(Editor’s note: This post about businesses in Portugal is part of our Tuesday Business Briefing, which includes the Tech Tuesday series and the EIndhoven Business Briefing.)
While the global economy has been greatly affected by the outbreak of COVID-19, some businesses in Portugal have actually managed to flourish – particularly because of the pandemic. There has been a significant increase in the demand for certain products particularly because of the prolonged restrictions and lockdown.
Evidently, confinement has led to the change of habits and needs of consumers. There has been an increasing demand for products which made domestic spaces more comfortable as well as suitable for work. There has also been a significant rise in the usage of electronic payment methods.
So, the question is: who has actually done well out the pandemic?
There was a big demand for construction material. In 2020, Cimpor, Portugal’s oldest cement factory, reported a 10-percent increase in sales volume in the domestic market compared to 2019. During the first ten months of last year, cement demand reached its highest average annual value since 2011.
I find that quite believable. Lisbon is a city with a lot of construction work taking place here and there. This could be due to the increase of investments in Portugal. However, construction work was exempted from COVID-19 restrictions. Therefore, businesses were able to carry out building or refurbishing as normal during confinement.
Do it yourself
For similar reasons, DIY materials were in demand by people who took the extra time they have at home to catch up on their long-forgotten DIY projects. Carlos Barbot, the CEO of Barbot, a Porto-based international paint, ink and coatings company, confirms that since the pandemic, Barbot had grown 12-percent more globally as well as 15 percent domestically. In particular, they sold a lot more paint in the year 2020.
If construction materials and DIY have done that well under the pandemic, then, and according to the same logic, the furniture industry should have experienced high demand as well. And it did. Two of my friends here in Lisbon bought new desks replacing their perfectly functioning ones for more comfort while working for lengthy hours from home. Homes had and still have several simultaneous functions including working, schooling for children, entertainment and exercising.
The year 2020 was the best year for Paulo Antunes, the Porto-based international furniture company, as it achieved 20-percent sales growth. However, Paulo Antunes warns that with the increasing vaccination and things going gradually back to normal, people will prefer to put their money in travelling and outings and the reverse may actually happen with furniture as demand may significantly decrease.
Canned tuna and sardines
The Portuguese are known for their love, and deep appreciation, for fish. I am not sure if it is that or for other reasons, but Porto-based Ramirez (which is one of my favorite tuna brands- totally recommend!) had a global growth of 30 percent in 2020. Manuel Ramirez, who has been running the 168-year-old company for the last 50 years, confirms the significant increase in demand for their canned fish especially when the pandemic first started.
March 2020 delivered a 300-percent growth for Ramirez.
One reason for that could be that canned products do well in emergency circumstances and can store for ages. It could also be related to people trying to focus on healthier food options during lockdown. A friend of mine did indeed switch to tuna salad for most of her dinners since she was no longer going out for larger meals with friends.
Electronic payment apps
This is a case quite particular to Portugal as we have the French MB WAY app which connects you to your Portuguese bank account and allows for quick payments anywhere you go using only your phone number and the number of your recipient. I personally, only started using this app after the start of the pandemic. Social distancing and the need to be in as little physical contact with surfaces, objects or people as possible encouraged people to resort more to electronic payment methods.
MB WAY reached its peak between July and September of 2020, with a continuous rise in the volume of transactions until the present moment. In December 2020, the volume of transactions conducted by MBWAY increased by 286 percent year-over-year! More and more businesses in Portugal allow you now to pay via MBWAY.
How sustainable is this growth for business? We don’t know. At the moment, several businesses in Portugal such as hospitality and footwear are trying to recover this summer. Will we really see a reverse in what people put their money into? Or is it safe to say that whatever takes place from home or in cyberspace will remain to maintain relative stability, if not a relative growth as well?
Only time will tell!
About the author:
Sarah Nagaty is a PhD researcher of cultural studies in Lisbon. She’s lived in Portugal for three years.
As a student of cultural studies, Sarah is drawn to what connects people from different backgrounds to new cultures and places, how they relate to their new surroundings and what kind of activities they could engage with in their new hometowns.
See all of Sarah’s Dispatches posts here.
See Dispatches’ Lisbon story archive here.