OVERTIME INSTEAD OF MANDATORY LEAVE - WHO ARE THE WINNERS OF COVID-19? - PWC
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Overtime instead of mandatory leave Who are the winners of COVID-19?
Introduction
2020 has brought with it some new challenges hitherto seen only in sci-fi films.
Few of us were ready.
Which company would have taken into account during the annual financial
planning process that its operations could be jeopardised, that its employees
wouldn’t be able to go into work, or that materials purchased abroad would not
arrive, and all this for non-market reasons? Who would have thought that
alternatives will need to be found for carefully planned holidays or festivals, that we
need to hold our own both in working from home and in helping the kids learn at
home, or that simply doing the food shopping would become a significant
logistical/planning exercise?
Our everyday routines were turned upside down, borders, businesses and shops
were closed. It was both easy to be in the present (as we could only guess about
the future and were swamped by the range of online opportunities), and yet
difficult, since it is not easy to stay in the present amidst the uncertainty of being
confined within four walls or commuting to work at the height of the pandemic.
Numerous articles and studies on the losers of COVID-19 were prepared during
the most critical weeks of the pandemic, and we have a general idea of who the
clear winners are too. Yet less is mentioned about the sectors and businesses who
were able to capitalise indirectly from the changed circumstances brought on by
the pandemic.
The objective of this study is to provide a broader picture of the winners of the
global pandemic, as well as highlighting correlations that are not self-evident. The
study focuses on the Hungarian market as well as the European and North-
American markets, with the period under review covering the time from March
2020 until the end of May 2020, including longer outlooks in certain cases.
2
Content
The winners we already
knew about in March 5
Innovatively safe and secure
11
Free-time activities
that are fun at home too 20
Businesses that are capable of
adapting flexibly 27
Habits that align with
post-pandemic values 33
3
Memories of the 2008 crisis
Memories of the last comprehensive global crisis, the financial collapse in 2008,
are still vivid in the minds of business leaders. Taking a look at the pace of
recovery by individual sectors back then could be of great help in putting
projections together with regard to recovering from the coronavirus situation.
The post-crisis consolidation was fastest for agriculture, the pharmaceutical
industry, the food industry, healthcare and IT, since the demand factors driving the
recovery resuscitated these areas first, highlighting the key importance of these
industries. By contrast, normality only returned to heavy industry, the energy
sector, logistics and the financial market after a long decline – 24 months
according to statistical data – brought on by the structural crisis.
The big question is how much can the 2020 crisis differ in nature, one that hit the
global economy as an external shock and which not even the most pessimistic of
analysts foresaw. Could market players have prepared for such a challenge, or is it
just down to blind luck who emerges strengthened from the crisis?
Some sectors were
set back by 24 months
because of the 2008
economic crisis 24
months
4
The winners we already
knew about in March
Safer online; e-shopping for food 7
For lack of business lunches 7
Don’t forget your mask 8
Avoid the uncertainty: rapid COVID-19 tests 9
Zoom for every household!? 9
Delivery companies: the heartbeat of e-commerce 10
5
The winners we already
knew about in March
Various factors emerged when the pandemic erupted that were clearly of benefit
to certain providers and solutions – the new circumstances essentially dovetailed
with the existing operating models.
The remote teaching and working from home introduced on account of social
distancing made online-conferencing and knowledge-sharing platforms vital cogs
right from the very beginning. Looking at work and education, keeping to the
planned timetables and schedules left little time for making this digital transition,
and so obviously it was the tried-and-tested providers that were able to gain the
necessary consumer confidence, with Zoom and Microsoft Teams enjoying
significant gains here for example.
The isolation also transformed shopping habits, with web-based shopping and
online ordering becoming increasingly popular, thereby lowering the number of
face-to-face contacts. It is not just the ordering of ready-made meals that is part
of our everyday routine nowadays, buying ingredients is also just a few clicks
away. At the same time, the increased demand for deliveries has generated extra
sales revenue for delivery companies.
Since March it has become completely normal to make sure we have a mask
when leaving home, alongside our keys and our mobile phone. As our state of
health became more important than anything else during the pandemic, there is
now considerable demand for reducing the uncertainty with the help of rapid
COVID tests available for everyone.
In line with the above, this section takes a brief look at the solutions where a
surge in demand was a foregone conclusion at the start of the pandemic, and
which might remain a lasting part of our lives together with the coronavirus.
6
The winners we already
knew about in March
Safer online: e-shopping for food
Much has been said and written in recent years about the lack of any
breakthrough in online food shopping, despite growth in other categories.
According to research, the two main reasons for this are (were) that:
50x
growth in
1) consumers do not trust someone else to select the best and freshest products orders at
for them, 2) they do not want to pay for delivery. Amazon Groceries
COVID-19 did away with both problems: although food stores were not affected
by the restrictions on movement imposed because of the coronavirus, online
delivery became the only safe solution for many households.
• The surge in popularity for this service is demonstrated well by the fact that
Amazon Groceries, the Amazon division responsible for food home deliveries,
has needed to cope with order numbers in recent weeks that were up to 50x
higher than before. Estimates suggest that this line of business could triple by
2023 from its current size, turning into a USD 70 billion enterprise.
Online food shopping experienced marked growth in Hungary too, with the time
slots for deliveries booked weeks in advance at the large food chains. The market-
leading Czech firm Rohlik.cz moving into the Hungarian market in January with
Kifli.hu could not have been more “fortunate” with its timing – its sales were up
four-fold by the middle of March.
Yet there is still space beside the giants of the industry with their major logistics
systems and supplier networks: the start-up firm Smartkosár that was previously
a price-comparison platform developed its own webshop “Roksh” in just a few
days, where customers could order quickly from a narrower range of products.
