The COVID-19 pandemic is considerably affecting both society and economy. This pandemic will not only increase poverty, inequalities and unemployment but also widen the gaps among vulnerable groups across the global.
Its impact will vary from country to country, but in developing countries it’s already visible in their socio-economic indices.
During the lockdowns/shutdowns, most of the developed and developing countries’ economies have already shrunk, which means their economies have entered the deepest recession on record and surpassed the Global Financial Crisis (GFC) of 2008 in terms of unemployment rates.
Most industries have severely been hit by this pandemic, especially tourism, advertising, airlines, private companies and other small businesses.
But there are some industries that are thriving during this pandemic.
Amazon:
In a matter of weeks, COVID-19 has dramatically disrupted the U.S. retail industry, as states issued shelter-in-place orders and non-essential businesses were forced to shutter their doors.
In an analysis of Feedvisor customer sales data, predominantly across Amazon’s and Walmart’s U.S. marketplaces, the COVID-19 impact on ecommerce is undeniable.
Grocery and Gourmet, for instance, which has historically been slow to penetrate ecommerce, is up 37% since 3 February, 2020.
Beauty and Personal Care and Electronics have also seen sales increases of 17% and 3% respectively.
Although since 3 February, Clothing, Shoes and Jewelry is down 11% and Home and Kitchen is flat at 0%.
With physical store shelves low on stock and consumers avoiding in person interactions, COVID19 has expedited consumers’ adoption of online shopping and will likely leave a long lasting effect on the e-commerce industry moving forward.
Key Dates and Their Impact on Marketplace Sales:
While ripple effects of the COVID-19 crisis began trickling into online U.S. marketplaces in early February — as China’s manufacturing industry came to a halt, causing significant supply chain challenges — category sales on the marketplace remained generally stable until mid-March.
On March 11, the World Health Organization (WHO) declared COVID-19 a global pandemic, triggering a drastic shift in consumer purchase behaviour.
For the week ending March 15, sales for Beauty and Personal Care, Electronics, and Grocery and Gourmet were up 50%, 13% and 66% respectively, compared to the week ending 9 February.
Indeed, the WHOs announcement initiated a spike in online shopping and consumers flocked to online marketplaces to stock up on needed items including hand sanitizer, food and electronics to prepare for sheltering in place and working from home.
In response to the substantial spike in orders related to COVID-19 demand, Amazon on 17 March suspended shipments of non-essential products to its FBA fulfillment centers for its U.S. and EU markets.
For the week ending 22 March, marketplace sales of essential categories Beauty and Personal Care, and Grocery and Gourmet were up 38% and 77% respectively, compared to sales over the week ending 3 February, while nonessential categories took a hit. Clothing, Shoes and Jewelry, for instance, saw sales decline 27% over the same period.
On 27 March, Amazon broadened the list of products deemed as essential, enabling sales growth in categories that had largely been left at a standstill.
Over the week ending 5 April, marketplace sales of Electronics were up 18% compared to the week ending 9 February, while Grocery and Gourmet, and Beauty and Personal Care were up 77% and 24% respectively over the same period.
Final Thoughts:
The role of ecommerce — and marketplaces such as Amazon and Walmart, specifically — has never been more critical and we expect the accelerated adoption of online shopping to have a positive impact on marketplaces in the long run.
As supply chains and e-commerce fulfillment operations slowly improve, we can expect to see sales trends continue to positively shift across key Amazon categories.
Netflix:
If the coronavirus pandemic has proven anything it’s Americans’ insatiable appetite for Netflix Inc.
Some latest Major Effects on Netflix :
- 85% of U.S. streaming subscribers subscribe to Netflix.
- 5 million U.K. households subscribe to Netflix.
- Total Netflix 2019 revenue is $20.2 billion, recent Netflix market cap is $166 billion
Viewership of the streaming service has soared since shelter-in-place orders swept the country in March.
In April, Netflix reported the addition of a record 15.77 million paid subscribers globally in the first quarter — double the new subscribers it expected — propelling its stock price more than 65% higher.
