Companies That Will Win or Lose Due to Coronavirus
Every major change creates winners and losers . For example, if there’s an electricity shortage, companies that make generators will benefit. And COVID-19 is a seismic shock. So let’s see which kind of companies will win, or lose.
What kind of companies will win?
- Any communication tool, like video chat or messaging.
- Any organisation tool, like Trello.
- Any cloud service, like OneDrive.
- Virtual versions of physical products, like a virtual whiteboarding service, instead of gathering around a physical whiteboard.
- Virtual versions of physical services, like online colleges instead of physical ones. Or a bank where you don’t need to visit a branch, or have the salesperson visit you, any more than you visit a Google branch to open a Gmail account.
- Any situation where instead of you going to a business, they come to you. For example, a courier app where you press a button to have a guy come by for a pickup. Or an app that lets you find an instructor to teach you yoga at home instead you going to a “studio”.
- Any company that helps legacy companies reinvent their businesses, as with the bank example above. This has been dubbed “digital transformation”.
- Payment apps.
- Internet infrastructure, and supporting equipment like modems and routers.
- Home office equipment like desks, computer chairs, big high-resolution monitors, etc.
- Budget brands in any market, because people will have less money and less confidence in spending it.
- Online-to-offline products. For example, say I want to buy the new iPhone SE, and want it in two hours. This might be because I’m excited and can’t wait, or I want it before traveling, or it’s a last-minute gift for a loved one. In any case, why can’t I press a button in an app, and have the nearest shop deliver it to me in two hours, faster than Amazon, which delivers only tomorrow?
- Any counter-cyclical company, like insurance. As another example, a friend of mine who’s a financial advisor told me more people want his services now.
What kind of companies will lose?
- Any luxury brand.
- Any service that lets you go out and do something, like Google Maps, vacation planners, vehicle rentals (whether with a driver, like Uber, or without, like Yulu).
- Any business that lets you do something by going somewhere which you could just as well do online.
- Procyclical sectors like automotive.
The list of companies that will lose is shorter than the ones that will win. Does that mean more companies will win than lose? No, after all, we’re in a downturn. It just means that companies that are not on either list will lose: the default expectation in a downturn is that companies lose.
 Of course, this assumes the world economy doesn’t completely collapse.