Will COVID-19 effect Business as well
Updated: Jul 28
The coronavirus outbreak is first and foremost a human tragedy, affecting hundreds of thousands of people. It is also having a growing impact on the global economy.
In addition to the serious implications for people’s health and the healthcare services, coronavirus (COVID-19) is having a significant impact on businesses and the economy. As the international response continues to develop, we know that organisations are facing significant challenges and need to respond rapidly.
Authorities are advising people to stay home, as the situation may continue for a while. While some companies are open to remote operation of their employees, others can not. Small businesses would also be negatively affected as consumers go out less and turn to shop alternatives. Small companies will need to act quickly and plan to take advantage of the turnaround and brace themselves for the repercussions of Covid-19.
The impact of the coronavirus (COVID-19) is being felt by all businesses around the world. Leaders are navigating a broad range of interrelated issues that span from keeping their employees and customer safe, shoring-up cash and liquidity, reorienting operations and navigating complicated government support programs.
According to the Willis Towers Watson survey, 57 per cent of organisations in India expect a "moderate-to-large" negative impact on their business in the next six months, while 46 per cent expect this to last over a 12-months period. Read more at: https://economictimes.indiatimes.com/jobs/adverse-business-impact-of-covid-19-may-drive-companies-to-consider-workforce-optimisation-survey/articleshow/75271950.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
All the major industries of the world are currently dealing with the devastating effects of COVID-19 (or the coronavirus). From manufacturing to marketing, 2020 has seen shifts in the way businesses and organizations operate in the wake of the deadly virus.
It’s undeniable that coronavirus has negatively impacted businesses all over the world and our survey results solidify it as such with an overwhelming 93% of respondents noting that it will negatively impact their business.
However, what stands out from the survey is the number of businesses that believe the negative impact of COVID-19 will be short-term, instead of long-term. Specifically, only 28% of respondents are expecting a long-term negative impact while 65% are expecting a short-term negative impact on their business.
Of course, the negative impact can be wide-ranging and depends on the nature of the business itself, but the most obvious one would be on their revenues.
The impact of COVID-19 would be felt across sectors such as logistics, auto, tourism, metals, drugs and pharmaceuticals, electronic goods, MSMEs and retail among others.
The global economy could shrink by up to 1 per cent in 2020 due to the coronavirus pandemic, a reversal from the previous forecast of 2.5 per cent growth, the UN has said, warning that it may contract even further if restrictions on the economic activities are extended without adequate fiscal responses. Read more at:
"In these difficult times it is important to stand united and help one another in whatever way we can."
The survey, which incorporates first-hand perspective of human resource heads of over 100 organisations across sectors in India on the impact of COVID-19, showed that while the COVID-19 impact can be felt by organisations across sectors, 72% of the organisations stated that its impact will be felt even after six months.
An important dimension that organizations will have to consider is the psychological impact of the crisis on their employees, stated the survey. While some organizations have started virtual yoga and psychological counselling sessions, a holistic approach to employee wellness will be imperative.
"The global economy is expected to slump into recession in 2020, as post-covid projections indicate. The sharp reduction in international crude oil prices, if sustained, could improve the country’s terms of trade, but the gain from this channel is not expected to offset the drag from the shutdown and loss of external demand," the RBI report said.
Since the pandemic’s outbreak, prices of risk assets have fallen sharply. At the worst point of the recent selloff, risk assets suffered half or more of the declines they experienced in 2008 and 2009. For example, many equity markets—in economies large and small—have endured declines of 30 percent or more at the trough. Credit spreads have jumped, especially for lower-rated firms. Signs of stress have also emerged in major short-term funding markets, including the global market for U.S. dollars.
The global spread of COVID-19 may require the imposition of tougher and longer-lasting containment measures—actions that may lead to a further tightening of global financial conditions should they result in a more severe and prolonged downturn. Such a tightening may, in turn, expose financial vulnerabilities that have built in recent years in the environment of extremely low interest rates.
7 Industries most Affected by Coronavirus
Since technology companies have closed their offices and stores, restricting their executives to travel to the affected areas, it has adversely effected the supply chains. For example, manufacturers in China are the key suppliers to technology companies across the globe. Manufacturers who have been impacted by the coronavirus are failing to make on-time delivery, thereby impacting various tech businesses.
On the other side, IT firms are realizing the benefits of outsourcing, more than ever. Remote working has been given preference amid the COVID-19 and thus functions such as software development & maintenance are least affected by the coronavirus.
The rise of coronavirus cases may end up with the demand for certain insurance types. As the COVID-19 virus continues to dominate the headlines, there is a hike in demand and awareness about insurance plans for health and life coverage.
The demand for life and health insurance policies has seen a jump of 35-40% on online insurance platforms in India (Source). On the other hand, travel insurers have experienced a dip in the number of insurances due to travel restrictions. Depending upon the type of insurance that a company deals in, there are positives and negatives of coronavirus pandemic on the insurance industry.
3. Sports and Entertainment
· The NBA has suspended its season after a player was tested positive for COVID-19. Also, Arsenal Football Club has placed its players in self-isolation and postponed the Manchester City game due to coronavirus. · Movie theaters are temporarily locked down in parts of India, amidst the COVID-19 spread.
The entertainment industry is adversely affected by the coronavirus outbreak. However, as more people stay at home, in self-isolation, and take quarantine measures, there is increased use of alternate entertainment services such as games, video-on-demand, etc. According to the Financial Times, the number of app downloads surged in China after the nationwide isolation measures were taken. Video streaming companies such as Netflix, Amazon, Disney+ are expected to have a rise in the number of subscribers in the impact of COVID-19.
4. Hyperlocal Marketplaces
While people are under isolation to mitigate the impact of COVID-19, hyperlocal delivery services are making the most of it. Doorstep delivery services for food, medicine, grocery, packages, etc. are gaining ground. To make it safe for the recipients and riders, food delivery companies such as Deliveroo, Postmates, Instacart, Zomato are giving options to choose contact-less delivery, wherein the rider drops-off the package outside the doorstep.
5. Travel and Tourism
The travel & tourism industry is severely affected by the coronavirus outbreak. With COVID-19 being a pandemic, people are avoiding travel to different countries and cities, which has negatively impacted the travel business and has affected the tourism benefits of the affected countries.
Airlines are drastically cutting flights and flight rates as more people have decided not to fly during the outbreak. According to the International Air Transport Association (IATA), global airlines may lose $113 billion in sales if the coronavirus continues to spread at this pace.
The U.S. airlines asked for over $50 billion in federal assistance due to the dramatic decrease in passenger traffic.
At the end of the year, airlines can have 11-19% loss in global passenger revenues, according to IATA.
6. Retail and Commerce
Malls, shopping centers are temporarily shut down in effect to COVID-19. Also, since people distance themselves from social gatherings and crowded spaces, they prefer ordering their favorites or necessities online. Similar is the case with the retail business.
On the contrary, digital commerce businesses are trying to make the most of this situation. Nevertheless, thriving in such an outbreak is still a challenging job for eCommerce businesses.
The Fintech sector have experienced a drop in transactions at all levels. Since people have self-isolated to protect themselves against the COVID-19 spread, they are spending less than usual, leading to a low transaction rate. In fact, cryptocurrencies such as Bitcoin, Ethereum have experienced a major dip amid the coronavirus effect.
In these tough times technology can aid business to find alternate avenues to reach out to their customers.
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