APD | Many firms get rich from Covid-19

By APD writer Alice

The Covid-19 pandemic has crippled most businesses, but made video game companies, protective equipment manufacturers and online meeting software producers richer.

Covid-19 is a nightmare for nearly all businesses. Mass layoffs and unpaid leave have caused 21% of the US workforce to apply for unemployment benefits since mid-March. Economists believe that the US may have fallen into recession. Even when some states start reopening, many jobs are likely to be lost forever.

However, the pandemic has also made many companies richer as people changed their consumption behaviors. Millions of people staying home have created opportunities for a number of businesses around the globe.

The popular games are the chickens laying golden eggs for game distributors during the pandemic. Activision Blizzard of the US said Call of Duty: Modern Warfare (released in September 2019) was the best seller compared to other Call of Duty series in the same period. This earned the company $1.52 billion in first-quarter revenue, up 21% year on year.

For Electronic Arts, headquartered in Redwood city, California, its first quarter revenue increased 12% compared to the same period last year. Popular games are FIFA, Madden NFL and The Sims 4. Like Activision, the firm has benefited from teh pandemic when people had to stay home and find entertainment ways.

A Japanese multinational consumer electronics and video game company, Nintendo recently announced its 2019 fiscal year earnings growth of 41% - the highest in 9 years. The company’s first-quarter profit was also three times higher than the last quarter of last year. The sales were driven by Animal Crossing: New Horizons - with over 13 million videos sold in the first 6 weeks. Nintendo Switch, a handheld video game console developed by Nintendo, also sold over 21 million units in fiscal 2019.

Covid-19 has also hiked the demand for cleaning solutions. The main beneficiaries are the world's leading manufacturers - Clorox and Reckitt Benckiser.

Last week, Clorox of the US said its revenue increased by 15% in the first quarter. Particularly, a 32% climb was seen in cleaner segment.

Reckitt Benckiser – a British company famous for Lysol aerosol and Dettol disinfectant solutions also achieved record sales. Its first quarter revenue rose by 13.5%. According to research firm Nielsen, in March and April, sales of disinfectant products skyrocketed by 230% and multi-purpose cleaning solutions soared 109% over the same period last year.

On May 6, Peloton, an American home gym equipment producer, announced that its first quarter revenue surged by 66%. The number of members registering on the app increased by 30%. The company has also raised its forecast of business results this year, with expectations that demand will not decline in the short term.

The increased demand for essential household goods and food has benefited the largest grocery retailers in the US. Publix, an American supermarket chain headquartered in Lakeland, Florida said its first quarter sales hiked 10% to $1 billion. At Kroger, also based in the US, sales of stores that had opened at least for a year increased by 30% in March. The best-selling items are canned meals, detergents and paper.

On May 5, Los Angeles-based vegetarian meat company Beyond Meat said its revenue more than doubled in the first quarter as compared to the same period last year, reaching $97.1 million.

Beyond Meat CEO Ethan Brown said this was a more-than-expected result. Particularly in the US, its retail sales soared 157% year on year.

The American multinational conglomerate 3M said the pandemic led to a surging demand for personal protective products, such as clothing or N95 masks. Its first-quarter revenue increased nearly 3% to $8.08 billion. Especially, the 21 percent and 4.6 percent rises were seen in the health and consumer goods segments, respectively.

When the majority of workers worked from home, the demand for home decoration also increased. Sales of Wayfair, an American e-commerce company that sells furniture and home-goods, in the first quarter therefore went up 20% over the same period last year. The number of orders has risen sharply, and customers often placed many orders, it said, adding total orders increased by 21% to 9.9 million.

Overstock, an internet retailer based in Utah, also said its April retail sales were up 120% year-on-year. The strongest rise was recorded in the "furniture" segment.

For those who have to work remotely, online communication software like Slack and Zoom have recently become too familiar. Slack Technologies, an international software company founded in 2009 in Canada, said it had an additional 9,000 new customers in February and March, up 80% from the previous quarter. Not only more users, the number of messages a person sends each day has also surged by 20% globally.

Meanwhile, in late April, California-based Zoom Video Communications, Inc. said it held video conferences for about 300 million people every day. Earlier, Zoom said it had reached 200 million people to attend its meetings in March. Its shares were up 120% this year.

(ASIA PACIFIC DAILY)