This was replicated around the country (in large towns, around the Balaton)
where several similar webshops were launched: some simply “did the shopping
for you”, while others specialised in a given product group (fruit, bakery products).
They certainly won with COVID, and what is also sure is that when things open up
again only those offering the best customer experience (speed, product range,
quality) will stay on the winning side.
For lack of business lunches
+59%
growth in new customers at
With restrictions placed on people’s movements the hospitality sector
experienced an unnprecedented fall in sales revenue, and underwent massive
changes in just a few weeks: both small and large restaurants, lunch bistros and
Falatozz.hu Michelin-star restaurants all joined food-ordering platforms in a matter of days
and weeks. Takeaway orders in the USA rose by 8.7%, and according to certain
forecasts the global market could double in size over the next 5 years – a trend
that existed prior to COVID-19 but has been accelerated markedly by the virus.
For most restaurants the revenue increase from home deliveries does not
compensate for their loss of income elsewhere, yet in the medium to long term,
as consumer habits change, those switching now to deliveries will still be able to
reach their guests when they do not want to leave their homes. The rising
consumer demand for home deliveries is demonstrated by the turnover statistics
at Falatozz.hu as well: during the critical times the number of new customers
using the website rose 59%.
7
The winners we already
knew about in March
For lack of business lunches
+168%
increase in sales
COVID-19 significantly restructured supply and demand for the food industry. Of
course, this does not mean that people ate significantly more or less during
quarantine, it merely means that the past weeks have brought about quality
volume for flour changes, chiefly because of the transformation and shortening of supply chains.
in Hungary
• Durable foods (e.g. preserves, cereals) became the most popular products in
in March
the first phase of the restrictions on movement, with demand for them rising by
around 90% because by eating them people were able to reduce the number
of their purchases and their interactions with others.
• Another step towards managing risks was stockpiling ingredients for baking:
the sales volumes of flour rose sharply, up by 168% in Hungary for instance.
• This was accompanied by a shortage of yeast throughout Europe owing to
panic buying, even with the addition to the market of 500g products that are
usually intended for companies in the bakery sector. When the pandemic
erupted, the quantity that normally lasts for 1-2 weeks was being sold out in
the shops in a matter of hours.
That said, it is important to note that these products were only able to benefit from
the upheaval in consumer trends temporarily, since customers quickly realised
that there were no disruptions to the food supply and so the need to stockpile
disappeared.
Don’t forget your mask
The importance of hygiene has risen sharply in efforts to protect against the
spread of the coronavirus. Long-term use of the equipment and tools needed to
comply with the new hygiene rules is also triggering big changes in how we live,
69%
Proportion of people who
and in the economy. wash their hands more
because of the crisis
Wearing a mask has become a fundamental part of social contact, and today it is
natural that covering your face is compulsory in food stores and when using
public transport. Wearing gloves to prevent the spread of infection has become
similarly common.
On the market of hygiene products, B2B (Business to Business) sales
opportunities are gaining in importance besides the B2C (Business to Consumer)
business model. It is not only end-users who are seeking hygiene products; office
buildings, airports and other business participants are becoming significant
customers of sanitisers and masks, etc. in terms of the large quantities bought.
•Hygiene products and solutions offer even more business potential in developing
countries, since the risk of infection in many countries is essentially much higher
because of rubbish tips on the streets as well as wastewater and market
conditions, etc. •The soap market is also flourishing: worldwide the WHO
emphasised the importance of hand-washing, thanks to which the demand for
these products jumped markedly – according to surveys, 69 percent of people
have washed their hands more frequently since the pandemic broke out.
8
The winners we already
knew about in March
Avoid the uncertainty: rapid COVID-19 tests
During the global pandemic, the countries that managed to obtain a
comprehensive picture of the infection in their society via frequent testing were
able to manage the problems effectively. Alongside national healthcare bodies
EUR 10
Expected price of rapid
there was a greater need for private testing as well, with many private clinics tests within 3-4 months
offering such services. The high social demand for testing is demonstrated by the
fact that two key Hungarian companies, MOL and OTP, also tested their several
thousand employees.
Until we have a vaccine for the virus we will certainly be living with this testing.
Real consumer value will come when the costs of these tests are lowered and
rapid tests can be performed at home too, becoming an affordable part of
healthcare. At the minute there is also a problem with the reliability of the rapid
tests, since in 90 percent of the cases they can reveal people to be infected who
in fact, based on the more reliable PCR tests, are not.
However, Harvard Medical School expects that rapid tests much more reliable
than the present ones will be available for the equivalent of EUR 10 in just 3-4
months, and these will be much more readily available to companies and private
individuals. This means the market potential inherent in the tests may continue to
rise.
Zoom for every household!?
32 million
Number of new Microsoft
Online video conferencing and education platforms bringing the “office” and
classes into the home (Zoom, Google Classroom, Microsoft Teams, VPN Super
Unlimited Proxy and Hangouts Meet by Google) are undoubtedly winners of
Teams users in March COVID-19 – if it weren’t for them then our customary weekday routines and
everyday tasks would be nowhere near what they look like today. Shares in Zoom
rose from USD 108 to USD 162 in just one week in March, not to mention the
time users spend on Zoom (or similar platforms) in one week: it is not just in the
user number that we see a difference, but these users are spending significantly
more time on the site, and not only for one conference but for varying sizes of
meeting all day long.
The popularity of Zoom appears unrelenting, with the company’s shares trading
at more than USD 250 by the middle of June.
Platforms supporting online teamwork have also experienced a surge in use – the
daily number of Microsoft Teams users rose in March from 12 million to 44
million. Free, or even paid, live yoga/fitness classes, concerts and theatre
productions have become commonplace on Facebook/YouTube/Instagram.
