The big keep getting bigger in the pandemic-rearranged economy

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The pandemic is playing to the strengths of the biggest digital players, as seen in their earnings results for the quarter ending in March.

Amazon.com Inc has gone on a hiring spree to keep up with a surge in demand from millions of homebound consumers. In what is normally a slow quarter, sales jumped 26% to a record US$75.5bil , though earnings fell 29% compared with the same period in 2019.

Now, antitrust experts fear that as the largest companies increase market shares, decimated firms might disappear or have little choice but to sell out at fire-sale prices to stronger rivals – and that regulators and lawmakers will be under pressure not to stand in the way as the economy struggles to get up off its knees.

"It will be harder for younger firms to survive, and they are the potential new competitors,” Philippon said. Jean-Paul Agon, the chairman of French cosmetics giant L’Oreal SA, alluded to that possibility on an April 16 earnings call."It’s unfortunate, but it’s the Darwinian side of this industry,” he said."We are pretty sure to be able to get out this crisis even stronger. So will there be opportunities for interesting acquisitions? We will see.”

 

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