APD | Covid-19 – Who are big losers and beneficiaries?

By APD writer Imdad Hussain

US late President J.F. Kennedy once remarked that when written in Chinese, the word ‘crisis’ is composed of two characters; one represents danger, and the other represents opportunity. It is a lesson of history that every crisis, at the same time, has an opportunity.

Any crisis is always worrisome and the countries, organizations, and individuals act differently to ward off the associated difficulties and we always come across success stories and failures.

Recent lockdowns have seen the latest technology come into play as online shopping has witnessed an upward trend and some businesses in E-commerce fold have made unexpected gains through online options as people struck at homes resorted to such shopping.

However, this success is also accompanied by failures as the latest figures of a big-name like Amazon tell a different story as it remained in limelight in mid-April and according to an estimate, customers made purchase orders of worth 11 thousand dollars per second on its website.

But two weeks later Amazon accounts tell a different story as according to a company’s announcement there is a possibility that when the company’s April-June performance would be reviewed it may find itself in deficit for the first time in five years.

Between January and March despite more income, the company’s expenditure witnessed upsurge as it had to induct 175 thousand new employees to meet increased demand while it also incurred up to 4 bn dollar additional expenditure on protective gear and sprays to avoid coronavirus.

Home entertainment is another profit-making industry as the trend flourished in the face of the corona pandemic. Streaming in the last two years has witnessed an 18 percent increase in cinema-goers with Netflix customers multiplied with 16 million new customers during January-March, a 47 percent increase while Italy and Spain registering 57 and 34 percent increase respectively in Netflix users.

But this story also has its dark side; the pandemic halted the production of most of the new films and dramas. Besides the pandemic has been instrumental in devaluing the currencies of a number of countries.

The pandemic also forced Disney to close down its theme parks world over though it benefited a little during the period; at the same time, it had to bear a loss of 1.4 bn dollars, as its streaming service demand saw a manifold increase with 55 million subscribers since its launch in November while it took 7 years to Netflix to attain this figure.

You may think that the rise in online shopping trends had triggered logistics companies too but the situation due to travel restriction remained quite complex. The US Federal Express and UPS, the big names in the field, are now seeking help from the US government as they are faced with logistics issues due to lockdowns and also due to limited business activities.

Similarly, food delivery business was also affected as in many countries’ restaurants were only allowed to take away or delivery service which attracted a little interest though the online purchase of food items saw increased activity.

Interestingly, sex-related toys industry earning up to the 27 billion dollars saw a manifold increase in toys demand though Covid-19 proved disastrous for sex workers not only financially but from a health point of view too as they have no legal rights in many countries though Japan has announced financial assistance for them.

In the current day scenario, fitness has attained all the more importance and as such the travel restrictions and closure of gyms during lockdowns was really annoying as a result fitness equipment from mats to dumbbells and smartwatches witnessed an increased demand with trainers shifting to the online option,

But the lockdown also had its negative impact on companies that run gyms and fitness facilities on large scale as India’s famous company Cult. Fit announced the sacking of 800 employees and a 50 percent cut in salaries.

Online communication popularity is sky-rising as its app was downloaded on more 130 million occasions which is 60 times more as compared with last year with video conferencing service provider Zoom benefitted the most as it has become an important source of today’s communication. Though the freest, the company earns from customers using its premium services, and in the first three months of 2020 it earned over 120 million dollars, double than last year.

Another success story in telecommuting is ‘Slic’, an instant messaging platform used by the business for internal communication as its customers doubled.

In the digital transactions area, the world’s biggest company PayPal also faced Covid-19 devastation as its profit plunged eight times in January-March but its shares touched a record high in the first week of May due to more people turning to the digital option of payments. More and more people are adopting this payment feature not necessarily due to the pandemic but also ease in its use.

(ASIA PACIFIC DAILY)