The paid versions currently operate based on a “no frills” business model, with
donations or joining a Facebook group linked to a payment by transfer. The
question is whether payment solutions integrated into these platforms will
become possible in the future.
9
The winners we already
knew about in March
Delivery companies: the heartbeat of e-commerce
+31%
increase in sales at Express
Delivery companies played a key role in ensuring goods traffic was not disrupted
with the restrictions placed on mobility. In contrast to the general decline in
traditional retail trade, webshops and e-commerce grew by 104 percent,
One Hungary Kft. owing to the providing a continuous flow of orders for delivery companies. For example, the
pandemic package logistics division of the Hungarian Post Office reported that the daily
number of received items in the first two weeks of April was more than 20 percent
higher than planned, and was reminiscent of peaks around Christmas. Express
One Hungary Kft. (owned by the Austrian Post Office) also noted a jump in the
number of orders, with turnover up by 31 percent year-on-year in the five weeks
after the pandemic was declared. The main players in the Hungarian industry all
emphasised that B2C sales have grown most because of the pandemic.
In recent weeks we have not just seen growth for established delivery
companies, but also the appearance of many new, smaller players on the market.
Constructing networks outside of Budapest was a good opportunity here, where
the coverage of the large firms was smaller, and so market share could be gained
by focusing on a given product group, such as the products of a large
fruit/vegetable producer, or delivering the masks of a wholesaler.
Alongside market expansion, COVID-19 also brought innovation and enhanced
consumer experiences: contactless deliveries are now natural, and in the post-
virus period we can expect to see companies developing self-driving/robotised
delivery services become increasingly popular with investors.
10Innovatively
safe and secure
Network security 13
Cybersecurity companies: 13
vital for working from home securely
Drones: multi-functional help 13
Devalued personal rights: 14
rise in monitoring acceptance
Old solution in a new guise: the QR code 14
Physical security 15
Hygiene beyond masks and gloves 15
Financial security 16
No cash: fintech 16
Risk-minimising investment decisions 16
Personal safety 18
Lasting and healthy: food buying preferences 18
during pandemic
Greater importance of health promotion 18
Packaged fears 18
Holidaying in safety: rural tourism 19
Minimal contact in large urban areas: cycling 19
11Innovatively
safe and secure
Consumer habits have changed radically, while the key features expected from
technologies and solutions have been transformed on account of the global
pandemic.
Safety and security became more important than everything else during the time
of the virus, which led to the emergence of new trends in various areas of our
lives.
Given the complexity and systemic intertwining of our society, ensuring network
security posed the greatest challenge. In the new social order created by the
pandemic, direct social contact was pushed into the background while digital
support processes were designed owing to the need to maintain physical
distance. This category includes cybersecurity companies as well as drones, but
QR codes were also given a new lease of life. One of the peculiar consequences
of the pandemic is that the public accepted a moderate restriction of personal
rights of freedom for reasons of public safety.
Besides the smooth operation of the virtual domain, priority was naturally given to
enabling the remaining social contact. In addition to the mandatory masks and
hand-sanitisers known and used by everyone, physical safety was boosted by
innovative solutions such as special surfaces or even special paint minimising the
risk of infection.
Alongside the virtual solutions, the desire for safety also influenced our
immediate everyday lives with a jump in demand for hygiene products,
vitamins and the known produce of local producers. The primary aim of the
products that can be listed here is to guarantee personal safety.
With an eye on financial security, many fintech solutions won over consumers as
the risk of infection increasingly suppressed the use of cash. By contrast, the
trends on the investment markets painted a mixed picture because the volume of
gold investments surged with a view to minimising risk; however,
investors in more unsettled countries were happy to turn towards less
conventional instruments, such as cryptocurrencies. At the time of the emergency
health situation, companies with a chemical or healthcare profile and thus offering
hope for restraining the pandemic were also appealing for investors.
12Innovatively safe and secure
Network security
Cybersecurity companies: vital for working from
home securely
The lockdowns and restrictions on movement are not only an inconvenience
3.5x
increase in
because of the constraints on personal freedom, they also present a data security
risk for businesses owing to employees working from home. cybersecurity attacks
in the USA
• According to data from the FBI, at the time of the restrictions an average of
3500 complaints per day were received because of phishing attacks, which is
much more than the 1000 reports received in an average period. The most
common were phishing attempts against people working outside their
company’s firewall, with the attackers also frequently using social media
platforms.
As detailed in the study, the “home office” may well remain a lasting part of our
working lives even after the pandemic, so cybersecurity will be deemed an
essential factor in the long term too. At present, it appears that ensuring data
security is too big a task for the conventional IT and risk management
departments at companies, and so cybersecurity firms that can help businesses
make a secure transition with outsourced processes will have huge opportunities
in the coming period.
• One of the most important providers of cybersecurity solutions outsourced
during the global pandemic is Cyberhat, but Tanium offering a full security
platform has also come to the fore, along with Callsign and CyberadAPT that
prevent and identify dangers.
The long-term role of cybersecurity firms may be found in striking a balance
between and complementing IT and security departments.
Drones: multi-functional help
20 km
Area disinfected by a drone
Since the outbreak of the coronavirus, various drones have been designed
explicitly for the pandemic situation.
In India, the use of drones is helping the country protect itself from the pandemic
in one day
in many respects. Firstly, since the streets are usually narrow in large cities, the
disinfection sprayed by drones is much more effective than the traditional
method. A drone is capable of disinfecting roughly 20km in one day. Secondly,
using drones it is easy to monitor the population to check whether they are
complying with restrictions on movement. Besides all this, drones can be used to
make home deliveries of medicines, which is of great benefit to the older
generation.
