Workers are seen in RTE bicycles factory in Vila Nova de Gaia
A worker is seen in InCycles bicycles factory in Anadia
Workers are seen in RTE bicycles factory in Vila Nova de Gaia
A worker is seen preforming tests with a bicycle at the Abimota in Agueda
A worker is seen in RTE bicycles factory in Vila Nova de Gaia
5/5 SLIDES
By Sergio Goncalves and Miguel Pereira
LISBON (Reuters) – Portugal’s bicycle makers feared for their future when the coronavirus pandemic forced them in March to shut for two months but 2020 now looks set to be a bumper year as people shun public transport and opt for healthier ways of getting around.
Portugal, Europe’s largest manufacturer of bicycles, had to shut its nearly 40 factories and put their 8,000-strong workforce on furlough to help curb the spread of COVID-19, but is now struggling to keep up with booming global demand.
“When we closed on March 13, we thought it would be a catastrophe, we were scared,” said Bruno Salgado, executive board member of RTE Bikes, which owns Europe’s largest bike factory, in the city of Gaia, in northern Portugal.
“But it turned out to be a blessing in disguise for us,” said Salgado, standing between two busy production lines at the factory, which produced 1.1 million bicycles last year.
Related slideshow: Sectors showing resilience during the COVID-19 pandemic (Provided by Photo Services)
Gallery
Owing to the COVID-19 pandemic, almost the entirety of India has been put under lockdown and quarantine measures. This has led to some visible effects on sectors and industries all over the nation. However, some sectors such as agriculture, insurance and e-commerce have managed to stay abreast. Take a look.
The information in this slideshow is based on facts, analysis, estimates and opinions. Microsoft does not warrant that future results or events will be consistent with this information.
E-commerce
Due to strict lockdown measures, citizens were asked to quarantine themselves in their homes for several weeks. Unable to go outside, consumers resorted to e-commerce apps such as Grofers, Amazon, Snapdeal, Dunzo, BigBasket, and more, to take care of their daily groceries and other similar shopping needs. Apart from daily staples, an increased demand was also seen for disinfectants, sanitizers and personal care items. According to a Snapdeal spokesperson, the e-commerce brand “grew rapidly and swiftly reached 50 percent of pre-lockdown volumes within five days of expanded operations. Compared year-on-year, the order volumes for the first nine days of May 2020 was 52 percent of volumes in the same period last year.”
E-commerce
BigBasket CEO Hari Menon revealed, “We are witnessing nearly 2X growth in traffic and revenue and baskets are larger by 15-20 percent.” Speaking on trends in metro cities, Grofers CEO Albinder Dhindsa said, “Cities like Mumbai, Bengaluru, Ahmedabad and Pune have seen a higher surge with nearly 80 percent growth followed by Delhi-NCR and Hyderabad at a 60 percent spike in business for a 75 percent growth in national business.” Paytm Mall Senior Vice President Srinivas Mothey said that they have also “seen a surge in searches and sale of mobile phones, trimmers, laptops, masks and other consumer electronics, along with a 1.5x increase in sales when compared to March.”
Agriculture
According to a study by ratings agency CRISIL, agriculture sector is expected to see a growth of 2.5 percent this fiscal. Despite the recent locust attacks being a prime concern, it is not yet poised to be a major threat on agriculture as rabi crops have already been safely harvested and the season of kharif sowing is yet to begin.
Agriculture
However, it is imperative to take care of the locust infestation way before the sowing season comes knocking. Food grains are non-perishable and can be stored, helping the sector cope during coronavirus slowdowns. Narendra Singh Tomar, Minister of Agriculture & Farmers Welfare, said that the nation’s farm sector is functioning smoothly and there won’t be a major impact on its growth in the current fiscal. Government think tank NITI Aayog projected a three percent growth for the sector in the current fiscal.
Telecom
There has been a sharp increase in mobile data usage as the nation sees a rise in work-from-home cases. This rise has also been aided by young telecom users due to shutdown of colleges and schools. Credit rating agency ICRA Limited expects a 19 percent revenue growth for in FY2021 and an operating profit growth of 21 percent to Rs. 75,000 crore.
Telecom
According to Rajiv Sharma, head of equity research and telecom analyst at SBICAP Securities, data usage in home broadband and mobile space is expected to see a boost of 10-15 percent in India.
Pharmaceuticals
Due to disrupted supply chains, especially shortages from China, India has committed Rs. 10,000 crore to boost pharmaceutical production at a domestic level. According to India Ratings & Research the pharmaceuticals market is expected to grow three to five percent in size during FY20-21. The body said, “Continuous rise in the number of COVID-19 cases in India will result in further volume growth in related therapies. Furthermore, pharma companies’ large cash balances and sufficient headroom under debt covenants along with diversified funding sources will mitigate any impact of the ongoing lock-down.”
Pharmaceuticals
According to Charu Sehgal, Partner and Leader, Lifesciences and Healthcare, Deloitte India, “The impact on the cash flows has led many of the companies in the pharma sector to impose a freeze on the hiring process. Currently, no layoffs have been considered by companies and further decisions on increments are yet to be finalised and have been put on hold. However, unlike other industries, the pharmaceutical industry is expected to see a positive impact, on an overall basis, on its growth in this year. The market expectations are on similar lines as indicated by the stock prices which for many pharma companies had risen by 20-30 percent in April ’20 compared to the Q3FY20 period. The situation will vary with the portfolio and size of the companies.”
