The outlook for the consumer technology, e-commerce and health care industries is expected to be positive, with the pandemic driving a surge in demand for their products and services. For example, super app payments, e-commerce and OTT media streaming companies, have gained popularity with customers as the COVID-19 pandemic shifts their lifestyle and consumption habits.
E-commerce companies have seen huge growth in transaction orders and gross merchandise value, despite challenges with supply chain disruption and last-mile delivery. Several large e-commerce platform players are likely to turn profitable in the next 12 to 24 months.
While resources in the health care sector have been stretched, seen particularly in the shortage of medical masks and equipment, the pandemic has also driven technological innovations in the form of digital health and telemedicine — previously hampered by regulatory and behavioral obstacles.
The upsides of digital seen now should endure into the future for these sectors. To fully capitalize on the expansionary opportunities, organizations, particularly those in a good balance sheet position, should look at acquiring companies with attractive valuations and sound businesses in similar or adjacent industries.
The real estate, FMCG and food logistics, and manufacturing industries will likely emerge transformed as a result of major shifts in supply-demand dynamics.
For the real estate sector, there is an uneven disruption with commercial retail and REITs facing the strongest headwinds as we envisage structural changes to how space is used. The increased emphasis on online retail channels and new F&B business models like cloud or dark kitchens also softens real estate demand. Take for example plans announced by Gojek and Rebel Foods to build 100 cloud kitchens in Indonesia in 18 months.
Not to say that malls will not come back to life, but real estate players will have to pivot their strategies for a new normal. Malls also have to deal with social distancing and temperature checks, which will impact footfall. At the same time, companies now realize that they may not need that much office space or are looking at reimagining that space for collaboration, therefore impacting office real estate demand.
The FMCG and food logistics industry tells a tale of mixed fortunes. While it enjoys a spike in demand in last-mile delivery during the pandemic, escalating cargo costs and productivity are of concern. Yet, the prospects are promising, particularly for cold chain logistics, given the heightened demand for temperature-sensitive fresh food deliveries and pharmaceutical products.
For the manufacturing industry, deferred consumption of goods in an economic downturn will require manufacturers to rethink business models, adapt production practices and review supply chains. Smart factories, the use of digital twins in maintaining operations, robotics and artificial intelligence will gain greater prominence. Reshoring or near sourcing of manufacturing, coupled with a renewed emphasis on domestic supply chain independence, will be on the minds of many.