It’s interesting to look at how the COVID19 crisis has changed certain market dynamics, or even flipped them upside down.
I was looking into the micro-mobility industry recently, trying to understand the impact this all will have. I think the demand for group mobility options will be significantly impacted as long as there is no vaccine. That means that personal mobility options, to which micro-mobility vehicles belong, will be higher in demand. Would you really want to take the subway with hundreds of others if you could just cruise form A to B by yourself? Probably not. As a result, almost over night, the entire market – measured in mid/long-term demand – for micro-mobility grew. However, immediate demand fell sharply with everyone in quarantine. This in itself is such a rare industry event to see an industry’s size and potential to shoot up, but its demand to decline rapidly.
Another rare event is something I picked up in the Robinhood Snacks podcast. Apparently the immediate demand for shampoo and other personal care products has increased, but usage of it has declined. Makes sense, you want to have it at home, but you are likely not gonna use it as much. Here again, it’s very unusual that the need for a product would go down, but it’s demand would go up.
The other crazy thing we saw the other day was how the price of oil has become negative, that you’d get paid to buy oil. In essence, it’s because demand has fallen so strongly that there is now an oversupply while suppliers are running short of storage capacities.
It’s interesting to see how this crisis has been turning upside down so many principles and models we usually deem to be true. Maybe some of these trends, or similar ones, existed before, and surely not all of them will last, but rarely have we seen them at such large scale.