Which industries are currently booming
Success against the crisis: industries that are currently booming
Not all industries are currently suffering from the strongest and greatest losses in sales. There are also some for whom the situation is helping to achieve unprecedented heights. Many readers should be aware that many holiday home owners, hoteliers and similar hotel and restaurant operators in and around the Salzland are happy because many Germans channel their desire to travel to Germany instead of abroad. If not: domestic tourism can currently boast significantly better recovery rates than its long-distance counterpart. However, the local hospitality industry is by no means the only industry that is on the mend again. In fact, there are some who are doing really well.
1. Online trading
For the (global) online trade, Christmas came in spring and early summer this year. Not only in the figurative sense in the form of profits. As far as ordering behavior is concerned, what has been happening for a few months for many retailers can actually only be compared with the busy Christmas season - and for some it goes far beyond that.
The situation began catastrophically for online retail as well: In March and April, more than half of all retailers said that the crisis would have a negative impact on business. But the ascent began shortly afterwards, especially for everyday goods. Here sales climbed a dramatic 51.2 percent in the second quarter; in the case of food, almost a doubling of almost 90 percent was observed - although the latter can be explained by the hamster purchases.
All those online retailers that offer furnishings, utensils for do-it-yourselfers and home electronics also reported good figures - with those retailers who operate entirely without stationary retailers who did best in all of e-commerce. Those who drive in two directions often had to compensate for the worsened offline business with the improved online business, which means that overall no outstanding figures could be reported.
2. The do-it-yourself segment
DIY, short for do-it-yourself or home improvement, has been an industry with reliable customers throughout Germany for decades - the Germans were passionate do-it-yourselfers and hobby gardeners before trends towards upcycling, urban gardening and the like caught on; these only made the already good sales a little better.
Then came the crisis. And while many industries were forced to close as a result, it was a very different story at DIY stores and garden centers. Because only Bavaria, Mecklenburg-Western Pomerania, Lower Saxony, Saxony and Schleswig-Holstein also closed these shops; in all other federal states, including ours, they remained open and were therefore considered "systemically relevant" - with good reason, by the way, because the range of such markets is considered a basic supply, for example because only here are materials available to repair a broken tap.
For example, Hornbach AG reported an increase in sales of 17.8 percent for the entire group for the first quarter of the fiscal year (March 1 to May 31) (including those losses that resulted from closed markets in the federal states mentioned). Other companies in the industry can also report similar values - and here, too, online trading proved to be at least a valuable support, through which the losses of closed branches could be compensated. There are three reasons for success:
- The restrictions caused many customers to focus on their own home.
- The large number of employees sent to the home office resulted in additional renovation work.
- As a minority of the shops that were still open, DIY megastores with garden centers also attracted strollers from outside the industry who were encouraged to make spontaneous purchases.
How the year as a whole will develop, however, remains to be seen - only when the generally strong but weather-sensitive summer phase has ended will it be possible to reliably estimate the overall extent.
3. The sports betting provider
The world of sports is opening up again worldwide. Bundesliga, foreign soccer leagues, Champions League, Formula 1, NBA and the like have started again. Most organizers, however, still have dramatic effects on viewers - on-site restrictions exist practically everywhere. In the Bundesliga, too, people are only thinking out loud for the new season, there are still no concrete measures for the return of spectators.
For sports betting providers, this is currently also an upswing. Here, too, it looked very problematic at first: When there were practically no sporting events worldwide at the beginning of the crisis, the previously highly successful business fluctuated considerably, experiencing losses of 90 percent.
But then creativity took hold: if not live mass sports, then esports or table tennis (this sport in particular turned out to be an unforeseen draft horse). The way back began with such steps. When the first other sporting events were allowed to start again, the customer mood broke wide: If not on site, then at least cheer on the television and computer and spice up the fun by placing bets.