Insurance
Parvez Mulla, COO of HDFC Life, said in an interview, “In FY20, despite witnessing a disruption in the initial days of this pandemic, we have been able to exhibit steady performance and deliver across all key metrics with a growth of 18% based on individual and overall APE, covering over six crore lives.” According to Max Life Insurance director Mihir Vora, the sector may face certain disruptions due to logistics, however, there shouldn’t be any structural issue. He also asserted that the insurer is not as cyclical as other financials. “We don’t get impacted by the asset quality cycle… so we are in a better position.”
Insurance
The Insurance Regulatory Development Authority of India has asked insurers to cover COVID-19 cases in their existing policies as well as ensure that they expeditiously attend to the coronavirus claims. One of the factors that is positive is that it’s an under-penetrated sector and hence, the impact will be not as strong as other segments, according to Neeraj Toshniwal, research analyst at Emkay Global. This might lead to an increase in inquiries for health policies, “There will be a positive for health insurance with more people buying policies in the current scenario.”
Video conferencing apps
Due to strict lockdown norms, Indian citizens have readily taken to the work-from-home culture, along with connecting with friends and family on the social media. As a direct result, video conferencing apps have seen an increased popularity, both for business and personal needs. The app that tasted a considerable boost is Zoom.
Video conferencing apps
According to the app’s India head and General Manager Sameer Raje, Zoom has seen a giant leap from 10 million participants a day to over 300 million on a global scale. He said, “India, in that, is quite a significant chunk.” Zoom has become one of the most downloaded apps on the Play Store with over 100 million installs, competing with the likes of TikTok, Instagram and WhatsApp.
Mobile gaming
According to a report by market intelligence outfit App Annie, the weekly average downloads of mobile games broke a record figure of 1.2 billion (120 crore) in March. It also suggested that when compared to January, users downloaded 35 percent more games in March. In India, the biggest winner seems to be the uber popular “PlayerUnknown’s Battlegrounds” (PUBG). As per data from market analytics company SEMrush, around 22 lakh gamers played PUBG in May. Tejas Shah, head of revenue and distribution at Games2Win, said that around 15 lakh players have engaged in their portfolio of games, as compared to 11-12 lakh gamers earlier. WinZO Games has seen a three-times surge in online traffic, according to co-founder Saumya Singh Rathore.
Mobile gaming
According to Paytm First Games COO Sudhanshu Gupta, “Our app sees more than half a million daily active gamers on the platform spending 30 to 45 minutes. Over the last several weeks, more than 75,000 new users have joined our platform each day.” Keerti Singh, co-founder of the cricket strategy game Hitwicket, said that the app’s user number has grown 10-15 percent in the past few weeks.
Edtech
According to a survey by IT trade association NASSCOM, 14 percent of educational technology (edtech), finance technology (fintech) and heath technology (healthtech) startups expect to see a growth in revenue during the pandemic. The $10 billion edtech startup BYJU’S has seen a massive growth in traffic over the past months. Founder Byju Raveendran (pictured) said, “We just finished our best month in April despite being free. We’re expecting to double that (revenue) in the next three to four months.” The government has also been promoting several smartphone-based platforms such as DIKSHA and ePathshala for the same. In April, it also announced VidyaDaan 2.0, aimed at developing and contributing e-learning content.
Edtech
According to Vedantu CEO and Co-founder Vamis Krishna, the brand has seen a growth of nearly 10 times in terms of users ever since the outbreak. While the spike is seen across all school grades, the most has been observed for JEE and NEET courses. Another learning tool, Toppr, has seen a 100 percent month-on-month growth in number of students attending live classes. According to a statement by World Bank, large-scale national efforts are emerging in support of remote learning, distance education and online learning.
17/17 SLIDES
Worldwide, people have been trying to avoid crowded trains and buses during the pandemic, preferring to cycle, walk or jog to work and other destinations.
Cristina Latoeira, a civil servant in Lisbon, said it was the pandemic that had finally persuaded her to splash out 800 euros on the electric bike she had long dreamed of buying.
“It’s the fear of being on very busy public transport, in winter, the fear of contagion that made me choose this mode of transport that I consider much safer,” the 42-year-old said.
Like most other European countries, Portugal has recently seen the number of COVID-19 infections rise again after a summer lull.
EXPORT SURGE
Portugal exports about 90% of the bicycles it produces, with key markets in Germany, France and Italy.
As lockdowns imposed to halt the spread of COVID-19 began to ease across Europe during the summer months, distributors around the continent ran out of stock, pushing Portuguese manufacturers to raise production and capacity.
RTE Bikes is now working at full steam, producing about 5,000 bicycles a day, up from an average of 3,000-4,000 this time last year, Salgado said.
João Maia, general manager at In Cycles, a rival firm which produced 87,000 bicycles in 2019, has seen demand double.
“At the moment, we export bicycles to all countries in the world, including countries that are supposed to be major bicycle producers” such as Italy, Bulgaria and Romania, said Maia, as electric bikes were assembled in a production line behind him.
In Cycles plans to double its production lines to four from this month and already has orders for about 185,000 bicycles in 2021, Maia added.
Even before the pandemic struck, partly due to increased concerns over climate change and a move to healthier lifestyles, Portugal’s production had jumped 42% in 2019 to a record 2.7 million bicycles – almost a quarter of all those built in the European Union, according to Eurostat data.
Despite this year’s two-month factory shutdown, Gil Nadais, general secretary of the Portuguese bicycle manufacturers’ association Abimota, told Reuters he expects the country will beat last year’s record.
Lisbon civil servant Latoeira certainly has no regrets.
“I had hesitated a lot, I was very anxious whether I should make this purchase because it is a bicycle, it can be stolen,” she said. “But it was worth it.”
(Writing by Sergio Goncalves and Ingrid Melander; Editing by Gareth Jones)
