There can be many reasons, internal or external, for the success or failure of a business. If you know what you’re looking for, you can often spot the signs that indicate that the enterprise is doomed to fail or geared for success. A lackadaisical approach to managing routine things such as electrical maintenance or staff training can be a symptom of something seriously wrong and a precursor to failure.
However, in 2020, the failure and success of many companies were dictated by one key factor: the COVID-19 pandemic. An exhaustive list of failed companies in 2020 would run on and on. So we’ve put together a round-up of a few noteworthy successes and failures in business this year.
Big Businesses that Found Success in 2020
Despite spending £3 billion ($4 billion) on mitigating COVID-19, Amazon saw all-time high stock values during 2020. As shops remained closed and people stayed home during global lockdowns, online shopping received its largest-ever boost. Furthermore, the brand’s cloud services also found high demand as people and businesses’ online activity increased more than ever.
Netflix, the world’s largest paid online streaming service, gained more than double the number of subscribers in the first quarter of the year than it had predicted, with seven million new subscribers just from Europe, the Middle-East and Africa. For people trapped in their homes, Netflix proved to be a life line to entertainment.
The pandemic also drove people online to make safe, contactless payments. Many users who were otherwise not used to PayPal turned to the platform for the first time in order to make online payments at physical stores without making physical contact.
Facebook’s billions of subscribers used the platform more than ever during the COVID-19 pandemic, allowing the social media company to increase its revenue from advertising. Many businesses curtailed their budget for Facebook ads. Still, the increase in the number of users translated into significant ad revenue.
Online store builder Shopify overtook eBay to become the second-largest e-commerce platform after Amazon. Businesses made heavy use of the platform to sell their products as their customers turned to online shopping. Shopify had around a 62% increase in the number of stores created on its platform during the March-April period alone.
The large Chinese population locked in their homes during the pandemic turned to online gaming on Tencent in large numbers, with subscribers reaching 112 million. The social media app WeChat also witnessed a large number of users during the period. Tencent acquired and invested in companies and hi-tech start-ups in 2020 at the same time as many companies were shutting down.
Big Businesses that Failed in 2020
Uber Technologies saw a decrease in customer bookings on its ride-share platform of 80% during lockdowns. The company arguably only survived the year thanks to an increase in revenue from Uber Eats, its food delivery platform. Regardless, by the third quarter of the year it had lost revenue of around £5.4 billion ($7.2 billion).
Lord & Taylor
The USA’s oldest department store chain Lord & Taylor joined the band of companies that filed for bankruptcy in August 2020. The store had to close its 38 branches starting from March. The 200-year old establishment had already passed through many hands when it had to face the ill-effects of the pandemic, which seemed to be the final straw.
Packaged foods industry titan Kraft Heinz, which has 26.7% of its shares held by the Warren Buffet-led organization Berkshire Hathaway, saw many setbacks during the year. As a result, it had to sell off 25 million shares, downgrading the company.
The Hertz rent-a-car service was affected severely by COVID-19. It lost most of its customers in a short time when trips were cancelled and people stayed home because of the lockdowns. When there was no hope in sight to pay back its £14.26 billion ($19 billion) debt, Hertz had no alternative then to file for bankruptcy.
Debenhams, established in 1778 making it the oldest retail chain in the UK has announced their decision to liquidate all assets. All Debenhams stores will be operating until this Christmas, following which they will sell off all remaining contents of its stores. They will vacate all 124 stores in the UK, and the properties will be transferred to new owners partly or entirely.
The pandemic lockdowns forced the international fitness brand, which has hundreds of gym centres around the world, to stay idle. Gold’s Gym was forced to file for bankruptcy in May 2020 when 700 fitness centres remained closed, declaring that 30 centres would be permanently closed. In August 2020, RSG Group GmbH, another fitness giant that owns the McFit brand, acquired Gold’s.
The above lists are not exhaustive. There are also big names like Apple, Google, and Microsoft, as well as brands like Zoom Communications, that reaped the benefits of the increased online activity of the year. Besides IT, pharmaceutical companies like AstraZeneca gained a big name for themselves by developing a COVID-19 vaccine in collaboration with Oxford University.
The above lists show that the pandemic has affected many companies severely, include some world’s biggest names. At the same time, a lot of businesses escaped the year unscathed and some even saw enormous success by leveraging opportunities presented by the changing environment.