Today, therefore, the industry shows itself in the well-known freshness: There are reports again, betting odds are listed, tips are shown, providers are compared. This is reinforced by the fact that the changed and extended seasons prevented the summer lull this year. One thing, however, is still a difficult task: The ghost games make calculating odds more difficult. Because where no fans are cheering, there is of course no home advantage. And here, too, the following applies: The online division is particularly successful.
4. The office (software) branch
In mid-March, the digital industry association Bitkom found that around half of all German employees worked from home. For comparison: A year earlier, only 39 percent of all businesses allowed at least part of the home office, but a research report at the end of 2019 found that only around ten percent of employees regularly took advantage of such offers.
In plain language: within a few months, the number of people working in the home office rose by around 40 percent. And neither the companies nor the employees were remotely prepared for it:
- Office furniture
- Software, especially for communication and data transmission
all of this has been in disproportionately high demand over the past few months. And everyone who could deliver benefited from this boom. One example among many is Zoom Video Communications; a software provider for video conferencing, instant messaging and file sharing.
- At the end of 2019, the US company had around ten million users, and the share has been consistently well below the $ 100 mark for years.
- In March it had grown to more than 200 million users. The stock soared to a high of nearly $ 280 by the summer - although the company was at times criticized for privacy concerns.
Incidentally, this is a special case insofar as many expert opinions are of the opinion that the home office will no longer shrink to the previous level in the future. This means that at least those services that (also) rely on subscription models (common in software) should continue to report better numbers.
5. The bicycle manufacturers
The crisis dealt a heavy blow to large parts of the mobility industry:
- Aircraft manufacturer because air transport has been cut back sharply worldwide.
- Manufacturers of buses and trains because only a few wanted or want to expose themselves to the risks of such mass transport.
- Car manufacturers, because the crisis made many people and companies less willing to pay the usual costs.
Deutschlandfunk reported that in March and April alone around 80 percent fewer cars were sold in this country than would have been expected. Overall, it is estimated that in 2020, 1.7 million more cars could be manufactured in Germany alone than there are buyers.
Only those who build, import and sell bicycles are completely unaffected by such bad news. There are also good reasons for this:
- Bicycles not only enable individual traffic, but also individual traffic without an enclosed space around the driver. Both important factors for reducing the risk of infection.
- Even expensive (electric) bicycles cannot come close to the prices for automobiles.
- During the crisis, especially in cities, bike lanes were expanded considerably.
The result: The Zweirad-Industrie-Verband (ZIV) was able to announce the following words in mid-May:
"Under the impression of the first few days after the stores opened, two thirds of the specialist dealers (67%) expect sales at the previous year's level or even higher in 2020 - regardless of the size of the company, by the way.
In an interview with the DPA, ZIV communications chief David Eisenberger also added that May was the strongest month that the industry has ever experienced. Here, too, experts see good opportunities for the future. Similar to the home office, because the situation has forcibly reduced contact inhibitions and thus corrected previous views.
6. The streaming services
Of course, last but not least, the industry must also be mentioned, which kills millions of people with the exit restrictions. Namely all those between Amazon Prime, Netflix and Sky who provide entertainment on demand.
The reasons for this are clear:
- Cinemas and many other leisure facilities were and will remain closed.
- There were no sporting events for long stretches.
- The restrictions on contact and going out forced many to stay at home.
- The linear television channels often failed to offer adequate entertainment alternatives.
As an example: Industry giant Netflix had 167.09 million paying subscribers at the end of the fourth quarter of 2019. At the end of the second quarter of 2020 this had become 192.95 million; an increase of 25.86 million within a few months. At the end of the first quarter there was an increase in sales compared to the same quarter of the previous year of $ 5.77 billion - at the same time the share climbed to a recently reached all-time high of $ 493.80; in September 2019 it was still at $ 231.
Other streaming services have also been equally successful. However, these numbers are likely to decrease again with global normalization - although it is of course unclear when that will be.
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