There is no doubt that we’ll be doing business differently when the world is being changed permanently due to the novel coronavirus. Supply chain disruptions are already taking place at a massive scale with borders being closed down. In the short term, there is some massive erosion in terms of value. We can see this with the value erosion in markets around the world with very limited examples of businesses and value thriving.
However, this said Baron Rothschild, an 18th-century British nobleman and member of the Rothschild banking family (one of the most successful family business to date), is credited with saying that, “the time to buy is when there’s blood in the streets.”
While most businesses are taking massive hits during this period, some business models will do excitedly well during this time of change. Also for cashed-up businesses and investors, there has never been a better moment to buy, anything from real estate, art to technology companies. One thing is absolutely for certain, the way we do business will absolutely change and it will most likely be for the best.
Below are some thoughts on how business is expected to change due to the novel coronavirus. Here’s a list of changes to expect in the short to medium term and how one can take advantage of them.
Working from Home
Given the current context and risk, businesses will be pushed to make changes that will get people to work from home. There will be an optimization of working hours and more meetings will go on the cloud. Already, we’re seeing a huge drive for meetings to happen virtually. In turn, companies such as Zoom (online meetings app and desktop) have seen their value skyrocket.
Thus, technologies that help in the process of optimizing virtual meetings will do very well. This will also include companies locally, such as Dialog, Hutch, Mobitel, and other telecom operations, as Internet consumption will set to increase in the short term as well.
There will be a learning curve here, as businesses will need to learn how to manage staff members remotely. However, necessity breeds change and this will happen. Which would mean eventually a re-drawing of how business is done.
Winners: Technology companies, digitally-driven banks, Fin-tech, data and service providers.
Losers: Real estate companies (commercial), transport services.
Online shopping will be the new normal
Online shopping will see a surge in demand, especially in the area of FMCG’s. We are now witnessing an absolute explosion in online purchases with the lock-downs happening globally. This is a significant shift from consumers buying products only because of a steep discount. As such, companies like Amazon are hiring a massive number of employees to keep up with the demand.
However, to grow in this sphere during this period one needs 3 main components. These components are supply-side support, technology, and logistics. Companies with very strong supply-side support such as supermarket chains will do excitedly well as long as they have a good technology for front end and back-end to handle the demand.
Winners: eCommerce players, technology-driven retailers, last-mile delivery companies
Losers: Brick and mortar stores reliant on foot-fall
Self-sufficiency in terms of supply-side
In the period following the novel coronavirus outbreak, there will likely be a push by governments to be more self-sufficient in terms of products that are consumed locally. As we see the closing of borders, serious supply-side issues are being raised. Therefore, countries will want to be more self-sufficient in the future.
Winners: SMEs and farmers
Losers: Importers and Traders
In the end, change is inevitable
In summarizing, it can be noted that this is an incredible Black Swan event. One that is currently having massive negative consequences, in terms of the human as well as economic cost. This being said, as this affects the globe no one could escape from the reality or new world order that will be created as a consequence of it. There is little choice but to look to the future so that we can invest and prepare for it.