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Invezz looks at the Top 11 industries positively affected by COVID-19

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  • Microsoft Groups reported a brand new every day document of two.7 billion assembly minutes in April, a rise of 200%
  • With Prada and Gucci tapping into face masks, the market is projected to rise by 53% from 2020 to 2027
  • Meal equipment market is now predicted to develop by 17.78% in 2020, with Hiya Recent and Gousto main the best way

In weeks our world was reworked. Rest room paper turned extremely coveted, gross sales of hand sanitizers skyrocketed, and material face masks turned essential accent. A number of industries have sprung up in a single day due to the COVID-19 pandemic. In the meantime, present industries that helped us acclimatise to our new “Keep at House” actuality boomed – like meal kits, video conferencing and gaming.

With this in thoughts, what industries have thrived within the face of COVID-19 and what can be good investments to make throughout the disaster?


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1. Books

With social lives on maintain, many individuals checked out other ways to occupy their time. Because of this, sales of fiction rose by a 3rd throughout lockdown. Homeschooling additionally prompted a rise in gross sales, with kids’s schooling books rising by 234% to the third-highest stage on document.

As anticipated, Amazon did significantly nicely with this surge, with subscription-related income (resembling Kindle) rising to $5.6 billion in Q1 (a year-over-year quarter of development). Different retailers additionally benefited, with Rakuten Kobo reporting a lift in new sign-ups and purchases and Draft2Digital reporting a 25% improve in book gross sales. Though it is a constructive signal for the sector, it’s nonetheless largely dominated by Amazon (holding 83% of U.S. e-book gross sales) with unbiased booksellers and smaller firms jostling for the remaining. The market alternative right here, due to this fact, is restricted going ahead.

2. In-home espresso market

Because of stay-at-home orders, 80% of coffee shops had been closed all through lockdown, inflicting a increase in espresso gross sales for residence use. COVID-19 has accelerated the market development for fast espresso to a CAGR of over 5%. In April 2020, Nestle reported its strongest quarterly gross sales development in 5 years.

Espresso consumption has additionally risen due to lockdown, with individuals pre-COVID ingesting a median of 2.45 cups a day. Now, it’s nearer to 2.8 cups.

Will probably be fascinating to see how this adjustments as workplaces start to re-open. The vast majority of employees (57%), nevertheless, don’t want to return full-time to workplaces and this can be mirrored in continued working-from-home and at-home espresso consumption. The development in direction of residence use coffees, due to this fact, might proceed for lengthy after the pandemic ends. Reports additionally recommend customers are shifting in direction of extra area of interest espresso producers and direct e-commerce gross sales with unbiased producers, mirroring the general shift in direction of native retailers and producers. With this in thoughts, there’s a clear market alternative for companies and traders who can supply an outlined, distinctive espresso product.

3. Esports and gaming

The pandemic prompted widespread disruption to in-person sports activities, inflicting many conventional sports activities suppliers to re-think their fashions. For instance, a digital model of the Australian Grand Prix, ‘Not The Aus GP’ noticed skilled Method One drivers race towards skilled avid gamers, with the digital occasion streamed on YouTube and Twitch.

Gaming site visitors, as a complete, rose by 75% throughout peak hours. Recreation streaming platforms like Twitch, YouTube Gaming, and Fb Gaming all reported vital development of 20% throughout utilization hours. One leisure firm, Trendy Occasions Group, expects a 25-35% improve in income in H1 in its esports vertical.

Forecasted and reported year-on-year income change of Trendy Occasions Group’s (MTG) eSports verticle

Forecasted and reported year-on-year income change of Trendy Occasions Group’s (MTG) eSports vertical due the coronavirus pandemic in 1st quartal 2020 and 1st half 2020

With esports and gaming streaming attracting extra followers (and income) earlier than the pandemic, the expansion of the business will undoubtedly proceed far into the longer term. Traders would do nicely to discover this sector now, whereas nonetheless in relative infancy, particularly as a result of involvement by massive in-person sports activities organisers may have accelerated adoption with mainstream audiences.   

4. House fitness center & train gear

Gyms and health courses shutdown due to COVID-19, main many individuals to spend money on at-home train and sports activities gear. Consequently, on-line train retailers Bestgymequipment.co.uk noticed development of 183%, alongside Mirafit.co.uk at 113%. On-line health courses additionally boomed, with the Les Mills on-line platform seeing an increase of 900% in sign-ups.

