The world economy is collapsing. Every country is in some form of lockdown. Industries are crumbling. Why? Because the shutdowns literally killed “demand” overnight.
There are many questions on everybody’s mind – when will we see recovery? Will we ever see recovery? Which industries will survive this downturn?
Before we answer these questions, it is important to remember that the same questions were on people’s minds during the Great Depression of the 1930s and the Global Financial Crisis of 2008/9. Yet, years after that, life returned to normalcy. Hence, we should be confident that recovery would come. The questions is when and what sectors would boom.
It is interesting to note that Jeff Bezo’s wealth grew as a result of a surge in online business during the Covid-19 crisis. And we know his wealth came mainly from Amazon.
Likewise, his technology peers also increased their wealth. For example, ZOOM and similar technology companies also benefited in increased usage during this period.
In other words, companies with products and services that support a digitalised world will survive.
For example, while banks had to shut their physical branches, a spike in cashless transactions was seen. (See article below). This is because consumers had no choice but to use cashless alternatives when they purchased goods & services online. Will consumers return to the use of cash after this crisis? Personally, I think not. Why? Because they would have been used to cashless transactions and would likely be cautious of the bacterial that could be transmitted via cash.
As such, traditional banks will not survive if they do not have a digitalised process to serve their customers.
This extends to other sectors as well. It is a fact that companies who had not digitalised their value-chain were generally hard-hit during this crisis. And if they were not quick in transforming in the last 1 month, it is likely that they may not survive.
The other sectors that will survive during this crisis would be those that provide essential products & services. These firms would have continued to operate even during the shutdown period, even though their services may have been delivered slightly differently.
This includes sectors such as groceries, manufacturers of biotech & medical products, healthcare, etc. They may be affected in some way, but by and large, they should survive the downturn.
There are some sectors providing essential services that may find themselves in a new world even after the Covid-19 crisis. For example, even though transportation is essential, it may take a different form. There may be eg. Distancing measures that have to be put in place, permanently or otherwise, etc. Just how will they adapt to the post-Covid-19 era is anyone’s guess. Whatever it is, the future will be quite different and one thing is sure – the Future is Digital!