In the USA, startup company Draganfly wants to help the authorities in
Connecticut with drones that are able to measure people’s body temperature
along with other health-related aspects from 60 metres away.
In Ghana, the firm Zipline operates the system distributing the healthcare
equipment required to manage COVID-19, using drones to deliver various
items to different parts of the country. The company wants to expand in the USA
as well, with one centre able to supply up to 10 million people.
13Innovatively safe and secure
Network security
Devalued personal rights:
rise in monitoring acceptance
Management of the pandemic has shown the dark side of the broad personal
freedoms deemed ideal by the western world. In China with its centralised
system, taking maximum advantage of digital monitoring opportunities made it
possible to isolate the pandemic relatively quickly and effectively, and this could
provide the Chinese leadership with a legitimate basis in the future. Face-
recognition software has been developed in China in the fight against the virus
amongst other things, which could be useful in identifying high body temperatures
as well as those not wearing masks.
By contrast, populations in Europe considered even the smallest constraints on
their movements to be serious violations of their personal freedoms, organising
protests against these measures in several places. The EU, for example, was
particularly slow to react to the arrival of the virus, the Member States developed
their own protection strategies, and consensus regarding border checks was also
slow to emerge.
The drastic change to this approach is well demonstrated by the fact that two
months later active checks on the borders are an accepted fact throughout
Europe, and it is impossible to enter many countries. People have come to terms
with the fact that they are restricted in leaving their homes, and can only shop at
certain times. Having to provide personal data upon entering a workplace does
not prompt any significant objections either, while people have to supply
information on where they have been as well as on the health of those in their
immediate environment.
Telecom companies contributed to the operating of the monitoring system too: in
Germany, for example, the authorities used the networks to monitor the
movements of the population to check the restrictions on movement were being
complied with. Social media platforms in China, such as WeChat and Weibo,
helped to identify any people who were ill.
Old solution in a new guise: the QR code
3
One of the unexpected winners of the pandemic is the QR code. It was more
popular in China than in Europe and America even before COVID-19
– QR codes generated USD 5.6 billion in revenue in 2016. Any payments are
easy to make with QR codes using WeChat that is installed by 93% of the different colour codes,
population, but this technology is also used to identify people, on product based on which
packaging, for church donations, for collecting money for weddings, and for QR code readers can decide on
identifying pets. Thanks to all this, without having to really train the population the health of citizens
they were able to introduce a QR-code-based system to classify citizens into
three health categories when the virus outbreak began. Based on completed
questionnaires available through WeChat and Alipay, citizens receive a colour
code that can be checked with a QR reader (green: may move freely, yellow:
must stay at home, red: must stay in quarantine). Without the code they cannot
venture outdoors.
Following in China’s footsteps, many other countries, such as France and Russia,
are introducing similar systems. Future growth of QR codes can be expected not
just in public administration, it could also take the place of bankcard payments –
see the following point.
14Innovatively safe and secure
Physical security
Hygiene beyond masks and gloves
At the time of the pandemic, plexiglass dividers preventing the spread of the virus
appeared en masse at the tills in retail stores, such as food shops, fuel stations
and pharmacies. Naturally, the companies making this special material are
5x
increase in plexiglass
winners in the current situation, such as the German company Röhm Plexiglas, production
which boosted its protection of plexiglass dividers more than five-fold at Röhm Plexiglas
thanks to the surge in demand.
Surfaces
Alongside hygiene products, other solutions preventing infections secured a key
role on the market. The importance of using anti-microbial materials that kill off
viruses and/or bacteria more quickly has risen. These higher quality – and
therefore more expensive – materials are primarily used for surfaces on home
furnishings and on means of transport. Looking at the anti-microbial materials,
the most common ones are work surfaces made of quartz, copper and semi-
precious stones, or the use of cork and bamboo; furthermore, surfaces can be
made more resistant with anti-microbial paint.
Tools and technologies
Many innovative products have been launched onto the market to prevent
infections, with “touchless” product developments commonplace. Most people opt
for touchless soap dispensers, thermometers or taps.
Since a huge number of people are working from home, there is a rising demand
to equip “smart homes”, which offer wireless technology solutions, such as
remote control TVs, heating, lighting, blinds, etc. Moreover, automatic doors and
lifts have become very popular in office buildings since traditional door handles
act as a magnet for pathogens.
Thanks to the ongoing development of new and modern technological solutions,
a self-cleaning handle that sterilises itself with UV light was launched onto the
market in Hong Kong in May.
15Innovatively safe and secure
Financial security
No cash: fintech
Owing to the coronavirus, fears about the virus trumped any insecurities about
contactless/mobile-based payments – use of cash by the population tumbled
drastically in a matter of weeks. According to Mastercard, for example,
+40%
increase in contactless
the number of contactless transactions rose by 40 percent in the first quarter, with Mastercard transactions
mobile payments in Australia rising by 17% in the same period.
Fintech solutions based on QR codes that are commonplace in the emerging
world (China, India, Brazil) could be the next step in contactless payments, as
they avoid both the intermediaries (Mastercard, Visa), and the devices (bankcard
terminals) – all you need is a telephone, for both the customer and the seller,
which can be a very convincing argument for small and medium-sized
businesses.
Aside from payment solutions, an increasing number of people began using stock
exchange apps when the coronavirus broke out – downloads of the UK’s
Freetrade app rose 125% every day in March 2020 for example.
During the coronavirus phase and thereafter, apps that offer commission-free
stock trading services could enjoy substantial growth.
On the lending market we expect to see marked growth by consumer/SME
lending platforms such as Tyro, Prospa and Fundbox, which enable loan
applications to be submitted online in just a few minutes that are then assessed in
one day.
