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The COVID-19 pandemic has shaken the lives and economy of the entire world with its influence on our culture and thinking likely to last for years ahead. We have witnessed a striking change in the way of living today as a result of various lockdowns, businesses shutting down and consumers confined to their homes. The damage caused by COVID -19 is not confined to a selected number of businesses but it is a malady that is expected to keep the economy sick for a longer time. Sectors such as aviation, tourism and hospitality, and real estate are a few that are severely affected by the pandemic. While the magnitude of the impact varies from industry to industry, some sectors are benefiting from the “corona-virus economy” as more people stay at home during the outbreak.
Social distancing is a precaution that has changed the way of interaction and communication among people. Consequently, the demand for commodities has changed many folds. It is the best time to invest in certain industries that appear to be doing extremely well in the current situation.
One of the most obvious impacts of stay at home regime is the spike in online buying. From clothes to electronic devices and from groceries to disinfectants, everything is available at just one click. The long-term trend of e-commerce has picked up the pace over the past few months of the lockdown. Experienced shoppers have discovered new sites to explore and new things to pick online while consumers who earlier preferred physically buying stuff are getting more comfortable purchasing them online due to lower prices, convenience, and wider choice.
Anything available to order online is doing good in this process. Sellers who already had a strong online base are performing well while others are slowly establishing themselves online to stay in the business. As people are forced to stay at home, they are heavily relying on online deliveries from shipping giant Amazon more than ever. Alibaba is another top pick in the e-commerce space. E-commerce embodies a concept for doing business online, incorporating a multitude of different services e.g., making online payments, online shopping, etc. Online payment methods have also become popular during this time as people avoid physical contact. All over, the e-commerce industry offers a compelling opportunity to invest in during the pandemic and is expected to do well in the long run.
Companies involved in software or 5G as in “fifth - generation” - cellular networks could make for good investments during the pandemic phase. Even after the pandemic is passed, as people and businesses shift their thinking more towards remote working, including video conferencing, this industry could remain a solid hold. Due to the COVID-19 outbreak, more employees are forced to work from home leading to an enormous hike in the use of technology. Companies with the majority of their employees at home now use remote conferencing services in high demand, like Zoom Video Communications ( ZM), Microsoft Teams as a communication and collaboration platform. Other tech sectors positioned well include online streaming and video games , as people find ways to occupy their time at home. Streaming services like Netflix, Amazon prime stand out to benefit due to increased demand from people amid social distancing guidelines and stay at home orders. The increased demand for technology in the past few months makes IT industry a great option to invest in. Even after the situation is improved, people could continue to use the video conferencing and meeting platforms for the sake of ease of business.
The consumer staple sector is comprised of companies that produce and sell items considered essential for everyday use. These include household goods, food, beverages, hygiene products, and other items that individuals are either unwilling or unable to eliminate from their budgets even in times of financial trouble. As a result, these companies are viewed as non-cyclical and able to maintain stable growth regardless of the state of the economy. This health crisis has changed the way consumers will behave and we see that safety and security are now of utmost importance. For example, if a person’s preferred mode of transport before the crises was public transport or cab, he will now consider buying a two-wheeler or a four-wheeler to ensure his family’s safety. Similarly, companies selling consumer durable goods needed to stay fed and clean such as HUL and ITC, are performing well in the market.
Several brokerages and analysts believe that this pandemic will bring about a change in the Indian mindset and push people to pay more attention to the protection of life against unforeseen threats. The COVID -19 outbreak has made life insurers a direct beneficiary in this case. Due to this pandemic, there is a greater awareness as well as concern among people about their health and more of them will be inclined towards buying insurance as a protection measure for their family. Other than health insurance, virtual health care is, which facilitates digital doctor visits for remote patients, is also gaining popularity. As the world practices social distancing, health care facilities at home are much preferred. Therefore, investing in this sector will yield positive results in the future.
In the times of crisis, it is imperative to invest wisely to keep your head above water. Investing in IT, Consumer Staple, E-commerce and Health Care industries will prove to be effective as these are the major beneficiaries of the current situation. The social and economic conditions are transformed after a pandemic and consumer behavior and expectations alter. Those looking for a valuable investment must understand this changed scenario of the market and invest accordingly.
The COVID - 19 pandemic will eventually come to an end and when that happens, the business landscape will change again. Some industries will continue to thrive and some may fold in a few months as a result of the post- crises problems that they did not anticipate earlier. In order to survive this pandemic, business owners should understand that this crises will have a long term impact on the business and accordingly, they must actively work towards developing future- facing strategies.