With public transport providers reduce for the foreseeable future, options like bicycles and e-scooters turned common. The bicycle market will develop by 3.74% in 2020 because of this, and 45% of London commuters are contemplating utilizing e-scooters to journey across the metropolis sooner or later.

escooters

(supply: https://www.ft.com/content/5559f016-1f9f-4fab-9020-71e69c6debc3)

Given the dual-pressures of social distancing (and related declines in public transport utilization) and local weather change (which is turning into a spotlight level once more as we shift into restoration), anticipate to see extra eco-friendly types of transport turn out to be commonplace over the approaching years. The market alternative right here can be massive and, for now, nonetheless comparatively untapped. Likewise, the UK Authorities’s drive to scale back weight problems will renew deal with train suppliers and options resembling on-line courses and residential gyms.

5. Luxurious & customised face masks

Face masks have come to symbolise our new actuality. The market worth for disposable face masks at present stands at $74.90 billion and is projected to rise at a CAGR of 53% from 2020 to 2027. Tapping into this new profitable market, Prada, Gucci and Balenciaga are actually producing designer face masks and MaskClub.com has been launched, providing a $9.99-a-month masks subscription.

Time will inform whether or not the sporting of face masks can be an ongoing alternative or a short-term development. After the SARS epidemic, Asian customers continued to wear masks. The SARS epidemic predominately affected Asia. With Covid-19 being a pandemic, it wouldn’t be unreasonable to see many worldwide areas following the Asian market’s lead on this house.

Supply: United Kingdom; YouGov on-line survey; Imperial School London; Might 11 to Might 17, 2020

6. Backyard gear

With (public) outside time restricted to at least one hour a day within the UK, customers flocked to on-line backyard and {hardware} shops to enhance their dwelling areas earlier within the yr. DIY tasks proved common, together with garden pubs and treehouses. Plant, seed, and bulb gross sales rose by 48.2% year-on-year throughout lockdown, paint by 47.1%, and constructing supplies by 31.4%. Backyard retailers reported a 25% week-on-week improve in Web gross sales.

Typically talking, gross sales of residence enchancment and gardening gear can climate many uncertainties – individuals will all the time must patch-up their houses and make dwelling areas extra comfy. Notably if spending extra time at residence because of work, financial causes, or self-isolation. For traders, development will not be as meteoric as some sectors, however it’s a comparatively secure guess.

7. Hand sanitiser

As issues grew in regards to the pandemic, hand sanitizer gross sales rose by 255% in February 2020. The demand noticed provides plummet and costs skyrocket by 367%.

Many drinks producers and breweries switched manufacturing handy sanitisers. The likes of Pernod Ricard, Brewdog and Absolut Vodka started making sanitiser. With an infection management front-of-mind for a lot of customers, the market will develop at a CAGR of 11.68% to hit a complete market dimension of US$2,548.984 million by 2025. This development is two-fold, customers have turn out to be extra conscious of the necessity to carry handy private healthcare gear with them. Concurrently, companies are investing in elevated sanitisation strategies together with hand gels positioned all through workplaces, to be able to hold their workers secure from an infection.

U.S. hand sanitizer market size

(supply: https://www.grandviewresearch.com/industry-analysis/hand-sanitizer-market)

The market is predicted to expertise substantial development over the approaching years because of the pandemic and elevated consciousness of well being hygiene. It additionally faucets into the rising demand for comfort merchandise that may lower an infection threat in massive, city areas.

8. Meal kits and on-line groceries

Meal kits like Hiya Recent and Gousto have turn out to be common whereas eating places had been closed. The market is now predicted to develop by 17.78% in 2020. Over half of consumers state that they’ve begun cooking extra and 46% have began baking. Grocery deliveries are additionally up, with customers spending 558.4% extra in April 2020 in comparison with April 2019.

Hunter_Coronavirus_Cooking

(supply: https://www.foodnavigator-usa.com/Article/2020/04/15/Survey-Cooking-at-home-will-become-the-new-normal-post-pandemic)

The shift to residence cooking is predicted to alter our grocery shopping for habits over the long-term with extra individuals cooking from scratch and consuming healthily. 72% of customers state they are going to make larger makes an attempt to eat and drink healthily sooner or later, and make extra time for wholesome home-cooking.

Traders and entrepreneurs which might be taking a look at this sector would do nicely to bear this in thoughts and search out companies that meet this demand for wholesome, nutritious and handy meals – organic and plant-based foods are two niches which might be rising in recognition because of their ‘wholesome’ reputations.

9. Instantaneous messaging and video conferencing

With places of work relocating to at-home working, there was a meteoric rise in instantaneous messaging and video conferencing.

Zoom went from relative obscurity to turning into the communication software of selection for a lot of companies, governments, and even the UK’s royal family. Downloads of the software program peaked at 2.13 million in March 2020 (in comparison with 56,000 in January 2020). Every day assembly contributors rose from 10 million in December 2019 to over 300 million in April 2020. With that, Zoom’s income is predicted to develop by 200% and its revenue by 300%.