Netflix reported the addition of 15.77 million paid subscribers globally in the first quarter. Netflix’s biggest quarter for paid net additions to its subscriber total previously was 9.6 million in the year-ago quarter, according to FactSet.
Analysts were looking at global paid streaming subscriber additions of 8.22 million on average, according to FactSet, after Netflix projected 7 million new subscribers three months ago.
Netflix reported first-quarter earnings of $709 million, or $1.57 a share, compared with $344 million, or 76 cents a share in the year-ago period.
Revenue grew to $5.77 billion from $4.52 billion in the year-ago period. Analysts surveyed by FactSet had estimated $1.64 a share on revenue of $5.75 billion on average.
Netflix leads a pack of media heavyweights that include Disney, Apple Inc’s Apple TV+, Amazon’s Prime Video, AT&T Inc’s HBO Max, and Comcast Corp’s Peacock.
One advantage it enjoys is fierce loyalty among customers, according to a poll cited by Cowen. Those who said they are willing to pay more for Netflix rose from 47% in December to 55% in May. Of those who watch Netflix more than seven hours a week, 60% said they were willing to pay more in May, compared to 52% in December.
The financial effects:
Revenue: Analysts on average expect Netflix to report $6.08 billion in second-quarter revenue, according to FactSet, up slightly from $5.96 billion expected at the end of 2019.
Paid net additions of subscribers, a key indicator of Netflix’s sales, are projected at 8.22 million, roughly double what was expected earlier this year and ahead of the company’s own projection of 7.5 million.
Earnings: Average analyst expectations from FactSet are for earnings of $1.82 a share, up from $1.48 a share at the beginning of the year.
Stock movement: Through Wednesday, shares are up 62% in 2020, with most of the gains coming since mid-March and the cancellation of nearly all live-entertainment events because of COVID-19.
At a market value of $226.5 billion, Netflix passed Verizon Communications Inc on Thursday, and AT&T for the first time on 1 July.
Netflix’s value is more than that of Disney and Comcast.
What the company is saying:
30 June: Citing “centuries long financial gap between Black and white families” in the U.S., Netflix said it plans to put 2% of its cash holdings, or up to $100 million initially, toward financial institutions and other groups “that directly support Black communities in the U.S”.
21 April: Netflix wowed Wall Street with its biggest quarter and a record number of new paid subscribers, nearly 16 million.
Revenue grew to $5.77 billion from $4.52 billion in the year-ago period. The news sent Netflix shares soaring 9% in extended trading.
Zoom:
Zoom has reported a 169% year-on-year jump in revenue after the global shift to remote working led to a surge in customers.
Zoom has become a household name in recent months as millions of people staying at home during the Covid-19 pandemic have turned to video conferencing for work and connecting with loved ones.
Now, the company has published its Q1 earnings for the 2021 fiscal year, highlighting the impact that this shift has had on its finances.
Zoom’s revenues jumped by 169% year on year to $328.2m. Cash flow for the quarter totalled $259m, compared with $22.2m this time last year. Meanwhile, free cash flow was $257.1m, compared to $15.3m a year ago.
Approximately 265,400 of its paying customers were companies with more than 10 employees, representing a 354% jump on the same quarter last year. There were also 769 customers contributing more than $100,000 in the previous 12 months, a figure that was up by 90%.
Overall, Zoom’s net income was $27m in Q1, up from just $200,000 this time last year.
However, the company’s gross margin fell from 80% to 68% year on year. This means that while the number of paying customers has increased, the amount Zoom needs to spend to keep the growing number of free accounts operating on the platform is eating into its margins.
Looking to the next quarter, Zoom is expecting revenues to rise to between $495m and $500m, with operational income of between $130m and $135m. For the full fiscal year, the firm expects to earn revenue of between $1.775bn and $1.8bn.
Zoom’s growth continues unabated as more people are turning towards the service to keep connected during the ongoing coronavirus pandemic.
British lawmakers even broke from 700 years of tradition in the Houses of Parliament yesterday by introducing Zoom-powered video links. 120 Members of Parliament can join through a Zoom call, while another 50 are allowed to be physically present in the chamber.