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COVID-19 Economy: Businesses Booming Despite Lockdown

COVID-19 Economy: Businesses Booming Despite Lockdown
Bitrix24 Team
June 25, 2020
Last updated: September 30, 2022

Table of Content


Preface
Consumer Market During the Lockdown: Overview
Industries Booming Despite the Lockdown
Small Businesses That Manage to Flourish Amid the Lockdown
Conclusion

Preface


As the COVID-19 pandemic continues to unfold (although there are signs of it slowing down), the daily media reports are starting to look more like news from the front. The overall negativity has been built up to an almost unbearable level and everyone seems to be focused on the down side of the situation.

This article ignores the popular trend and takes an alternative look at the COVID-19 economy focusing on businesses that are actually thriving despite the lockdown. What’s their secret? How do they manage to pull it off? What can other businesses learn from their success? These are the questions answered in this article.

If you are looking for your own winning COVID-19 strategy, try using Bitrix24 - an online collaboration and sales platform packing a wide arsenal of business tools like CRM, website builder, sales center, project management, and more. Create your free Bitrix24 account and start getting results today!

Consumer Market During the Lockdown: Overview


Contrary to popular opinion, people haven’t stopped spending money because of coronavirus - it’s more like their shopping preferences have changed, which is quite predictable given the current situation.

Some categories like household supplies, groceries, and home entertainment have shown strong growth in most countries of the world while other categories like travel, restaurants, and apparel are going through a rough period, to say the least.

The infographic below (courtesy of Visual Capitalist) offers an in-depth look at the expected consumer spending per category over the next two weeks (compared to usual) - a clear indicator of people’s expectations.

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It is also worth noting how Chinese businesses are reacting to the country’s gradual lift of the quarantine restrictions. Industries that are seemingly “dead” or at least dormant in other countries (fitness & wellness, apparel, gasoline) are slowly bouncing back in China, which is something we all should expect to see in the rest of the world after the peak of the pandemic has passed.

Another interesting metric here is the level of optimism about economic recovery after COVID-19, which indicates the general consensus among consumers in a particular country. As evident from the graph below (source - Visual Capitalist), there is still some hope left in the world - mostly, in India, China, and Indonesia.

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Despite all the negative news from the coronavirus front, consumers in America remain somewhat hopeful - perhaps, even more so than their European counterparts. As much as 37% of respondents in the US believe the economy will bounce back in a matter of a few months.

The same holds true for the US stock market, which is somewhat of an indicator of business activity and a reflection of the ongoing economic trends. As evident from the Dow Jones graph below, the lowest point seems to have been passed and now it’s on the rising trend again (other indexes like the S&P 500 and NASDAQ follow the same trend).

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These signs of sporadic optimism here and there give businesses hope that not everything is gone and things can (and will) go back to normal. Combined with the recent news of some US states easing their restrictions and allowing certain businesses to reopen, this provides for mild optimism.

However, there are some businesses out there that are already doing great and even thriving during the lockdown.

Industries Booming Despite the Lockdown


It turns out that the crisis didn’t hit everyone equally hard. Certain categories of consumer products and services have been experiencing increased consumer demand ever since the pandemic broke out.

Home Entertainment


All kinds of home entertainment - from streaming services to video games - have been on the rise lately. Not that it surprises anyone given the fact that 60% of Americans are still on some form of lockdown as of mid-May. These numbers (courtesy of CNN Business) speak for themselves:

  • Sales of Activision Blizzard have gone up 21% in the first quarter of 2020 compared to 2019
  • Electronic Arts reports 12% growth for the same period
  • Nintendo’s profits in the first three months of 2020 more than tripled compared to Q4 2019
  • Netflix added 15.8 million new paid subscribers in Q1 2020 - an all-time high for the company. They expect to add some 7.5 million more in the second quarter

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Household Supplies


People just can’t get enough of sanitizing and cleaning these days, which seems to benefit giants like Clorox and Reckitt Benckiser. Both companies reported strong consumer demand and an average increase of 15% in their Q1 sales compared to 2019.

After the initial surge in household supplies sales (mostly caused by panic buying) subsided, they somewhat stabilized but still going strong as governments keep introducing stricter measures on public health and safety, which require constant cleaning and sanitizing.

In-Home Fitness Equipment


Companies producing in-home workout equipment like stationary bikes and treadmills have unsurprisingly had a blowout quarter. One of them, Peloton, reported 66% revenue growth while their app membership rose 30%.

Online Collaboration Tools


Video call service Zoom has had arguably the biggest break so far, going from 10 million daily meeting participants in December 2019 to 300 million in April this year. Fun fact: Zoom is currently worth more than the top seven airlines combined, which is sheer luck for everyone who bought the company’s shares back in 2019.

Whether this phenomenon known as the “Zoom boom” will last long is highly debatable - regardless, the company has received an exposure they could only dream about and they will surely find a way to capitalize on it.

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Another popular collaboration tool, Slack, has also been doing great recently with a reported 80% increase in new paid customers. Similarly, a group video chatting service HouseParty has reported 50 million new installs between March and April becoming #1 social video app in 82 countries.

Being developers of a widely popular online collaboration service Bitrix24, we have also experienced this sudden increase in our daily usage numbers. Here’s a quick breakdown of the fastest-growing collaboration tools by country, based on the data we received from our clients (see below).

