Which Business Sectors Have Prospered During the Pandemic?

“If anything kills over 10 million people in the next few decades, it's most likely to be a highly infectious virus rather than a war. Not missiles, but microbes”, said Bill Gates five years ago during his TED talk speech regarding the dangers of an impending pandemic.

We all woke up to witness his prophecy come true. As countries all over the world are dealing with the human and economic costs of Covid-19, there are far more diverse ways the pandemic has impacted our daily lives and catalyzed new habits and ways of doing things – as an individual, business, society, and a country. 

Which sectors and niches prospered during the pandemic?

A dismal year for most companies, but for some, it provided the best conditions for growth and development both as an industry and a company. Pharmaceutical companies were boosted due to their hunt for a Covid-19 vaccine; the IT sector invested a lot in R&D to provide better solutions to the massive tendency to work from home; online shops that were once small retailers or mom-and-pop shops became big-time players. Other thematic winners were cloud computing, gaming, financial- eCommerce sectors.

Let me walk you through sectors one by one, and find answers to their success during this global crisis.

1. IT sector, namely remote working software, apps, and tools

Many countries faced full or partial lockdowns during the pandemic, and most companies had no choice other than to find alternative methods to keep up with the work and maintain effectiveness while working remotely. 

All this led to massive usage of remote working tools, apps, and software. For instance, video calls made through Zoom reached 300 million participants a day in April, resulting in more than double the share price compared to January, and revenue has gone up by 169% (see share price progress of 1 year below). 

 Another example is the Microsoft Teams communication app, which reached a record-breaking 75 million users per day in April, compared to 20 million in late 2019. The difference is more than Slack’s total number of users (10 million active users). 

It seems that Microsoft’s CEO Satya Nadella has prepared the company well before the pandemic happened, since the company’s abrupt shift to the cloud has secured a safe working environment, given that a huge number of people are working remotely.

Meanwhile, in China, the most widely used WeChat Work and Alibaba-owned DingTalk software platforms crashed on the first day Chinese workers started their remote working. 

Forecast: The IT sector will start relying more on cloud and other virtual solutions to prepare for a more flexible and hard-to-disrupt working environment. Many businesses had issues with remote work but eventually grew to love the flexibility and efficiency, hence many will continue to work remotely. More IT startups will innovate in this field and become a competition to Zoom, Microsoft Teams, Slack, etc.

2. Pharmaceutical and medical technology sector

There is an exceptionally high demand for medical supplies and care during this pandemic, which is normal. Many countries are pouring a massive amount of their budgets into developing Covid-19 vaccines, for example, Germany expects to reach € 1.3 trillion Covid-19 costs soon.

Forecast: The expenditure in the pharmaceutical and medical technology sector is not expected to fall any time soon, even after the pandemic is over. Quite the opposite, i.e., Deloitte predicts that prescription drug sales will reach $1.18 trillion by 2024. The global medical devices market size was valued at $ 425.5 billion and is expected to reach $ 612.7 billion by 2025 (see the forecast graph below).

3. E-Learning

More than 1.5 billion students and pupils all over the world had to reorganize their education to homeschooling because of massive school and university closures. Teachers and professors had to change their education methods and use online platforms and software to meet this demand, i.e. Google Classroom, Seesaw, etc. 

As students started using these methods, their time efficiency highly increased, and they could devote more time to hobbies and other interests. This apparently seemed appealing to their parents, which explains the increased rate of MOOCs (massive open online courses) used nowadays. MOOCs, online education platforms, or webinars are massively used by workers, who want to improve their knowledge in a specific field or just invest in their self-development, as well as business owners, who simply didn’t have time before to just sit at home, and make better market research, and discover more innovative approaches to their companies’ growth, as well as search for answers to find new sources of income to survive the crisis.

There are many platforms now available to anyone interested, i.e. Udemy, Coursera, EdX, MasterClass, etc. Coursera made its entire course catalog free for universities, while Bloomberg partnered with John Hopkins University and launched an online coaching program to assist mayors of cities with technical advice concerning coronavirus.

Forecast: The demand for e-learning is expected to still increase especially when schools are closed, but online classes remain open. In India alone, 10 million additional enrolments are predicted for 2021, states a Times article.

 4. Entertainment

As travel has been banned, government-mandated self-quarantine for returning travelers, movies, museums, concert halls, as well as heaters closed, the only thing remaining to keep all of us sane is home entertainment. Hence, it was quite predictable and reasonable that the entertainment sector would grow at an exponential rate. For instance, Netflix’s market value is up nearly $ 100 billion in 2020 alone, shares have gone up by 60% (see previous year’s share price advancement below), making it one of the 20 largest companies on the S&P 500 list, ahead of even Walt Disney.

Other entertainment sources are games, dating apps, social media influencers, which are gaining more and more users, who are trying to interact with the outer world while staying at home. The most downloaded app became TikTok – Business Insider stated that it outperformed WhatsApp, Instagram, and Facebook, and is close to 2 billion downloads.

Forecast: This trend will continue in the long run. Previously unknown apps became the most loved ones, as it happened with Houseparty, which grew to become the number two social app (after Zoom) in Italy.

There are more sectors that witnessed exponential growth during the pandemic, including but not limited to logistics, virtual reality, virtual healthcare, contactless technology (such as automatic sanitizers, voice-activated technologies, supermarkets like Amazon Go), freelancing (Upwork, Fiverr), electronic transfers (PayPal), etc. 

 Despite the discomfort of not socializing, I am sure that most of the changes will maintain and even develop, as the world discovers its endless opportunities. Advertising firm Ogilvy states “The longer it goes on, we get used to living differently, choosing differently, shopping differently. [There are strong possibilities] these changes will become the new normal.”

“When I think back on the pace of scientific advances in 2020, I am stunned,” says Bill Gates. “Humans have never made more progress on any disease in a year than the world did on COVID-19 this year”. 

As Bill Gates proved his vision to be true, now he is regarded as one of the most prophetic voices on the planet. Hence, when he speaks up and expresses his opinions on what is coming along, we should just make notes and follow his advice.