The importance of digitalisation has never been in the spotlight as much as now,
which is why fintech/IoT companies that automate financial, lending and account-
opening processes as well as develop customer service bots for banks and service
providers can look forward to great untapped potential. Two key areas in the coming
period might be the digitalisation of mortgage loans and life insurance.
Risk-minimising investment decisions
330 We mentioned earlier how Zoom shares soared on account of the restrictions
brought on by the global pandemic, but we could all question what the situation is
with other investments, what opportunities did investors take? The following
million section will look at how conventional and unconventional investments changed,
and where did stock exchange investments generally go.
Record quantity of
LocalBitcoins in Chile in the Bitcoin – unconventional investment
first week of April The global pandemic is exerting a major impact on the market for
cryptocurrencies too.
In certain countries – mainly with instable and challenged economies – the
demand for cryptocurrencies rose markedly in the middle of the COVID-19
pandemic. The Bitcoin peer-to-peer trading volume in various countries of Latin
America peaked in recent weeks, reaching an all-time high.
The LocalBitcoins volume in Chile peaked in the first week of April at more than
330 million Chilean pesos.
Cryptocurrency traffic increased not just in South America but also on other
continents: in Russia, for example, the volume rose by 5.56% in the last week of
March compared to the average for February.
16Innovatively safe and secure
Financial security
Risk-minimising investment decisions
USD Shares of tech companies
1,250
In the middle of the COVID global pandemic the selling wave on the US stock
market picked up pace in March, with the largest tech corporations (Microsoft,
Apple, Alphabet and Amazon) initially losing more than a trillion dollars from their
market values compared to the highs in February. Amazon was quickest to
billion recover from the crisis on the investment market, counting as a secure
Amazon’s market value investment on the stock market when the pandemic peaked. The main reason for
reaches record high in June this was the surge in online shopping alongside the restrictions on movement,
with consumers buying much more on the internet because of the coronavirus. At
the beginning of April Amazon’s market value was around USD 1148 billion,
rising by early June to USD 1250 billion. During this time the S&P 500 stock
index evened out its losses too, so from this perspective as well the stock
exchange panic triggered by the pandemic seems to be short-lived.
Investments in pharmaceutical and chemical companies
Upon the explosive growth in the global pandemic, most pharmaceutical or
+225%
chemical industry companies began manufacturing equipment and drugs needed
for protection against COVID-19, which was very lucrative for them in a short
space of time.
growth in the stock price of The main profile of GeoVax, a small US biotechnology company, is to find
GeoVax on news of remedies for illnesses that do not yet have a vaccine. At the end of January, the
production of a potential company’s shares rose 225% (up from 80 cents to 2.6 dollars) when they
vaccine announced they were working together with a Chinese firm on a COVID-19
vaccine. However, investors hopes of a vaccine were quickly dashed as much
larger companies also began working on the development of a vaccine, and so
the price of GeoVax stock dropped to 0.2-0.3 dollars.
Demand for gold – conventional stock investments
The demand for physical gold soared during the pandemic, and the measures
taken to constrain the coronavirus created an absurd situation: for more than one
month, the price for an actual gold bar was much higher than the gold funds
traded on the stock exchange.
17Innovatively safe and secure
Personal safety
Lasting and healthy: food buying preferences
during pandemic
Over the last decade we have seen a rise in the consumer popularity of
vegetarian and vegan products as it became more difficult to purchase and store
meat and dairy products. What is more, with COVID possibly originating in
animals, the public’s perception of meat probably dipped as well. The demand for
popular packaged foods, vegetables and fruits will likely remain high after
COVID-19 too.
Greater importance of health promotion
95%
The majority of the world’s
Promoting health and strengthening immune systems play fundamental roles in
our everyday lives anyway, but they became even more important to us during the
pandemic. It is thanks to this that the market for immune-boosting products has
steadily grown. Immunostimulants recognised by the WHO include the various
stock of ascorbic acid is
types of vitamin B, as well as vitamin C, vitamin D, zinc, magnesium and
found in China
multivitamins.
• China is a particularly large exporter in this context, as 95% of the market for
ascorbic acid (purest concentrated form of vitamin C) is found in China.
• In terms of nutritional supplements, an upturn is expected on the B2B market
alongside the B2C market. Manufacturers are adding vitamins and minerals to
an increasing number of foods (e.g. dairy products, soft drinks, packaged
foods) to boost their sales.
Packaged fears
Owing to the rapid spread of the virus, great uncertainty arose among populations
and regarding the reliability of purchased goods. To minimise the risk of infection,
suppliers and food stores paid much more attention to packaging, with even
1.5x
sales growth in products
smaller packs than normal receiving separate packaging. with disposable packaging
This is substantiated by data from packaging company Indepack Kft., according
to which their sales of disposable, single-use packaging products increased by
150 percent in the first 3 months of the pandemic in Hungary.
18Innovatively safe and secure
Personal safety
Holidaying in safety: rural tourism
One sector hit particularly hard by the coronavirus pandemic is tourism, since
travel was affected by the restrictions on movement and by consumer concerns.
The traditional city destinations and seaside resorts popular so far find
+500%
increase in bookings
themselves in the hardest situations: it is here that it is most difficult to avoid for rural tourism in
masses of people. Longer trips are also hampered by the fact that the majority of Hungary
potential travellers had to use up part of their holiday entitlement during the
pandemic. Customary trends in tourism are not being helped by the restrictions
on air travel either, so people are looking at exploring as yet unvisited places
closer to home as an alternative.
This trend is well demonstrated by the forecast of the Hungarian Hotel &
Restaurant Association (MSZÉSZ), which predicts just 30 percent capacity
utilisation for Budapest hotels for the entire year. This is based on the majority of
guests being tourists from abroad, who are currently not travelling, while the
demands of travellers have also changed: they are now looking to avoid contact
with others and large groups of people, and seek accommodation with
impeccable hygiene standards.
