Post-Pandemic Decline: The Struggles Faced By Pandemic Winners

The COVID-19 pandemic reshaped the business landscape, turning struggling sectors into overnight successes. Industries like video conferencing, home fitness, and e-commerce soared as global populations adapted to lockdown life. However, as we transition into a post-pandemic reality, these once-thriving companies are now encountering the “Post-Pandemic Decline.” This phase brings new challenges as their extraordinary growth stalls.

The downturn is marked by diminishing valuations as societies revert to pre-pandemic norms. This article delves into the fates of these pandemic winners, examining the downturns they face and what lies ahead in this new phase of economic recalibration.

Zoom’s accelerated growth slowing down

Zoom, essentially a business communication software, became a lifeline for social communications during long and continuous lockdowns. As a Guardian article noted:

“By March, 200 million people were on [Zoom] each day to work, socialize, view lessons and lectures, sing in choirs, attend church, birthday parties and weddings, meet new babies, say final words to dying family members and observe Ramadan and Easter.” (Kalia, 2020).

Fast forward to 2024, Zoom has over 300 million daily active users who use the video-conferencing app every day, but none of the explosive growth rate of the pandemic years. For perspective, the company reported an annual revenue of $0.62B in 2020, an 88% jump from the previous year, growing to $2.65B in 2021 or a whopping 326% increase, followed by a smaller but still impressive jump to $4.10B in 2022. Revenues in subsequent years are telling, growing marginally to $4.39B and $4.53B in 2023 and 2024, respectively.

As the chart above indicates, a $1,000 investment in Zoom in March 2020 would have reached $5,153 at the peak of the pandemic. Four years later, its value has fallen to $572.

Zoom wasn’t intended to be an everyday online meeting facilitator for people. Despite a surge in demand during the pandemic, the company failed to monetize demand from consumers, many of whom were content with free 40-minute calls. This and the weaker post-pandemic growth have returned Zoom to corporate customers, its original users. Online research suggests that Zoom plans to sell more videoconference licenses and expand its line of collaboration tools to add phones, a Slack-like persistent chat platform, digital whiteboards, customer contact centers, and physical conference room set-ups. The expanded features are available with Zoom One plans for business and personal use.

Peloton facing a bumpy ride

Peloton sells indoor exercise bikes that include a subscription to its streaming workout content, which you can access even without the bikes. For a monthly fee, you can stream unlimited strength, yoga, running, boot camp, and cycling classes, as well as audio-only classes for outdoor runs.

Like Zoom, Peloton was in demand during the lockdown, when gyms and fitness centers shut down, and people had no choice but to take their workouts indoors. In 2020, the company reported that 1.1 million people downloaded its app in six weeks, bumping up shares to a record high.

At the height of the pandemic, the company’s stock surpassed $171 per share, and market capitalization reached about $50 billion. In 2022, the company’s momentum began falling rapidly. It laid off over 5,000 employees, lost four top executives, and saw its share price drop to $29, dipping as low as $6.62. At the time of writing, the stock’s 52-week range was between $3.96 and $12.02. If you have $1,000 worth of Peloton stock, you’d be over $6,000 richer at the peak of the pandemic but left with a little over $200 this February.

With life returning to normalcy, fitness enthusiasts have resumed their gym visits in a reflection of the social phenomenon known as fitness culture, where gym sessions are a tool for connecting with others. Countries lifting lockdowns wasn’t the only thing that worked against Peloton. The company’s logistics buckled under the unexpected demand. As waiting times for equipment began to get longer, Peloton fans took to social media to vent their frustration. To make matters worse, some Peloton customers reported issues with their bikes, with a handful suffering injuries. A recall of 30,000 bikes followed.

It didn’t help that rivals were snapping at the company’s heels, with the likes of iFit Health and Echelon offering similar…

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