Coronavirus scare a boon for online grocery sales and telcos

Reduced outdoor time meant higher demand for online purchases and data streaming.

Grocery sales along with telecom consumption will likely surge amidst growing Coronavirus threats, mimicking the trend during the 2003 SARS outbreak in 2003, reports DBS Equity Research.

The boost will be due to consumers minimised exposure outdoors as they stock up on essentials, said the report.

But brick-and-mortar stores would likely step aside as online grocery shopping will benefit more from the unfolding health scare, the report added.

With people expected to significantly reduce the time they spend outdoors, DBS forecasts that telecom and e-commerce data consumption companies will see even higher demand, with telco companies such as Singtel benefiting the most. Further, the demand for online streaming is predicted to further increase should schools get shut down.

Meanwhile, protective measures by the general public are sighted to augment the preference for private hospitals as well as boost medical gloves consumption. As masses turn away from congested public healthcare stations, admissions to private clinics and hospitals are expected to increase, said DBS.

The rise in medical glove usage on the other hand is sighted to translate to better Q1 earnings for glove makers such as Riverston. Prolonged outbreak would also mean increased glove shipments, noted DBS.

Meanwhile, a separate report by UOB Kay Hian forecasts that the sectors of airlines, hospitality, gaming and retail will underperform as governments enact travel restrictions whilst consumers may voluntarily curb travel and out-of-home activities. "That said, the SARS epidemic was an unprecedented event, so there is a reasonable possibility that the coronavirus is more effectively contained as governments are now better prepared to react vs 2002-03," UOB analyst Adrian Loh added.