Pandemic: threats and opportunities for the economy

In the face of the fight with coronavirus, it is easy to become pessimistic because difficult times lay ahead for Polish and global economy. Stock exchange indices overseas and in Europe tend to fall, the phase of the “green island” in our country will definitely come to an end. However, the situation is not completely negative despite striking pessimistic headlines in media. Let’s try to assess threats and opportunities for Polish economy. Because there are many chances as well. However, it is just the analysis of the current situation and an attempt to look for potential opportunities in floating, dynamic circumstances…

When there appear such upheavals, which accompany global pandemic, there arise some myths, but also self-evident truths, which lie behind many businesses. Let’s consider, for instance, such an utterance: “People always have to buy clothes”. I think such a thought has crossed the minds of the majority of fashion brands owners. And it is just. Until the moment it turns out that people cannot go shopping. Restrictions concerning the activity of shops with the area of more than 2000 m2 hit for example footwear and fashion brands directly. It should be noted that many companies made a short-term strategic mistake because they focused on the biggest shopping facilities. Of course, there is a hope in e-commerce, but I will write about it later. The “convenience” model has proven to be a good solution in such a situation. The model consists of small retail parks in small towns, situated close to the customers and focused on basic needs such as groceries and drugstore products. Such a way of expansion is chosen by more and more companies, which we serve. What is more, such chains as Rossmann or Biedronka are currently reporting the shortage of staff. In my view, current events will considerably change the commercial sector in Poland. Strategies will shift towards the diversification of activities based not only on prestigious locations in big shopping centres, but also in smaller shops or parks, which ensure greater shopping convenience.

Most of the crises and upheavals result in some opportunities. The current situation conduces to the growth of “safe havens”, for example “great currencies” such as USD, EUR or CHF compared to emerging markets. Companies from fin-tech sector, which deal with on-line payments, bank services and remote transactions, have a great opportunity to increase their value. These institutions, which previously took care of this aspect of service, for example mBank, gain advantage. The companies, which diversify their activities into real and virtual world because on-line shopping should gain popularity as additions to the shops in real locations, are in a similar situation. Another issue is a safe and fast delivery method. In this case also such companies as InPost have a huge potential.

In the reality of the 21st century and the crisis, which is knocking at the door, it is impossible not to notice the potential for renewable energy sector. Attentive observers and analysts note that ensuring energy security and independence should become one of the priorities of companies and households. We can expect the growth of awareness within the scope of increasing self-sufficiency both on regional and unit level. In the face of such a situation the market for the distribution of the systems, which streamline “private” small power plants and the collection and purification of rainwater for the private use, may be developing dynamically.

In the long term, we can notice a potential opportunity for the companies from medical sector, which currently needs a huge support. In any case, interesting changes are taking place in this filed – in the United Kingdom Formula 1 teams have contributed to the production of essential respirators. These are companies, which have great equipment and technology at their disposal, but currently are on hold because races around the world have been cancelled. That is why their potential is being used to help save lives. Polish fashion companies such as 4F, CCC or Kazar, as well as LPP also declared help or helped health services in a financial, material or technological way.

Currently, the resonance of the pandemic for the economy cannot be foreseen. That is why businesses and entrepreneurs focus on cost-cutting and wait for stability. We do not know how helpful governments’ support will be, especially taking into account the fact that in Poland it is difficult to call the “Shield” effective. During the crisis investments are suspended, costs are lowered and the weakest ones close businesses. It is difficult to reverse the trend because only new investments result in new workplaces. On the other hand, without new workplaces the amount of money in customers’ portfolio decreases, which means that they buy less and less and that’s where it all falls down. Such a situation results in further drop in companies’ revenues. In all this chaos one thing is certain: no one knows when it will all end.