Private accommodation and rural tourism stand to benefit most from this
situation, which are able to ensure the required distancing. According to
provisional statistics from Szállás.hu, for example, bookings related to rural
tourism have risen 500 percent in Hungary compared to the previous year.
Minimal contact in large urban areas: cycling
+650 km
Length of temporary cycle
Safety became a trend during the pandemic that has also influenced transport
habits, with most people striving to avoid contact with large groups of people;
path set up in Paris where possible they temporarily moved outside of the city when the pandemic
erupted. However, employees who were unable to work remotely took a liking to
bicycles as a means of transport, as this is great for minimising contact with other
people, in contrast to public transport.
The changed habits are clearly demonstrated by the 90% fall in passenger
numbers on some routes of the Budapest transport company (BKK), while
vehicular traffic also fell to largely half its previous level. Expanding the
infrastructure for cyclists became a priority throughout Europe during the months
of the pandemic. In Paris, for example, the city chiefs reacted to the pandemic by
marking out 650 kilometres of temporary cycle paths, while in Milan, a decision
was made to convert 35 kilometres of road into paths for cyclists and pedestrians
in preparation for life after the coronavirus.
19Leisure activities –
from home
Digital discoveries 22
Even more virtual entertainment 22
15 seconds can be enough 22
(e)sport is possible, even without moving 23
What we never had enough time for: e-learning platforms 24
Spending time inside and outside the home 25
Home is the new office 25
Comfortably at home 25
DIY reloaded 26
Recharging batteries at home 26
20Leisure activities –
from home
During the time of the global pandemic, the majority of people had more free time
than normal, which led partly to more intensive use of existing entertainment
opportunities and partly to the growth of new activities.
Besides education and work, entertainment penetrated the virtual domain too,
with significant demand arising for digital free-time activities. This meant that
alongside many traditional entertainment platforms we saw the emergence of
new players, such as TikTok from China. The narrowing options for sport and
travel also resulted in a rise in video games and online gambling, which injected
some excitement into everyday lives characterised by isolation and boredom.
Most people were not just in need of entertainment, they saw an opportunity to
develop themselves as well, which resulted in a faster spread of online education
apps.
Being restricted to the home meant that traditional activities experienced a
resurgence alongside digital solutions. Traditional but now less common free-time
activities became more popular again (e.g. baking bread, DIY), while a significant
part of the population found joy in other things that previously had been used as a
service (e.g. cutting hair).
In this section we present people’s changed leisure preferences in two groups,
one for digital and one for traditional activities.
21Leisure activities – from home
Digital discoveries
Even more virtual entertainment
Dedicated entertainment platforms (Facebook, Netflix, YouTube)
managed to broaden their reach thanks to the greater amount of free time.
+75%
increase in peak-time playing of
During the pandemic the most popular devices were laptops and desktop
online video games
computers, which is attributable to the restricted mobility of users. Since the
majority wanted to use the entertainment platforms from home, they were less
inclined to use smart-phone apps. The online streaming platforms were
particularly ready for surviving the restrictions since in comparison to traditional
television they had many of their own programmes that were already produced.
The wide range of options and the new programmes both contributed to keeping
up consumer interest. Besides Netflix, Disney also managed to benefit from the
situation that arose, doubling its number of users during the COVID-19 period.
Online film distribution was also able to offset losses otherwise sustained in the
industry, as new foundations had to be found for revenue flows following the
closure of the cinemas and the postponement of large film shoots.
The increase in the popularity of video games helps to make up for social
experiences and tides over periods of boredom. According to Verizon, during the
restrictions the peak-time use of online video games rose by around 75%.
15 seconds can be enough
112 million
Overall number of TikTok app
Boredom under quarantine and the greater amount of leisure time speeded up the
progress made by the TikTok application, which counts as one of the greatest
victors of the changes. This app used to share short videos even overtook the
video-conferencing app Zoom in terms of downloads in May.
downloads in May
In the month of May, TikTok was downloaded onto various devices 112 million
times, with the user number rising 20% during the pandemic.
In many respects, this platform could be a dominant advertising outlet in the
future. The majority of the users are from generations Z and Y, and exploiting the
opportunities of the platform are crucially important to reaching these age-groups;
in addition to this, there is a growing number of older users too.
Users generally spend a lot of time on the app, averaging out at 52 minutes a day.
22Leisure activities – from home
Digital discoveries
(E)sport is possible, even without moving
+255%
growth in new online
The pandemic made it impossible to hold sports events too, with the
2020 Olympics falling victim along with national sports championships. Technical
sports were the quickest to adapt to the changed circumstances, appearing as e-
poker players sports during the restrictions.
Nascar and F1 organised virtual races, which, for lack of other sports events,
attracted substantial interest from consumers. It is mostly the younger age-
groups that are open to e-sport broadcasts: since the outbreak of COVID-19
those aged 15-24 have spent almost 35% more time watching e-sport
broadcasts.
The postponement of sports events and the closure of bookmakers obviously
influenced the gambling sector too. Under the changed circumstances, online
casino games and online poker moved into the limelight. During the restrictions,
Australia registered 67% growth in online gambling. The desire to play online also
surged in the United States of America: here, growth of 43% was recorded
on the online poker market, most of which was due to new players, whose
number increased by 255%.
23Leisure activities – from home
Digital discoveries
What we never had enough time for:
e-learning platforms
New profession during quarantine?
5x
increase in searches for
The coronavirus restrictions and the quarantine period opened new doors for us e-learning materials
all. For many people, spending free time usefully and productively means in April
learning and further training. The role of knowledge has appreciated on the labour
market in recent decades, which is why many are using free online training
materials to improve themselves during the pandemic.