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Of course, the main reason behind this is the fact that a significant number of people around the world had to switch to teleworking and continue doing their job online. Whether they will want to go back to office once the quarantine’s lifted is one of this season’s biggest intrigues.

One could argue that the success of the companies mentioned above was somewhat expected given the nature of their business that seemed to match the conditions of the lockdown perfectly. Now, this next batch consists of the less obvious industries, which have also benefited from the lockdown.

Online Dating Apps and Websites


Not having a chance to look for a partner in real life anymore, people have turned to dating apps - and turned they did! Online dating services like Plenty of Fish, eHarmony, and Tinder are reporting a notable increase in new memberships. In fact, a recent study combined by eHarmony suggests that more than 50% of all relationships will start online by 2035 (compared to 30% in 2019).

E-Therapy Apps


With millions of people stuck inside their homes pondering a future that might be rather grim for many of them, various “online counseling” apps and services rose to prominence rapidly during March and April.

Chatbot e-therapy apps like Better Help, Woebot, and Wysa have all reported a significant increase in their daily user numbers. TalkSpace, a service that connects users with psychotherapists and counselors online, also says the volume is up 25% in March only.

News Media


Judging from the graph below (courtesy of Neil Patel blog), media was one of the main benefactors of the COVID-19 craze as traffic to news websites increased by more than 30%.

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However, it’s not just traffic. A lot of news media resources have established paywalls and only allow a certain amount of free content per user. Hungry for updates on the rapidly changing situation, more users agreed to subscribe to get full access, which enabled giants like Washington Post and Financial Times to increase their revenues.

Small Businesses That Manage to Flourish Amid the Lockdown


What about the businesses that didn’t get lucky enough to be in the right place at the right time like the ones mentioned above? Obviously, they will have to use all of their creativity and unorthodox marketing approaches in order to adapt to the new reality.

Many small businesses have managed to take the hit, stand up, and continue fighting for their customers. Here are a few inspiring examples of such businesses.

… and Ukes for All


UkuleleMate, a family-owned Australian online store for ukuleles and accessories, was doing moderately well until the COVID-19 pandemic hit. Wanting to increase their customer base, the company decided to reach out to all those people stuck inside their homes with not much to do.

However, soon they realized that this new audience, unlike their regular customers, were not musicians and had little to no idea about ukuleles. The company then did a simple thing - a free online video lesson for every new customer, which seemed to work really well and got the customers hooked instantly.

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This idea has prompted the owners to launch a whole series of online video classes and add a few more incentives like a free tuner, songbook, and uke strap. They even got featured on the local Australian news, which brought even more exposure to the business.

Results: the company’s sales have spiked by 350% and it’s on track to do $1.4 million in sales in 2020.

From Grilled Cheese to Home Baking


Mechelle Clark, the owner of a grilled cheese shop and restaurant in Aberdeen, Scotland, had to suspend her business operations due to the lockdown. However, Mechelle was savvy enough to adapt her business to the new reality and started offering a delivery service to meet the newly appeared demand for home baking (even though it was a radical departure from their original menu).

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Not only that but she also began producing home-baking kits and increased her company’s presence on social media posting “how-to” videos. All of these measures have enabled the restaurant to stay afloat and keep the customer interest going even during the complete lockdown.

How to Look Flashy During a Videocall


The fashion industry has seen better times - as most people have to stay home and the retail shops are closed, it’s no wonder that sales of apparel have dropped significantly everywhere in the world. Even though you may order stuff from the Internet, there’s not much sense in buying new clothes and shoes only to wear them around the house trying to impress your family members.

Boohoo, an apparel company from the UK, was quick to notice this trend and reimagined their product range adding a greater focus on homewear. Now that so many people have to work from home and have video calls on a regular basis, they need clothes that will provide enough comfort but still look great.

The company offered a completely new lineup of clothes mainly consisting of hoodies, joggers, tracksuit bottoms, and tops, all of which have led to a massive increase in sales. According to a Boohoo representative, "Sales of tops have gone up in particular, with everyone wanting to look smart on Zoom calls."

Next Best Thing to Traveling


The travel industry was arguably hit the worst by the lockdown. Borders are closed, planes are not flying, travel agencies are going bankrupt. However, even in a situation like this, some businesses are still managing to hold on and retain their clients. For example, a London-based tour agency Travel Curious launched a new experience for their Instagram followers - virtual tours.


Filmed and narrated by the company’s local guides in respective cities, these tours have become quite popular on Instagram and drove an additional 1,500 followers. Even though they’re not real clients, they might become ones after the travel restrictions are lifted.

Conclusion


If all this information is indicative of anything, it’s the fact that customers didn’t just go and hide - at least, not all of them. There are people out there wanting to spend money on the stuff they like. The main problem now is that they have become harder to reach. Thankfully, it’s one of those problems that can be solved via proper marketing and sales efforts.

Now that physical sales are not an option anymore, many businesses are starting to switch to remote sales to maintain and develop their operations. If you are looking for a tool to help you make that switch effortless and free, try Bitrix24 - an online collaboration and sales platform with over a dozen specialized marketing tools, including:

  • CRM with automated lead generation, sales center, and enhanced analytics
  • Website builder (create landing pages and e-shops without any programming skills)
  • Telephony
  • Tasks and project management
  • Chats, videocalls, and videoconferences
  • Online storage for your files
All of these tools are conveniently packaged in a single service and integrated with each other to provide you with the ultimate online business experience. Create your free Bitrix24 account with just a few clicks and start making your business online-friendly today!
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