4 Growth Industries In The Post-Pandemic World
By Vishal Bharucha, president of VNB Business Brokers, a leading Business Brokerage and M&A Advisory firm.
The pandemic significantly impacted several industries across the world, resulting in catastrophic losses. While several businesses learned to adapt and changed their operating models to survive this economic threat, others have experienced massive dislocation and disruption, causing some to completely shut down.
This unprecedented event caused fear, uncertainty and a lack of confidence for business buyers across the globe. The good news is that it seems as though the worst of the pandemic is over. As industries slowly start to open up as the pandemic declines, businesses are now picking up where they left off and learning how to navigate the road map of operating in a post-pandemic world. However, it’s still important to be diligent in scrutinizing which businesses are for you.
As we enter this post-pandemic era, there are growth industries that would not only survive but also thrive in the post-pandemic world. Here are four growth industries you should watch to potentially satisfy your business acquisition objectives.
E-commerce not only enabled businesses to survive in the rampage of the pandemic but also unlocked vast opportunities and possibilities for entrepreneurs. While companies were laying off employees during the height of the pandemic, Amazon reported that they had hired 175,000 associates and had invested $350 million to increase employee pay during this crisis. This was made possible by e-commerce.
This is good news for business buyers who are looking for a specific growth sector that has proved to be a high performer during Covid-19. Not only will it survive, but it will continue to thrive in the post-pandemic world. Customers are now comfortable with shopping and transacting in the online space.
However, the main driving force for consumers to return to in-person shopping is the strong desire for social interaction. According to Harvard Business Review, e-commerce will continue to bring success to business owners, but it shouldn’t be their only revenue stream.
Omnichannel strategies ensure good diversification of revenue. In fact, 38% of consumers expressed their desire to continue online shopping and visit physical stores at the same time. Business buyers should look into this and scrutinize businesses that have the agile platform to deliver e-commerce and a brick-and-mortar store for consumers to shop.
Fast Food Franchises
One of the sectors that displayed resilience and continuous growth is fast food. The pandemic compelled the fast food industry to explore automated options, contactless food delivery services and digital ordering that made the customer experience more efficient.
There’s clear evidence that fast-food franchises have and will continue to flourish in the post-pandemic world. The U.S. Chamber of Commerce lists 7-Eleven, Domino’s, Popeye’s and Wingstop, to name a few, as franchises that have adapted to consumer behavior by focusing on online delivery, automation and third-party food delivery providers.
The online food delivery sector is rapidly changing at a pace that will soon change the food industry’s global landscape for the enduring future. Pre-pandemic, experts projected that the market for online food delivery would reach up to $200 billion by 2025. When Covid-19 hit, this sector had quickly risen faster than anticipated. McKinsey & Company notes that food delivery was valued at $150 billion in 2021.
In the United States, the sector showed an unprecedented growth of 8%. While customers are now more comfortable with dining in person, a significant amount of the population still opts to order online. According to the National Restaurant Association’s 2021 report, 37% of adults prefer online delivery or takeout, while 32% would be less likely to dine in restaurants due to continuous health protocols.
Ultimately, the pandemic allowed customers to experience the benefits of food delivery: It’s restaurant food in the comfort and convenience of your own home. From GrubHub to UberEats, the rising demand and market growth for this sector are two factors business buyers should consider.
Virtual events were a welcoming pivot for event companies during the pandemic. This allowed for meetings and conferences to take place remotely without the disruption of business operations. While companies have slowly shifted to in-person events in the post-pandemic world, virtual events will still likely exist and thrive with the development of a hybrid model.
In an interview with USA Today, John Capano, senior vice president of client development at Impact XM, shares that a combined virtual and in-person model will dominate industries. This is a good sign for businesses that offer virtual services to co-exist with physical workspaces and offers buyers interested in this sector a good model of success.
Industries are slowly transitioning to the post-pandemic world. As new business models arise, it is important to stay in the loop with which sectors remain relevant and which are displaying a decline. At the end of the day, the goal is to buy a business that won’t just survive but will exude the potential to thrive as the global market shifts to the new normal. Consider the businesses mentioned here specifically as they have demonstrated the biggest room for growth and development.