• From mid-March to April, the number of Google searches worldwide for the
phrase e-learning doubled in just a few weeks. In Hungary, the growth
recorded here was even higher, with more than 5x as many people searching
for e-learning materials in April compared to the beginning of March.
• Coursera, which is one of the world’s leading e-learning platforms offering
university courses, already provided courses for free, but there was a fee
charged to obtain the final certificate. Upon the outbreak of the pandemic it
made the certificates associated with the various courses free of charge for
several months.
The online courses include interesting and useful materials for all age groups,
from high-school students to older generations. This offers a huge opportunity for
active members of the workforce to train themselves further and learn new skills.
• On Udacity, which is also a leading e-learning platform, it would normally take
4-6 months (roughly 10 hours a week) to learn a high-tech skill, such as data
analysis, software development, digital marketing or product management. In
the current situation, however, one of these skills can be learned under more
intensive conditions in just a month. Just like its competitors, from April the
company offered 1-month’s free learning to everyone.
Language-learning apps
Around the world there is a growing desire among students and adults alike for
methods that help them develop or maintain their levels of language proficiency
+91%
from home. Many paid language-learning applications, such as Babbel or
Duolingo, strived to meet consumer demands in March by making their services
free of charge. This resulted in a sharp increase in the popularity of both apps.
The number of new Duolingo users rose globally by 40%, with a 91% increase in new Duolingo users
the United States, but the growth was even higher in France and Spain. in the USA in March
24Leisure activities – from home
Spending time inside and outside the home
Home is the new office
Working from home became the norm on account of the coronavirus, with people
spending the majority of their free time at home too. One of the long-term impacts
of the pandemic could be that working remotely stays part of everyday life, and so
1-2 days
Stable number of weekly home
office workers will need to plan to spend 1-2 days a week working from home. office days expected in the
People have thus realised that they need to convert their flats and houses to future
ensure they are convenient and effective in providing space for both working and
spending their free time.
This interest is well demonstrated by data on home renovations too: according to
a May 2020 survey by GKI and Masterplast, the home renovation and
refurbishment activity of the population barely dropped in 2020 compared to the
previous year, despite the general economic crisis. A good example of the
sustained interest is given by the re-opening of IKEA stores across Europe, which
were greeted by hordes of people across the continent.
Comfortably at home
Sticking to a morning routine helps you stay productive during the day, which is
why it is still worthwhile paying attention to how we dress. This generally gets us
ready and geared up for the given day. In the home offices that became the norm
during quarantine there is a significant need for business casual wear that is both
comfortable yet elegant. In light of this, the giants of fast fashion (H&M, Reserved,
etc.) created their home office collections, adapting to the new demands. Many
women’s magazines are focusing on this too (e.g. Vogue, Elle, Instyle),
highlighting that fashion and style are still important in people’s lives.
25Leisure activities – from home
Spending time inside and outside the home
DIY reloaded
+3000%
growth in online orders of hair
During the quarantine put in place because of COVID, people are seeking and
choosing new hobbies, which on the one hand require creativity and offer
relaxation opportunities, while on the other they create everyday value and even
clippers in April save costs during the crisis.
Since the restrictions brought on by the coronavirus we have encountered images
and posts on many social media platforms about how to make bread. Many
people baked bread for the first time during quarantine.
This was probably due to the closure of shops, an increase in the willingness to
bake as a hobby, or even just to touch base with traditions again.
Another key outcome of the isolation and the limited services available was that
many cut their hair or gave themselves manicures at home. Home beauty
products became the most sought after cosmetic products in the United Kingdom.
From mid-April, online orders of hair clippers rose by more than 3000% according
to experts at RedBrain (online shopping specialist). The list of most sought after
products also includes hair curlers, nail glue and nail sets. And adapting to the
new situation, service providers are trying to help people in the form of video
tutorials.
Recharging batteries at home
The rapid depletion of stocks in shops along with the increased free time
prompted many people to try their hand at gardening and farming. Americans
quickly emptied the shelves of seeds and bought large quantities of gardening
4x
increase in demand for seeds
implements as well as animals, particularly chickens, to maintain a regular supply from Stokes Seeds
of eggs. in March
• W. Atlee Burpee & Co, US seed producer, recorded its highest ever sales in
March in its 144-year history.
• Stokes Seeds in Canada, which supplies seeds to the United States and
Canada, received 1000 online orders on the weekend of 21 March, which is
four times the normal amount.
• In Russia, the demand for seeds rose in March by 20-30% compared to the
same period in the previous year.
26Businesses that are
capable of adapting
flexibly
That have agile operations 29
That have reserves 29
That dare/are able to advertise 30
That produce locally 31
That have simple supply chains 31
That have just opened a webshop 32
B2C from B2B – wholesalers in pole position 32
27Businesses that are
capable of adapting
flexibly
Many believe that the stability of companies really comes to the fore when they
have to face something unexpected that influences their fundamental operations.
In the time of COVID-19 a high level of flexibility is demanded of everyone, and in
most cases the previously tried-and-tested models require adjustment.
In terms of operating model, only those that have sufficient financial reserves are
able to remain afloat during the crisis, because demand is difficult to predict and
uncertain in numerous industries. Having reserves can be important for the
advertising market too, since most enterprises will only be able to allocate much
smaller sums for marketing expenses, and so those actively advertising can hope
for greater publicity and to reach more consumers.
The virus was particularly devastating for supply chains as well – the closing of
borders and the stricter safety regulations made it more difficult to move goods
efficiently and resulted in cost increases. Companies that have flexible supplier
relationships and recognise the changed alternatives for reaching consumers
were best placed to negotiate the crisis. One general lesson is that companies
with simple supply chains and who work closely with consumers seem to have
been more effective in continuing to operate without problems.
