The confinement measures generated by the coronavirus helped some sectors prosper, while others unexpectedly fell into the void.
The coronavirus pandemic, a virus that could have come to staybrought the global economy to its knees, but confinement measures also helped prosper some business. However, even in success stories you have to read the fine print.
For example, many have used the internet to do their shoppingWhich should be apparently fabulous news for e-commerce.
That has certainly favored some companies, but the figures of the American giant Amazon they tell a different story.
Under the wing of the richest man in the world, Jeff BezosThe company made headlines in mid-April as one of the clear winners in the coronavirus crisis, with customers overflowing its website and spending about $ 11,000 a second.
In response, Amazon’s shares recorded a historic rise.
But two weeks later, the group’s accountants were on a different note. It has been said that the company could soon see a loss for the first time in five years when its data is released between April and June.
Expenses in times of coronavirus
Despite having produced far more money between January and March, Amazon faces mounting costs to handle the surge in orders, forcing it to hire 175,000 more workers.
The company says it will have to spend $ 4 billion to deal with the spread of covid-19.This includes providing their workers with personal protective equipment and carrying out disinfection operations in their gigantic warehouses.
Amazon faces rising costs to handle rising orders
That amount exceeds Amazon’s earnings during the first quarter of 2019 ($ 2.5 billion).
Amazon has long resisted recognizing unions, arguing that it prefers to speak directly to its employees about any concerns they have.
Netflix leading the boom in “streaming”
The home entertainment industry has been a clear winner in confinement, settling on a growing trend that came from before.
Despite the fact that the number of people who went to the movies worldwide grew by 18% in the last two years, Netflix subscriptions increased by 47% during the same period.
Not surprisingly, the home entertainment sector thrives when so many people have no choice but to stay home.
“People need entertainment and escapism now more than ever,” trend analyst Blake Morgan told the BBC.
Netflix announced on April 22 that it had nearly 16 million new customers between January and April.
But this story has another side that does not look as good. Confinement conditions have largely paralyzed the production of new series and movies.
In addition, many national currencies have lost value due to the pandemic, which means that Netflix’s newest international customers are not bringing as much money to the American company.
Another great American entertainment company that has made some profits but also losses during the pandemic is Disney.
The company has had to close its amusement parks when the containment measures were put in place. That has cost Disney at least $ 1.4 billion, according to CEO Bob Chapek.
But at the same time the demand for Disney’s streaming services has exploded.
The Disney + platform, which launched in November, now has close to 55 million subscribers, a figure Netflix took five years to obtain.
One could hope that the growing e-commerce will also bring good profits for delivery companies that leave packages at your doorstep.
But the real picture is more complicated.
Two of the largest delivery companies in the world, Fedex and UPS, based in the United States, have asked the US government for support for logistical problems caused by confinement restrictions.
Although there has been an increase in private customers shopping online, the most profitable operations are business-to-business, and the demand for these has fallen because many businesses have had to close their doors or reduce their activities during the pandemic.
Similarly, confinement has had pros and cons for food delivery services.
Some restaurants have been able to open to make takeaways in some countries and cities around the world.
But while the demand for online food purchases skyrocketed, home food orders don’t seem to have suffered the same fate.
Sex sells, but not so much for sex workers
From Colombia to Denmark, there has been an increase in the sale of sex toys during confinement.
It is a great business with a market that moved almost $ 27 billion in 2019.
The covid-19 appears to have given a boost to the sex toy industry, with companies specializing in high-tech devices offering “long-distance experiences” benefiting from social distancing.
But the coronavirus has generated loss of income – and increased health risks – for sex workers.
In many countries, employees do not have legal rights and are not eligible for government aid programs.
Personal trainers try to use the internet to replace traditional sessions
Exercise in confinement
Movement and travel restrictions have been bad news for gyms, but the sale of training equipment to those who get in shape at home has increased.
The so-called “digital fitness” sector has also increased.
Smartwatch sales grew 22% in early 2020, compared to the same period in 2019, according to a report by consulting firm Strategy Analytics.
“Many clients have been using smartwatches to monitor their health and exercise during confinement,” Steven Waltzer, an analyst at the firm, told the BBC.
Personal trainers try to use the internet to replace traditional sessionsBut this situation is difficult for many professionals in the sector and several gyms have had to close their doors.
With millions of people around the world working from home, online communication tools have gained popularity.
The company that Leading the video conferencing business is Zoom. Eric Yuan, the businessman who became a billionaire with the coronavirus (and why he had to apologize)
The app had more than 131 million downloads worldwide in April, according to research firm Sensor Tower, 60 times more than the same period the year before.
Zoom has become the preferred choice of many businesses and members of the public.
Although most people use the free version of the app, which has restrictions like time limits on a call, Zoom make money of users who pay for its premium features and in the first three months of 2020, the company earned $ 122 million, doubling what it achieved in the same period last year.
Another winner of the “teleworking” trend has been Slack.
The instant messaging platform companies use for internal communications said its subscribers have nearly doubled their number between January and March.
PayPal registered 10 million new accounts between January and March
One of the largest digital payment companies in the world, PayPal has been seriously affected by covid-19. Its net earnings for the first three months of 2020 fell to $ 84 million, almost eight times less than in the same period last year.
But at the same time, PayPal’s shares reached their highest value on May 7.
How do market analysts explain that?
Many people face financial difficulties and may be inclined to spend less during confinement, but the same situation may also encourage them to migrate to digital payment services, a potentially positive sign for PayPal’s future.
PayPal registered 10 million new accounts between January and March and processed up to $ 199 billion, an increase of 161.5 billion in the same period in 2019.
“We believe we are reaching a tipping point around the world where people are seeing how simple and easy it is to use digital payments for services,” PayPal CEO Dan Schulman told investors in a conference call on 6 of May.
“Survey after survey shows that people are now more inclined to shop online than to go back to the store,” he added.
I knew the value of the dollar in Dollar Today and I followed the quotation and behavior minute by minute. CLICK HERE
Find out the latest on digital economy, startups, fintech, corporate innovation and blockchain. CLICK HERE