Whilst it’s clear that Coronavirus has been a net negative for the global economy, some companies and industries are doing well despite the pandemic.
The destructive effects of Coronavirus are clear; millions sick or ill, many more out of work and whole swathes of the economy unable to function effectively whilst the pandemic rages across the world. The travel industry, retail and hospitality, live events, restaurants and bars, beauty salons and hairdressers, road haulage, and many others industries are really suffering during the crisis. It’s unclear whether these industries will return to their normal levels even when a long-term solution to the pandemic is found.
However, the changes in behaviour that the pandemic has caused have benefitted some companies and industries. Online gambling is one of those industries to have benefitted with consumers spending more time than ever at home, on their digital devices, and needing to be entertained. Flutter.com – who own Betfair, Paddy Power and others have added over £10bn to their market cap during 2020 following their merger with the giant online poker business Stars Group.
In a similar vein, the games industry has also benefited from the increase in at home leisure time caused by the pandemic. For example Chinese gaming group NetEase added $17bn to its market cap during 2020 following a successful IPO on the Hong Kong stock exchange. Part of the reason why games and gambling companies have thrived is because they have purely software-based products that can be developed easily by employees working from home and consumed at home too. Online gaming provides a useful antidote to social distancing for many consumers. Chinese gaming behemoth Tencent added $93bn to its market cap during 2020. This has also had a knock-on positive effect on suppliers, with chip-maker Nvidia adding $83.3bn to its market cap.
Furthermore, many of the blue chip technology powerhouses have enhanced their value during 2020. Amazon is an unsurprising winner, adding a staggering $401.1bn to its market cap during 2020. Microsoft has added $269.9bn, Apple $219.1bn and Facebook $85.7bn to their already considerable valuations.
Changes in retail behaviour have also impacted the market, with Chinese firm Pinduoduo adding $52.2bn to its valuation as Chinese consumers increasingly bought goods from their smartphones. Shopify has also benefitted, adding a considerable $51.4bn to its market cap.
Just as the gaming industry has thrived, so has streaming with Netflix increasing its market cap by $55.1bn, and adding an extra 7m subscribers in Europe. Spotify also added $10.3bn to its market cap during 2020, showing impressive growth.
Another unsurprising winner were providers of videoconferencing technology, with Zoom having a highly impressive year, adding $47.9bn to its valuation. In April 2020, Zoom calls had over 300m particpants a day – a staggering statistic. Salesforce have also benefitted from the drive to digitise businesses in the wake of the pandemic, adding $19.1bn to their valuation. Digital payments business Adyen has also thrived given the rise in e-commerce sales, adding $19bn to its market cap. Lululemon has thrived during the pandemic as consumers increasingly exercise at home – with its valuation increasing by $9.3bn during 2020.
So whilst the overall economic picture is gloomy, there are some rays of light amidst all the negativity.