The COVID-19 pandemic effectively put a halt on the global economy in 2020. The economic disruption caused is so far-reaching that its effects will remain in the air for years to come. The lockdowns around the world severely dragged down most economic metrics, and there has been very little for investors to cheer. However, now that we’ve almost reached the second half of 2021, the economies are reopening, and we’re starting to see new prospects and opportunities that are radically different from the pre-pandemic world.
Here are five trends that investment groups predict to have the potential to be profitable in the post-pandemic world economy:
The pandemic is still here, and it looks like it’ll be around for a while more. Till the vaccines are properly rolled out, people will be hesitant to be out in the open. This is why online retail has seen so much success in the last few months. Shopping online for goods and services has become an important part of the “new normal.” With its high smartphone and internet penetration rates, the sector has the greatest potential in the Asia-Pacific and the Middle East, with Asia already witnessing more than three-quarters of online shopping done through smartphones. The Middle East has also seen robust growth in online retail services.
Streaming and online entertainment services
The pandemic has also helped break the hegemony of theatre chains and has given more bargaining power for online streaming services. Production houses worldwide were forced to release many of their big-budget productions through over-the-top (OTT) services like Netflix and Prime Video. The previously dominated sector by these two has now become more diversified, with more OTT services coming up. The surge in demand for online streaming is expected to continue for a long time since theatres around the world haven’t yet completely opened up.
Sustainability is easily one of the lucrative investment opportunities of the year, with many predicting that impact investing and socially responsible investing are about to get a boost in the coming years. The heightened awareness about climate change and other harmful effects of various industries worldwide has contributed to an increased collective demand for socially responsible businesses. Many reports have suggested that millennials and Gen Z demographics, which are currently driving consumer demand, prefer to buy from environmentally sustainable “green” brands. In the last few decades, the Middle East has seen an immense rise in renewable energy potential due to its high solar potential. Investors should also note these transformations in the value systems held by the consumer base and invest their money smartly.
The changing geopolitics and the increasing discomfort in the West about China’s quick ascendance will play an influential role in the growth of businesses in the coming years. Since China is better placed than others to increase its share in the global economy, it is expected that the investors in the West will be keen to invest in local businesses in their own countries to resist Chinese hegemony. The fact that the origin of the pandemic is China has not helped either. These anti-China sentiments will create temporary opportunities for local companies to thrive, as has already been seen in the case of India. Investors should consider the effects of protectionism and trade conservatism and the increasing closeness between the USA and various Middle Eastern countries while making their investment decisions in the post-pandemic world.
Pharmaceuticals and Medical Supplies
The supply shocks in various medicines and equipment like PPE kits that we witnessed during the height of the pandemic have highlighted the inadequate attention paid to R&D in the pharma and medical equipment sectors. In the coming years, it can be expected that governments and private players around the world will be keen to focus on developing these industries. It will be a good idea to keep an eye on the trends and investment opportunities in the sector. The potential is particularly lucrative in emerging markets like India, where both the number of new businesses coming up and the domestic demand are running high.
All in all, 2021 is a crucial year for investors since it offers us a glimpse of how the post-pandemic economic landscape will look like. Many sectors will face irreversible alterations in their trajectories; some will face a slowdown, and some will see tremendous growth. It is important to invest cautiously and boldly with an investment company’s assistance.