Opportunity Analysis in the post-covid scenario in Ecuador

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The pandemic generated by COVID-19 has caused gigantic complications over the development of the Ecuadorian economy. In a context of low economic growth, large inequality gaps and alarming levels of poverty; quarantine and physical distancing measures have only made it impossible for a worrying number of incorporated companies and enterprises to survive. The weakening of social cohesion, precarious labor markets and high levels of corruption are institutional factors in Ecuador that guarantee an extremely complicated socioeconomic reality. But, Are there opportunities in one of the most serious public health crises in history?

At first glance, the situation is dire, but while analyzing it in detail, it is possible to identify economic segments with growth potential. Global confinement as a consequence of the pandemic has accelerated the current trend of “e-commerce”. This trend basically consists of buying and selling products or services through the internet. Contentsquare, a leading company in digital behavior analysis, ensures that the most advantageous sectors have been food and health. Likewise, they explain that the teleworking modality has promoted the hiring of telephone and computer services.

There are several predictions in the financial market about which would be the sectors with the greatest opportunity in times of pandemic. However, the vast majority agree that there are very favorable scenarios for food, logistics and health segment. Thus, supermarkets and companies specialized in the distribution of goods, as essential items, would remain in relatively stable financial conditions. Likewise, the pharmaceutical sector would present positive results since it provides those goods and services that are extremely necessary to face the effects of the current crisis.

Pharmaceutical sector

The health crisis has led to substantial increases in the demand for medical supplies. There is no drug or vaccine class for coronavirus yet. However, the increase in demand both in the short and long term is assured for products such as disinfectant gels, medicinal alcohol, surgical gloves, among others.

Similarly, certain drugs and vaccines have become the source of support for the pharmaceutical industry. Pfizer has seen an unexpected surge in sales as its vaccine, Prevnar 13, treats severe cases of pneumonia with high death rates. Another similar case is Novartis, which has obtained gigantic economic benefits in the hydroxychloroquine offer. Thus, several leading companies in the pharmaceutical industry have registered potential increases in sales of drugs or vaccines that treat certain effects of the coronavirus.

Technological Sector

Due to restrictions imposed by government authority, the business sector has desperately sought ways to maintain its level of productivity. Thus, several companies that provide video conferencing services have fully benefited. The technology company Zoom has increased its share value in an extraordinary way and Microsoft has reached 44 million users. The business conglomerate has seen the flexibility provided by virtual office activities which in the long term ensures the profitability of this segment in the technology sector.

Logistics and distribution sector

Although supply chains have changed during the pandemic, the logistics and distribution sector has experienced a huge boost. The main reason is that food deliveries and online shopping have rescued thousands of people who cannot leave home. In the global context of 2019, e-commerce retail sales totaled $ 3,53 trillion. Statista, the world leader in market statistics, projects that retail revenue will grow to 6,54 trillion in 2022.

Furthermore, according to Doug Anmuth, an analyst at JPMorgan Chase & Co, the mandatory closure of physical stores is resulting in a shift towards online commerce, benefiting the e-commerce sector. As the pandemic persists and social distancing measures increase, demand for grocery delivery services is anticipated to increase industry revenue by 7,6% during 2020, to a total of 5,5 trillion. Dollars. National operators such as UberEats, Glovo, Rappi, among others, are well positioned. In this way, its expansion in the market and increase in income from services is guaranteed.

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