchase of essential items.
Those turning crisis on their favour
The delivery executives are doing a great job at this hour, helping the people to get what they need. The logistic arm of Alibaba Group, Cainiao launched Green Channel initiative for delivering protective clothing and medical supplies for the medical practitioners and doctors in Hubei. Within 9 days, Cainiao shipped more than 5 million medical items in Wuhan and other cities of the vicinity.
With all the organizations having their shutters down, virtual meetings and online conferences seem to be the only way to keep their business ticking. Face to face meetings and conferences are a complete NO-NO at this moment. Google Duo, WhatsApp video chat, Skype are having a sky-high number of users, during the social distancing.
Video conferencing startup Zoom has already observed a 50% hike in its market share within a few months. The Skype and Teams of Microsoft are offering special services for their users during the outbreak of coronavirus. The online streaming sites like Amazon Prime, Netflix, Hotstar, Voot, etc are seeing major upticks in their number of subscribers, thus keeping them strong in the winning side of the line.
Critical times for the losers
As reported by the Economic Times, India has witnessed 35% decline in the restaurant business,
- 35% reduction in the apparel export orders from Europe,
- 15% fall in the shipment of consumer durables, and electronics between Jan to March 2020,
- 30% fall in the demand for poultry items and seafood,
- and 1-2 trillion dollars lost in the global economy.
As already mentioned in the post about the effects of coronavirus on the Tourism sector, the aviation companies are fearing humongous losses due to the travel restrictions, suspension of visas, flight ticket cancellations and grounding of several flights as well. The crisis in the aviation sector has come when the value of rupee is also declining.
The restaurants across the nation have witnessed a decline of over 40% in the past few weeks, with total lockdown, the businesses can have 80-100% losses if the situation does not come in control soon. In 2018-19, India exported Rs 1 Lakh crore garments to Europe. With Europe being the recent epicentre of the pandemic, the export is highly hampered, incurring huge losses on the apparel segment.
The whole nation is in quarantine, so buying apparel is not in the picture as of now. Even the online platforms like Myntra, Amazon, Flipkart are nor taking orders of apparels, following the total lockdown.
With the increasing number of Covid-19 affected patients in India, chaos, confusion and panic dominate the masses. Several believe that the seafood, fishes, chicken and eggs can increase the chance of getting infected. Due to this, their prices have reduced significantly; resulting in a heavy loss in this sector.
Most of the businesses of the country are adversely hit by this pandemic, barring a few. The situation across the globe is critical, with the increasing number of affected people and casualties. The pandemic has harmed the social and economic harmony of the world. If the situation persists for long, then there will be no losers and winners, but only increasing Coronavirus cases and casualties.
The real winner, I feel, is the Nature. Coronavirus has resulted in decreasing levels of pollution in the world, the birds and animals are having moments of respite due to the outbreak, at the cost of the human lives. Earlier, Nature was at risk due to humans, now humans are at risk due to the outbreak. Nature has its own way of cleansing things. The world has seen such epidemics and pandemics across hundreds of centuries. Mankind feels overconfident with technological and scientific advancements, but as of now, no medicine is developed for treating Coronavirus.