August 7, 2020
While people and governments around the world are still getting used to new rules required to abide due to the COVID-19 pandemic, the global economy continues to suffer the negative consequences of lockdowns.
According to the International Monetary Fund, the effect on the economic activity in the first half of 2020 was harsher than expected. As of June, this year’s global economic growth index was forecasted to go down to -4.9%, which is 1.9 percentage points below the April forecast. The US economic growth index in 2020 is expected to be at a -8% rate, with Europe at -10.2%. The worst growth rates are expected in France (-12.5%), Italy (-12.8%), and Spain (-12.8%).
Manufacturing, travel and transportation, retail, and energy & resources were affected the most, with their operations, supply chains, personnel, and revenue suffering from the tremendous impact of the pandemic.
All these industries have demonstrated the lockdown vulnerability scenario. And helping them out by providing discounts for services or loans might be a good strategy for banks and FinTech companies if they are capable of doing so. Remember that your support can become their stepping stone to get back to the pre-crisis operation volume. For instance, Genome, a Lithuanian FinTech company, has canceled monthly fees and is offering free business & merchant account openings for all low-risk companies so that educational platforms, food services, electronic goods, entertainment systems, etc., could have fewer worries during these uncertain times.
Still, some businesses have shifted to be essential or embraced the situation and turned it around to their advantage.
This one is quite predictable as physical stores were temporarily shut down at the lockdown’s early stages, with people still being cautious of visiting crowded areas. According to the latest reports, the global e-commerce market will bring a total of $2,405 billion, compared to $1,808 billion in 2019.
The interest in online shopping peaked in April, as year-over-year growth for order count reached 96% compared to April 2019. Some retail shops started opening in June, and the number of orders somewhat dropped, but a year-over-year order count was still up by 57% compared to June 2019. Also, a second global wave of the Coronavirus pandemic is a strong possibility, with South Korea already experiencing it. Thus, lockdown measures might be enforced again.
As for consumers’ demands from March till June, the top orders were sporting goods, toys & games, hardware, educational & financial services, food, work safety gear, and medical products. In July, top product trends included home improvement products, household appliances, and equipment for sports and hobbies. So pay attention to companies working within these sectors.
Watching movies became one of the few entertainment options for people trapped under the lockdown. American streaming industry’s sales saw a year-over-year growth of 47% this April. Europeans also grew more accustomed to streaming services, with Netflix agreeing to reduce streaming bitrate by 25% to avoid the over-saturation of telecoms infrastructure, as the demand for videos is high.
And we can’t be sure that the cinema-going experience will be the same as before the pandemic. Movie tickets will become pricey due to cinemas’ massive losses in revenue and the implementation of safety precautions in movie theaters. And keep in mind that not all people would want to risk visiting cinemas and are steering away from crowded places.
Some new movies even shifted to straight-to-digital: as some cinemas are still closed, films are now premiering on streaming platforms, thereby becoming more accessible to viewers.
The need for fast and accessible information peaked during the pandemic, prompting users to go to their social media of choice. A global survey showed that people browse the internet 70% more than before, with WhatsApp and Facebook seeing a 40% and 37% increase in usage accordingly.
Social media once again claims a primer spot for sharing news and discussing the latest events and happenings. Not to mention, this allows people to maintain social distancing while being able to communicate.
These have proven to be useful for both children and adults. The former can find convenient and accessible courses that will fill the gaps in their knowledge since not all schools can organize a substantial learning capacity for the online learning experience. Remember, over 1.5 billion students were affected by COVID-19. As of August 1, this figure reduced to 1 billion with 106 country-wide school closures.
Meanwhile, the latter can pick up a new skill, especially if they want to expand their job possibilities after being laid off from a previous workplace. Not to mention, learning a new skill may relieve stress.
As the next logical step in reducing the unnecessary contacts, companies that produce contactless technologies might get more clients in upcoming months as restaurants, hotels, office buildings, and other public places will need these technologies to ensure people’s safety. If the global contactless payment market is estimated to be at $10.3 billion in 2020, it may reach $18.0 billion in five years just like that.
Because of the pandemic and subsequent lockdowns, these industries were heavily used among consumers, adapted quickly, and will benefit from the circumstances. So, if your banking institution or FinTech company is considering attracting new clients, keep an eye on these industries and take notes.