Likewise, Microsoft Groups reported a brand new every day document of 2.7 billion assembly minutes in April, a rise of 200% in comparison with the 900 million minutes it recorded on March sixteenth. Slack grew to 10 million ‘concurrently related’ customers in March 2020 (up from 1 million in 2015) after which to 12.5 million two weeks later. Its monetary yr 2020 complete income rose 57% year-on-year to succeed in $630.4 million.

Supply: Statista, 2020

This development will proceed, provided that many individuals are nonetheless working from residence for the foreseeable future (and plenty of want to proceed past that). Such communication instruments will also be used to scale back reliance on enterprise journey and proceed to work globally. Nevertheless, with the likes of Slack, Zoom and Microsoft Groups dominating the market, the funding alternatives for smaller firms can be restricted.

10. Leisure streaming providers

Searching for leisure at residence, many customers turned to video, music and gaming streaming. 39% are listening to extra music streaming and 35% are enjoying extra laptop and video video games. Gross sales of streaming containers are up 39% and good TVs by 60%.

Tapping into this, artists resembling Luke Combs, John Legend and Yungblud are flocking to on-line streaming. Production companies are additionally streaming motion pictures together with Onward and Emma straight to residence providers (as cinemas stay largely shut). The digital actuality (VR) market has additionally experienced a increase as home-bound individuals sought new methods to entertain themselves. The COVID-19 pandemic might nicely show to be the catalyst that VR wanted to turn out to be mainstream.

For traders on the lookout for alternatives on this sector, there are a number of to select from. Video, music and gaming streaming are fast-growing areas, now accelerated by the pandemic, nevertheless they’re dominated by Spotify, YouTube and different massive gamers. {Hardware} that permits at-home leisure is one other avenue. Lastly, VR provides a profitable alternative as an business that, till now, has stay somewhat area of interest. Because it grows its mainstream attraction, there’ll be ample alternatives for savvy companies and traders to make their mark.

11. Staycations

Lingering issues in regards to the security of abroad journey (plus the monetary viability of journey firms) has led to a staycation craze. Many people have determined to not journey internationally till a COVID-19 vaccine is broadly accessible.

Searches for ‘journey UK’ noticed a 103% increase in July 2020 in comparison with July 2019. Parkdean Resorts predicts the post-COVID staycation market can be price £8.246 billion.

Curiously, this may increasingly turn out to be a persistent development sooner or later as issues about local weather change dominate. 30% of 25-49-year-olds saying they’ll swap a world vacation for a staycation to scale back their environmental impression. It is a sector price exploring, due to this fact, for longer-term good points. Because the local weather disaster turns into a spotlight level once more, taking a staycation could also be seen as the moral and sustainable factor to do.

Trying ahead

COVID-19 has essentially altered our lives and quite a few companies have surfaced to fulfill our new wants. However what’s going to occur as we proceed to emerge from lockdown and embrace our new regular?

Public well being issues will improve the urge for food for an infection management merchandise like face masks and hand sanitiser, in addition to different merchandise like contact tracing apps and thermal imaging cameras. Public concern about COVID-19 stays excessive at 75% in August (in comparison with 72% in June). Issues a couple of second wave proceed to prevail and trigger uncertainty – significantly with reference to native lockdowns and ever-changing air bridge agreements. Companies and traders should proceed to navigate this volatility, investing in processes that allow quick-pivoting and agility, till a vaccine or remedy turns into broadly accessible.

On that be aware, the world at massive is in a kind of stasis till a remedy or vaccine for the coronavirus is developed. Worldwide journey will proceed to be sporadic, work-from-home would be the default, and social distancing will restrict public gatherings and companies that depend on massive numbers on-site.

Distant working will possible proceed, as firms together with PwC, BP and Uber decide to residence working for at the least the subsequent yr. 57% of employees don’t need to return to their places of work. Subsequently, merchandise that assist distant employees’ productiveness and connectivity will proceed to do nicely.

Then there’s the worldwide recession to contemplate. The UK’s recession is deeper than the 2008-09 monetary disaster, the deindustrialisation of the 80s, and the oil shocks of the 70s. Nevertheless, there’s a silver lining. Half of CEOs had been already making ready for a downturn (since 2018) because of headwinds resembling Brexit. Nonetheless, options that assist individuals and companies have larger management over funds can be in demand as companies work by way of the complexities and challenges {that a} world recession will deliver. For now, it stays unsure whether or not the recession can be a ‘V’, an ‘L’ or a ‘swoosh’ – with hopes pinned on a V with a fast restoration time.

Finally, solely time will inform us what developments can be a 2020-wonder and what shopper behaviour has considerably modified. Our world goes by way of excessive change and this gained’t cease anytime quickly. However with such evolution comes alternative, for companies and their traders.


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