Judging from the on-going financial turmoil as well as the struggles that businesses experience, the recovery after the pandemic will likely be slow and fragile. While world leaders are working hard to curb this deathly virus as well as its economic and societal consequences, the consumer market has slowly undergone an immense structural change.
From panic buying and cocooning to stockpiling hygiene supplies, the health crisis that started months ago, along with the resulting economic disaster, is fundamentally changing consumer behaviours. Consumers are more in favour of products and services that are healthier, trustworthy, environmentally friendly, and most importantly, more flexible during times of crisis. Such changes, undoubtedly, has created both new opportunities and challenges for businesses.
As such, individuals and businesses need to start recognising these unprecedented changes and begin to consider and prepare for life after the pandemic. Although it is important to mitigate the economic shocks, looking beyond the short-term benefits and building a more resilient and sustainable future is equally important.
The Survival of the Fittest
There are many ways to achieve sustainable recovery and one of the most effective ways is strategic assets allocation. By investing in promising industries that will continue to thrive after the pandemic, investors will be able to enjoy long-term monetary benefits as well as be protected from an unanticipated shock like the coronavirus pandemic. The identified investible industries are as follow:
FinTech & E-commerce
The Fintech industry has proven itself as a probable solution to the restricted access to various services and products due to the coronavirus outbreak. Besides having access to a digitised analytical system that helps in business endeavours, FinTech companies also offer investors flexible and cost-cutting solutions to the problems they face during a financial crunch.
The emerging e-commerce market around the world also contributes to the necessity of these FinTech sectors in the long run. FinTech enablers and infrastructure providers are emerging as a promising investment hotspot due to consumers’ needs and their relevance in daily life even after the pandemic. This has propelled FinTech as a promising investment sector even after the pandemic as the technological benefits they offer will still be relevant in the tech-savvy post-pandemic world.
However, it is important to note that not all sectors within FinTech have a burgeoning prospect. The once highly sought-after financial sub-sectors, such as challenger banks, foreign exchange, wealth management as well as alternative lending are declining in needs due to the distrust between consumers and the services caused by the detrimental nature of the current financial landscape. Besides that, the rigid nature of the financial sector also contributes to the downfall of these FinTech sectors.
Renewable & Green Energy
It is well known that climate change is a prevalent world problem even before the outbreak of coronavirus. However, as the economic fallout worsens across the world, with stocks and oil prices collapsing, investors are turning their attention towards a more long-term and safer investment, which is renewable energy.
Though it is still an emerging market, the potential of the renewable and green energy industry is one that cannot be ignored. For example, projects like restoring degraded forest lands and landscapes not only will create many jobs in the short-term, it will also generate net benefits of a hundred billion dollars from watershed protection, better crop yield, and other forest products in the long-run. Moreover, such a project can also protect local ecosystems and biodiversity, creating a more sustainable economic and living environment.
In addition to that, the exploration of renewable and green energy is the future lifestyle as consumers nowadays are more health-conscious and environmentally sensitive. As such, the renewable and green energy industry is emerging as one of a promising investment hotspot even after the pandemic.
Healthcare
As the efforts in combating the coronavirus pandemic continue, the business opportunities within the healthcare industry will continue to flourish. From the research and development industry to the medicine manufactory industry, the healthcare sector is evolving rapidly to drive more efficiency and create new value for all stakeholders. Prominently, digital transformation in healthcare presents a huge market opportunity, reaching an estimated value of US$210 billion by 2025. Advances in digital healthcare technologies (Refer to Figure 1) that are focused on extended patient engagement are found to help in cost-saving and eventually delivering more value in the long run.
Moreover, healthcare has always been an essential sector in every country across the world. It is especially so in the aging developed countries. Also, given that the world is currently undergoing a never-seen-before pandemic, world leaders will continue to prioritise the development of their healthcare system to prevent and prepare for similar catastrophe in the future. A study revealed that the medical technology market is expected to reach US$133 billion from just US$88 billion in 2015 in the Asia-Pacific region alone. Evidently, the healthcare industry will continue to be a promising investment industry even after the pandemic.
How to Achieve a Sustainable Recovery?
Besides investing in a promising industry, there are some other ways for one to achieve a sustainable recovery after the coronavirus pandemic.
Identifying Suitable Stimulus Packages
To mitigate the economic shock, countries around the world have introduced various stimulus packages to boost business growth and help them cruise through these challenging times. However, different aid packages will result in different outcomes, some will even create risk and challenges rather than opportunities. As such, one needs to identify a stimulus package that is suitable for his or her business long term plan to achieve sustainable business growth.
Debt Financing
In such difficult times, sound planning and management are essential for SMEs to weather this financial storm. Among the pandemic-proof strategies, proper funding is the most crucial as it offers immediate relief to possible financial burdens SMEs may face during the economic downturn.
While there are many ways for a firm to raise funds, the most common and effective option during an economic crisis would be debt financing. Funding a business through the use of debt financing is critical for startups, but also beneficial towards companies wishing to expand their businesses.
Prepare for A Sustainable Future Now
As the saying goes “every crisis brings opportunities”. The pandemic may have just provided an opportunity for businesses to re-evaluate their business strategy and plan for a sustainable future beyond the coronavirus pandemic. As a one-stop solution provider, Desfran offers a wide array of corporate advisory solutions for business by staying on top of the trends in various sectors. Contact Desfran today to pursue your options for growth beyond this pandemic.
References
Thinking ahead: For a sustainable recovery from COVID-19 (Coronavirus). Blog.worldbank.org
The changes covid-19 is forcing on to business, Economist.com
COVID-19: The impact on consumer goods, Accenture.com
Medical tech firms drawing more investment amid crisis, StraitsTimes.com
Fintech in coronatimes: Why some sub-sectors are especially vulnerable in a downturn, Sifted.com
The Fintech Winners and Losers of the COVID-19 Pandemic, Fintechnews.sg
2020 Global life sciences outlook, Deloitte.com
