@Donald bhai, I think it is easier for a single person to do this kind of second order thinking in his particular field or in his life. Honestly, I can’t imagine the next level impacts of migrant labor taking time to come back and start working on infra projects.
I’m trying to put some trends which I think can play out based on “my” lifestyle and “my” profession. I put “my” in quotes as everyone should realize that this is a highly-biased post and that trend may not actually move the needle for businesses. Will cater to this bias and impact in further posts based on how discussions evolve. If everyone from different professions come up such trend list, we can aggregate and draw some conclusions.
Firstly, I work in a Softwar-ish Engineering role and so below is list of trends which can materialize from WFH culture introduced in IT companies.
Two factors playing out for WFH culture to gain momentum:
- Software companies right now don’t have a choice but to explore this option during current times. This will force them sharpen their WFH tools and companies might see that real ROI of WFH models is much better than estimated ROI
- Companies are going through tough times and want to preserve money. Given they are anyways sharpening their WFH tools and able to continue business using them, they might as well save money by avoiding to commercial real estate costs (For eg: Look from the eyes of a startup which is struggling for funding due to current external environment)
To bring in some practicality, WFH momentum will not materialize in A* / A category IT companies offices like Google / Microsoft / Amazon but I think this will be more of a trend in IT companies from low-end to middle-end.
Second order trends due to WFH momentum on various industries “assuming” WFH momentum will actually happen =>
Food:
People eat food from office cafeteria while working from office, but eat home cooked food / order online while working from home. Kitchen tools helping people to cook food easily, ready to cook foods might see some tailwinds. One can look out for Kitchen appliances companies to check if they come up with some innovative products. Office food catering companies might face some trouble. This would also increase sales in urban grocery stores.
Example Businesses with headwinds: Elior Catering
Example Businesses with tailwinds: Zomato, Swiggy, Tasty Bite, Marico, HUL, Big Basket
Electronics:
Spending 8 hrs in front of laptop sitting on Sofa / Bed is bound to cause permanent damage to backbone. Some of my friends already bought office chairs, desktop tables, monitors, spike guards. We might not see incremental demand as this is just replacing office demand with home demand. But one thing which stands out is Consumer AC. I’d prefer an AC in my room if I am to WFH till the time I can see.
Example Businesses with tailwinds: Voltas, Symphony
Entertainment:
I end up opening YouTube.com, Dominion.games while working from home while that is not the case when in office. Digital screen’s share of time will increase a lot and will be tailwinds for Digital Ads and Digital entertainment like OTTs.
I also think this will create a tailwind for exhibition companies like PVR (contrary to what most people are concluding). Working from home from Monday to Friday will make you feel like going out on weekends. You end up watching a movie in theatre, eating out with your friends.
Example Businesses with tailwinds: Google, Zee Entertainment, PVR, Inox Leisure, Wonderla
Personal / Skin Care:
You don’t use same amount of Hair oils / Serums, Face creams / Gels, bla bla bla while working from home. I haven’t used those stuff since last couple of days and don’t see myself using them in near future too. Just a simple bath and hand wash / face wash, full stop.
Example Businesses with headwinds: Marico, HUL
Shopping:
In last two weeks, only clothes I’ve been using are shorts / pyjamas / random T-shirts. All the good casual wear clothes / formal clothes / shoes are just sitting in the wardrobe. Likely to stay that way if WFH momentum stays. People will end up buying more Athleisure and avoid buying too many premium-ish clothes.
Example Businesses with headwinds: Aditya Birla Fashion, Arvind Fashions, Relaxo, Bata
Example Businesses with tailwinds: Page Industries, Lux Industries
Auto:
WFH momentum would lead to less usage of cars and that can lead to fall / lower growth in sales.
Real Estate:
Fall in commercial real estate demand due to WFH momentum is more or less derived by everyone. Real Estate developers might shift their focus onto Residential real estate projects. They might offer apartments which have dedicated space / setup for WFH. One can watch-out for such builders if WFH momentum actually plays out.
Pharmaceuticals:
People don’t get to spend time in the sunlight as there is no travelling to and from office and we might see a spike in Vitamin D deficiencies. Already see some discussions about possible increase in births after nine months due to current lockdown. May be there are some pharma companies focussed in these areas.
I want to re-iterate that I have just listed the trends and businesses impacted due to that. It may or may not move the needle for the company and trend materialization may not necessarily increase free cash flow for the company and may not give abnormal returns. We can take those company specific discussions to their respective threads.
Discl: I have mentioned example businesses for most of my observations but I request everyone to analyze if they will actually move the needle before investing. I may / may not have investments in the companies mentioned above. Please consult your investment advisor and do your due diligence before investing.