Finally, it should be noted that the new situation could accelerate processes
already under way, so working from home could become completely acceptable
in the short term, and in this respect the number of companies making agile
working methods part of their everyday routines may rise.
28Businesses that are capable
of adapting flexibly
That enable working from home
In 2017 just 5% of the EU population regularly worked from home – now, only
those who are unable to work at home at all given the nature of their job are still
travelling to their workplace. In the USA, 40% of the 25-34 year-olds who
69%
The majority of employees
previously commuted have started to work from home. We can assume many believe that working from home
companies have now realised that, perhaps not for every job, but home officing is at least as effective as
does work for certain positions, which could bring about more optimised office working in the office.
sizes/layouts and lower costs in the future. The majority of employees still want to
work in the workplace because of social contact and for reasons of efficiency, but
according to a Deutsche Bank survey, 48 percent of employees believe 1-2 days
of working from home is ideal. A frequent argument against home officing is the
drop in productivity, but the responses from employees do not fully corroborate
this statement either. In May, 69 percent of the respondents thought that they
were just as effective working from home than if they were actually in the
workplace.
That have agile operations
1200
1200 employees at Magyar
Agile working methods began to spread as an inevitable consequence of working
effectively from home. Agile procedures facilitate effective cooperation between
employees working remotely. Many traditional corporations began to apply this
trend of management science, with OTP Bank and Magyar Telekom continuing to
Telekom switched to home
work in this manner in Hungary for example.
officing based on agile
methodology In the case of Magyar Telekom, a substantial number of employees, 1200 people,
are currently working based on an agile framework, while for OTP, a smaller-scale
experiment is being conducted with around 700 people following this methodology
so far. The “daily stand-up” has proved to be a particularly useful part of working
from home, which helps to keep teams together and is able to manage the
allocation of resources. With people not being physically together, the
responsibilities of product owners have become more important as sprint planning
is even more significant with people working from home.
Other winners of the restrictions on movement could be the sole proprietors –
generally service providers – that successfully took their service online – for
example yoga instructors, trainers and coaches. Numerous entrepreneurs, mainly
holding individual or small-group classes/consultations so far, were able to try new
and scalable business models online that bring greater revenue for them whilst
their customers pay less (for example, instead of a yoga class at a studio for 10
people at 2000 HUF/person they can hold a live class for 500 people at 100 HUF
per person).
29Businesses that are capable
of adapting flexibly
That have reserves
1.5 For many companies, the drop in sales owing to the coronavirus
held out the alarming prospect of insolvency: in May 2020, 24 percent of German
years
companies were forced to apply for state aid to stay afloat.
One of the main losers of the restrictions on travel is the low-cost airlines that rely
on high capacity utilisation. Many companies faced insolvency within this
Thanks to its reserves, Wizzair segment, so operational security is key.
could even withstand a One good example of adapting to the changed situation is Wizz Air, whose
downtime in operations lasting position proves that, temporarily, liquidity is more important than profitability.
18 months. Wizz Air has substantial reserves, and with its current cash stocks and operating
expenses it could survive for around 18 months even if all its flights were to be
cancelled.
That dare/are able to advertise
A survey conducted among purchasers and planners of US media services
highlighted that short-term advertising expenditure dropped substantially on
account of the coronavirus with regard to both digital and traditional advertising.
70%
70 percent of potential
Based on data from the Interactive Advertising Bureau, 24 percent of advertisers have reduced
potential advertisers have frozen their marketing spending for the remainder of their spending
the year, while 46 percent opted for a significant streamlining of their budgets.
The fewer adverts as a result of the decline and the lack of output from rivals
means that companies who have the necessary reserves to keep advertising
could find themselves in a particularly beneficial position.
According to the recommendation of the Whitereport Media Market Crisis
Monitor, companies active during the crisis can secure a greater share of
consumer interest, and also have the opportunity to increase their awareness
spontaneously (top-of-mind awareness).
30Businesses that are capable
of adapting flexibly
That produce locally
The majority of producers that previously sold their products at markets
decided to deliver to pick-up points and to make home deliveries because of
COVID. Local producers made it possible to order their products via their own
230
The number of registered local
website, webshop or other online interfaces. The option provided by these virtual producers on the “Local
producer markets meant they could avoid the large stores and mass producers, Producer Search Engine”
whilst offering consumers the chance to support the livelihoods of small local platform
entrepreneurs.
The Hungarian state supported the digital transition as well: the Ministry of
Agriculture and the National Food Chain Safety Office (NÉBIH) set up a national
advertising platform to help local producers, which connected them with potential
customers after the markets closed. Nationwide more than 230 local producers
registered for the search database. The aim of the “Local Producer Search
Engine” is to keep sales options open for producers and to act as a “bridge”
between consumer demand and the available supply. It is envisaged that the
system will remain a key sales channel in the time after the pandemic too.
The growing demand for sustainability could facilitate the long-term survival of the
system, since cutting back on deliveries and providing direct assistance to the
local economy both send important messages to consumers.
That have simple supply chains
The coronavirus created considerable logistical challenges for many companies.
In terms of supply, there were often unrealistically high demands for certain
products (yeast, meat, toilet paper), which made it difficult to ensure continuous
availability. On the other hand, relations with suppliers became tricky because the
restricted mobility brought supply difficulties primarily in multi-level sectors relying
on various inputs. Consequently, the crisis exerted particular pressure on the car
industry for instance, or even on companies manufacturing electronic or electro-
technical products. Industries that are less influenced by global networks and
which have flatter supply relationships could emerge as winners from this
situation. Diversifying partner relations to potentially reduce vulnerability is an
important lesson going forward.
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