More recently, one could still be skeptical of the dangers of the Coronavirus and chuckle at endless news about it. To think that it will pass as unnoticed by the economy as a bird or swine flu.
As of 22 April, there have been reported more than 2.56 million Coronavirus cases. Coronavirus updates are appearing every day and so far, the number of infected is growing. Covid-19 updates are available online let alone COVID-19 symptoms and many have tried them on for the period of quarantine.
But today it is obvious that everyone will feel the impact of a pandemic. Even complete self-isolation will not save us from the political and economic consequences of global panic.
The crisis affected primarily offline business, areas for which the very mass and close contact with people are just needed. And all this is undesirable to prevent any viruses. Among the niches, which already suffering are:
- related to tourism and business trips (tour operators, airlines, hotels, hostels, etc.).
Firstly, it is difficult to move between countries. It is difficult to leave cities within one country because the exit and entrance are closed. Russia closed the border for foreigners until May 1. The EU has imposed a ban on all trips to its territory. The United States has banned entry from most European countries (and Americans must be quarantined for 14 days).
Secondly, one does not want to do domestic tourism. Trains, planes, train stations, buses, taxis – everywhere there is a risk of infection. Plus where to go if events are canceled everywhere and institutions are closed?
The US Treasury reported that the situation with the Coronavirus for airlines is worse than after the September 11 attacks.
Due to quarantine and losses, taxi drivers demand an increase in the fare. Passenger traffic decreased by 50% (since March 18, suburban passenger bus services have been banned in Ukraine, railway stations have been closed).
It turns out that there is less money from travelers, but you still need to pay salaries, for rent, maintenance, purchase of products, fuel, and lubricants, etc.
We observe that advertisers are already cutting the budget for such advertising campaigns or even stopping them.
- theaters, cinemas, musicians, event organizers (concerts, conferences, forums, etc.). Exhibitions, concerts of musical groups, theater performances, conferences, forums – are canceled or postponed indefinitely. The organizing committee of the St. Petersburg International Economic Forum (SPIEF) canceled the event in 2020 due to the Coronavirus.
Eurovision 2020 has been canceled
The conference “How to do the business against the backdrop of the Coronavirus”, which was supposed to be held in New York, had to be canceled … yes, because of it.
In order not to facilitate the transmission of viruses, and also because people are scared and try to leave their homes less, the authorities are taking restrictive measures that affect business in one way or another.
So, from March 18, in Moscow, events with the participation of more than 50 people were first banned, including film screenings, foreigners were prohibited from visiting museums and theaters, from March 21, schools and institutions of additional education (libraries, circles, sections, etc.) were closed, universities were transferred and open source software for distance learning and the next week was generally declared “non-working”.
The problem in this industry is the same as in the tourism business – tickets are not sold, but the costs of utility bills, rent, salaries, etc. remain. Moreover, investments in advertising and marketing become unprofitable and become unprofitable. Which is especially critical for those who were forced to cancel events at the very last moment.
- Catering facilities (cafes, bars, restaurants, fast-food chains, etc.). The Coronavirus mercilessly strikes at catering establishments: cafes, bars, restaurants, fast-food chains, etc. The main reason is the lack of demand. Well, and measures by the state.
France and Spain closed bars, restaurants, and shops (except grocery) due to the Coronavirus in mid-March.
Some of the restaurants in Moscow stopped working on March 18 (turnover in the restaurant business fell from 30 to 90%).
In the US capital, because of the Coronavirus, restaurants and bars were closed (food is allowed to be taken only for take-away). And since March 13, an emergency regime has been introduced throughout the country.
Plus, the authorities have strengthened the requirements for food service. The Ministry of Industry and Trade ordered to arrange tables and chairs at a distance of more than 1 m, to allow visitors only after washing their hands or processing with a disinfectant. There are also difficulties with the latter since a panic causes a shortage.
Now, among those who can earn still and even more:
Of course, some are likely to be able to earn more in connection with the pandemic and panic around it. For example:
In social networks, it is easy to find photos of empty shelves both abroad and in Russia. People begin to buy bulk necessities almost in bulk. Unlike the tourism or restaurant business, retailers have increased demand, therefore, you can earn more.
Retail chains in Russia record an increase in demand for essential goods.
The president of Belarus Lukashenko advises to “poison” the Coronavirus with vodka.
However, the panic tends to decrease, and besides, you cannot endlessly buy the same toilet paper or buckwheat.
Food delivery services
If restaurants, cafes, and bars close, restrict their work and suffer from a lack of visitors, then in the delivery sector, on the contrary, there is serious growth. The Coronavirus here is much less scary, especially if you choose the non-contact method – delivery to pedestals, or when the courier simply leaves the parcel at the door.
