Deutsche Welle (English edition)
German winners and losers of the COVID-19 pandemic
The coronavirus pandemic hit the German economy hard in 2020. While some suddenly had to fight for their very existence, others recorded unprecedented growth. We take a look back.
This has been an unprecedented year in many ways. In times when we are encouraged to reduce contacts, package delivery services have thrived. This made e-commerce platforms the top winners of the coronavirus pandemic. And in this winner's circle, Amazon comes out at the very top.
Even before the pandemic, Amazon made record profits. But an outcome like in 2020 is new even for Amazon. The company made a profit of almost $100 billion (€81.5 billion) for the third quarter alone. It will most likely be more rather than less in the fourth quarter. The latest lockdown measures plus the busy Christmas season will probably lead to further growth.
Deutsche Post is probably just as glad about the growing numbers of packages that are being sent at the moment and CEO Frank Appel expects record profits for the year.
Yet while online shopping is booming, in-person retail has suffered. Avoiding contacts often also meant going without a shopping spree in the city — which caused severe revenue losses for brick-and-mortar stores.
Obviously, firms that deliver much needed medical equipment and medicines have thrived. Among them BioN
Tech, whose vaccine was the first to be officially licensed in the EU, as well as the medical company Drägerwerk, which produces ventilators and face masks.
Losses for gastronomy, growth for delivery services
Since March, restaurants have had to close or were only able to
operate under strict restrictions. If cooking was not your strong suit and you became hungry, picking up food from a restaurant or having it delivered were the only options left.
It was a real stroke of luck for Delivery Hero. The delivery service was even able to ascend into the most important German stock index, the DAX. The share value of the German-based company more than doubled this year.
Restaurants on the other hand did not benefit. With their offers for delivery or takeout they were not able to compensate for the losses of costumers eating at the restaurants.
Office communication is changing around the world
Video calls were already a thing before 2020. But working together only via video conferences? Until the pandemic this was hardly an alternative that could substitute for personal meetings. Now video calls are common for many employees, especially in offices. They simply belong to our "new normality" going forward.
One company that benefited immensely from this is ZOOM. In busy times the company recorded more than 300 million people participating in virtual meetings and the number of paying customers more than tripled. This is also reflected
in their profits, which almost doubled to more than $622 million.
Aviation and tourism industry hit hard
We have never traveled by plane as much as just before the start of the pandemic. In 2019, the aviation industry flourished. As the pandemic began, this changed drastically. International travel was not possible anymore or was severely restricted.
Financial losses in the billions were the result for airlines around the globe. Airport operators and other service providers involved in the industry also struggled as a result of restrictions.
A German aid package worth billions was set up to help Lufthansa out of the crisis without having to declare bankruptcy. Travel warnings and cancellations made it a year full of horrors for the whole tourism
industry. Travel agents, hotels, tour operators — everyone in the industry was affected in a bad way.
Trade fairs go mostly digital
Many big trade fairs had to be called off this year. This not only hits the organizers but also trade fair contractors and other service providers working around the fairs.
Despite the coronavirus, Messe Frankfurt, a big German trade fair and event organizer, organized more than 150 events worldwide this year. Turnover and income still suffered immensely, though. Since then business in China has recovered by almost 80%. Other events still just take place online.
Meanwhile, fairs in Europe are still heavily restricted. The biggest international aviation fair, the Paris Air Show, has already been cancelled for summer 2021; the Berlin agriculture and consumer fair International Green Week will take place entirely online in January 2021; just like the Hannover Messe which is also set to be conducted online.
Car manufacturers weakened
Even before the coronavirus, the car industry struggled because of the rapid changes in technology. During the pandemic Germany's most important industry faced a sharp decline in demand on top of these struggles.
Worldwide fewer cars were built this year. Many manufacturers and suppliers tried to cushion the consequences of their production standstills and job cuts with short-time work programs for their employees.
Still their cry for financial aid was not heard like the industry had hoped. They received government support, but only for electric-powered or hybrid vehicles.
For manufacturers like Tesla, who solely rely on electric engines, sales went correspondingly well. This made investors believe in a bright future — Elon Musk's company is now the biggest manufacturer of electric cars worldwide with a market capitalization of over $500 billion.
Free time activities online only
For months big events have either not been possible at all or face harsh restrictions. It is
a decision that hit artists, musicians, athletes and organizers alike.
The German ticketing company Eventim recorded a nearly 80% drop in sales between January and September in comparison to last year. What's more, the artists on stage and the technicians backstage all the way to the service personnel had little or no chance to work at all this year.
Sport clubs were hit hard as well. As training together became either impossible or severely restricted, many clubs are fighting for survival.
As we cannot get together to enjoy our time, many have escaped into virtual worlds for pleasure. Online gambling operators and online simulations got many new costumers.
At the same time educational offers for further training online also became more popular. Steaming services like Netflix, Amazon Prime or Disney+ also benefited from the pandemic and the corresponding stay-athome orders. It was indeed a year like no other.