Impact of COVID-19 on businesses
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The outbreak of a pandemic in 2019 set in motion a cascade of events that disrupted the entire world. Its impact was widespread across sectors forcing a rethink of methods and approaches. The unemployment rate increased, and the global economy shrank by 4.4% in 2020, according to estimates by the International Monetary Fund (IMF).
One such sector that has been impacted by the outbreak of the pandemic is the business sector. Measures enacted to curtail the spread of the virus, particularly the locking down of cities, hit business operations hard. This left many businesses gasping for breath.
Two years down the line, and with vaccines against COVID-19 now available, many countries are in remission as are the different sectors. How is the business sector faring? Here’s a rundown of different ways that COVID-19 has impacted the business sector.
Auto-industry
A McKinsey estimate suggests that the pandemic may have wiped as much as $100 billion of the auto industry in 2020 alone. This is because many people now feel safer staying indoors than moving around. There is also increased use of online shopping and payment channels. More so, the rise of driverless cars, automated factories, and ridesharing also set businesses in this sector aback.
Restaurant
There is still an aversion to indoor dining in the post-crisis world. This may continue for years. Thus, many more restaurants are looking towards optimizing their online ordering, and their delivery services. Drive-through options must also be considered and optimized while menus and pricing must undergo reengineering to motivate customers.
Fintech Industry
The race to embrace cryptocurrencies, NFTs and blockchain are massive. There is growing mainstream adoption of blockchain solutions and cryptocurrencies as people seek to take charge of their finances. This is such a fast-paced industry that business news daily changes. As new banks and financial institutions are springing up, old ones are diversifying into offering crypto exposure for their investors.
Insurance
COVID-19 expressed the uncertainty of the future in better ways than any insurance firm ever could in their marketing drives. Consequently, more people have been embracing the idea of having an insurance plan. The pandemic also justified the launch of new pandemic-focused products by several companies.
Healthcare
COVID-19 caused an acceleration in the growth of digital healthcare and telemedicine. McKinsey reports that in 2019, 11% of US customers used telehealth. This figure grew to 46% in 2020 as people sought to replace canceled healthcare visits. Also, with the widespread of information on the internet about safety and health, more people are taking precautions to reduce the need for hospital visits.
Education
The world has found online and remote learning and it will never remain the same. Many more educational institutions are beginning to reengineer their learning spaces to accommodate these innovations. Also, more people have resorted to homeschooling their wards. Any educational institution that doesn’t embrace online learning will likely fall out of popularity, and quickly too.
Aviation Industry
Businesses in the aviation sector are one of the worst-hit. Following a decade of consistent growth in global passenger traffic, the COVID-19 pandemic brought passenger traffic to an all-time low. A report estimates that air traffic is down by at least two-thirds. With restrictions still on entry in many countries, the aviation sector doesn’t look set for recovery yet.
Tourism Industry
Tourism is one of the sectors most affected by the Covid-19 pandemic, with businesses, public services, and opportunities on all continents affected. The industry which is singlehandedly responsible for 10% of the world’s GDP has suffered a huge contraction. Like the aviation sector, with restrictions still in place on movement, businesses that depend on tourism have also suffered a negative impact.
Bottom Line
There is no gainsaying about the widespread impact of COVID-19 on the business sector. Thankfully, the world is in recovery, and with it, all sectors of the economy of nations including the business sector are set to take a deep dive into the new normal.