Delivery Club reported a threefold increase in restaurant interest in delivery. In Yandex.Food, similarly.
Russians began to order food more often at home amid Coronavirus.
Pharmacies and medical facilities
Together with food, the population buys antiseptics in pharmacies, as well as drugs for prevention and treatment … in total. It doesn’t matter whether they are effective or not, amid a panic you can spend money not quite rationally. Against this background, people are more interested in health and want to check themselves and loved ones for viruses. Therefore, not only pharmacies but also medical facilities can make good money.
Advertising and hype around the Coronavirus spurred Arbidol sales (in some pharmacy chains there was a double growth, and in some online pharmacies sales jumped 20 times).
On March 26, Hemotest began to pay for testing for Russians who wanted to be tested for coronavirus.
Yandex Taxi, in partnership with pharmacy chains and pharmaceutical companies, launches the remote sale and delivery of OTC drugs.
True, advertising systems are struggling with speculation around medical masks. For example, Google banned their ads in all countries, Avito and Aliexpress also began to fight with such ads.
Media, social networks, streaming services, educational online projects
It is logical: if people sit at home much longer than usual, you can not go to a restaurant, a movie or a concert – what remains? That’s right, you have to sit more on social networks, watch TV shows, read the same news about the Coronavirus, and also learn. Naturally, media resources can earn more on this.
eMarketer predicts that the consumption of all digital multimedia will grow globally – which is exactly what happened in China.
Vodafone said that Internet traffic in Europe increased by 50% (all due to work at home and streaming services).
Netflix app installs grew 34% in Spain and 57% in Italy.
Moreover, media, video, and educational platforms are actively working to increase consumption: they talk about a pandemic, attract an audience with discounts and promotions, open free access to previously closed content.
Due to the Coronavirus, Amediateka presented a month of subscription to existing users.
“Tricolor”, “Beeline” and “Megaphone” opened free access to their content.
And Pornhub is giving away premium access to everyone until April 24th.
Of course, along with the aforementioned business, all kinds of fraudsters and charlatans became more active. People infected not with the Coronavirus itself, but with the “infodemia” around it, can believe anything. And buy, for example, charming garlic, amulets, and amulets, ozonizers, special medical masks of black color (at exorbitant prices), etc.
There is no doubt that fraudsters can earn much more than the above businesses because often the margin is hundreds of percent.
However, it is worth making a reservation – due to such fraudulent activity, you can earn only for now. Thus, the FAS Russia recognized the advertisement of Arbidol as violating the laws on advertising, and the investigating authorities opened the first criminal cases because of the Coronavirus.
Plus, if this continues to continue, the slowdown in the global economy and widespread quarantine will hurt all sectors:
How can retailers or delivery services make good money if the purchasing power of the population seriously decreases?
Who will pay taxes when many cafes, restaurants, hotels, airlines close?
What will happen to aggregators of taxis, hostels and airline tickets that live off a business suffering from a pandemic and panic? (by the way, today Pobeda Airlines announced the suspension of flights until May 31 …)
In the end, what to look at streaming services if Netflix, Apple, and Disney stopped filming due to the Coronavirus?
Even Internet marketing can subside because many customers will reduce the cost of promotion for one reason or another. In Russia, the consequences of the Coronavirus can be superimposed by such negative phenomena associated with the weakening of the ruble.
Only Greta Thunberg and eco-activists will be satisfied because all these events cause a decrease in CO2 emissions into the atmosphere, which means they slow down global warming and other climate changes.
What is the result?
During outbreaks of other diseases, they did not close borders, did not cancel all events, did not restrict visits to cafes and restaurants, and did not threaten criminal prosecution for violation of a quarantine. Now everything is different. And it is not known how long this will last.
Big business will surely stay afloat – as a rule, there are enough of its reserves, in the extreme case, the state will help them. It’s hard to imagine that Aeroflot (because of the Coronavirus) or Rosneft (because of the collapse in oil prices) would not resist.
What to do for small and medium business:
Optimize costs. Negotiate installment payments, refuse to participate in risky and unprofitable projects, etc. It may be necessary to reduce the proportion of employees.
Develop new directions. For catering, obviously – to bet on delivery. Event organizers can translate them into an online format – so the Bi-2 group collaborated with Okko and gave an excellent online concert on March 20. If you make money on copyright tours, it might be worth focusing on travel blogging.
Consider any scenario. We need to think about how to dramatically increase momentum and begin to work actively if everything returns to normal. At the same time, it’s worth understanding how to act if circumstances lead to the need to close a business or bankruptcy.
About the author
Melisa Marzett is a freelancer who has more than 5 years of experience as an article writer for online resources including cheap cv. She has been working as a journalist and a translator does a charity work, loves children and animals and believes in people`s best.