Business in the time of coronavirus: Who wins, who loses

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Business in the time of coronavirus: Who wins, who loses

A brief look at the business sectors that are doing well and those hit by COVID-19

Published: May 13, 2020 11:14 Compiled by Jaya Chandran, Assistant Editor, with inputs from AFP

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There will be economic victims from Covid-19 that may or may not be added to any final toll of this pandemic. — The coronavirus pandemic, set to provoke a severe global recession this year, is hitting global business sectors in many different ways. Here is a list of winners and losers, according to a study published by the research unit of Italian bank Mediobanca, based on results from the first quarter of 2020. Image Credit: Twitter

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INTERNET: Global internet companies are the top performers, managing to maintain their momentum even during the worst of the coronavirus crisis. Revenue for the sector jumped by 17.4 per cent, with net profit rising 14.9 per cent. Growth has been driven by cloud services (+27.4 per cent) as they benefited from increased teleworking, new subscriptions (+26.5 per cent) and e-commerce (+22.8 percent). Conversely, online travel sales were hit hard during the quarter. Image Credit: Pixabay

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VIRUS-PRICE-GOUGING-5-(Read-Only) — LARGE-SCALE DISTRIBUTION: The pandemic has led to "unprecedented growth in demand from the mass retail sector," although what is in consumers' shopping baskets has changed. Food, health and hygiene products (think hand sanitiser) have increased while products deemed less essential have fallen. On average, the sector's sales grew by 9.1% with European online food sales growing 40%. Net profit rose 34.8%. Experts expect this growth to slow in the second quarter due to inventories built up when the epidemic broke out. Image Credit: NYT

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A JustRight microbe barrier at a pharmacy — PHARMACEUTICALS: Higher sales of antivirals and respiratory drugs drove growth in the sector, which partially offset lower demand for other drugs due to fewer surgeries and medical consultations unrelated to Covid-19. The segment's sales grew by 6.1%, while net income jumped 20.5%. The outlook is "positive", even if inventories could be a brake on growth, the study found. Image Credit: Supplied

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1.2122877-1607493025 — ELECTRONICS: Another performer was the electronics sector, up 4.5%, driven by an increase of more than 20% in sales of semiconductors and microprocessors. Despite a drop in money transfers and less travel, electronic payments rose 4.7%. Nevertheless, the sector's net profit fell by 17%. Image Credit: Supplied

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Oil — OIL AND ENERGY: The biggest loser in the pandemic is the oil and energy sector, which saw its sales fall by 15.9%, suffering net losses due to the collapse of crude oil prices. Multinationals, which have decided to reduce investments by an average of 25% as a result of the crisis, are expecting a very difficult year, with a drop in sales of around 30 to 40 percent, Mediobanca estimated. Image Credit: Reuters

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1.2268087-1978670013 — FASHION: Always a "solid" segment, fashion was deemed non-essential during the coronavirus emergency. Moreover, most shops selling clothing were closed during lockdowns. Revenue slid by 14.1 percent during the quarter despite a robust 25 percent rise in online sales. Net profit fell by 92 percent. Certain categories suffered the most, such as jewellery, while the sale of eyeglasses performed better. Image Credit: Bloomberg

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200324 korean air — TRANSPORTATION: The pandemic has brought the sector to a halt. The automobile industry has seen its sales fall by 9.1% and its net profit by 92.4%. For aircraft manufacturers, the pandemic is synonymous with net losses and a 22.1% drop in revenue. Image Credit: Reuters

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Copy of 096813-01-08-1576064860113 — TELECOMS: While telecom revenues declined by only 2.6%, net profit fell 20.4 percent, mainly due to unfavourable exchange rates. "Although traffic volume increased (...) it did not lead to an increase in turnover because these companies often offer packages," said the study centre, while raising the possibility of a recovery. Image Credit: AFP

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