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From 2018 to 2019 before the COVID-19 pandemic, the entire mask demand was very steady. While once the pandemic occurred in 2020, the demand for masks was boomed(Statista, 2020): While according to Jungle Scout, during the first 30 days of the pandemic, the keyword for masks raised by 13,733% up, and the price raised by 47% (Jungle Scout, 2021). According to Statista, the Weekend by April 12th, 2020, only 39% of Americans wore masks. And by the week ended by May 31st, the percentage increased to 66% (Statista, 2020). The rise in awareness makes the mask market remain large.
Mask Industry in the US 2019-2020
Noguchi, Y., 2021. NPR Cookie Consent and Choices. [online] Npr.org. Available at: <https://www.npr.org/sections/health- shots/2021/01/27/960336778/why-n95-masks-are-still-in-short-supply-in-the-u-s?t=1635086809198> [Accessed 22 October 2021]. U.S. Department of Defense. 2020. Domestic Mask Production Expected to Exceed 1 Billion. [online] Available at: <https://www.defense.gov/News/News-Stories/Article/Article/2215532/domestic-mask-production-expected-to-exceed-1-billion/> [Accessed 25 October 2021]. E., M., 2021. 3M's Safety and Industrial segment net sales from FY 2014 to FY 2020. [online] Statista. Available at: <https://www.statista.com/statistics/745403/3m-safety-and-graphics-segment-revenue/> [Accessed 27 October 2021]. Statista. 2021. N95 mask production in the U.S. January 2020 vs. end of 2020 | Statista. [online] Available at: <https://www.statista.com/statistics/1135072/us-n95-mask-production/> [Accessed 25 October 2021]. Brow, D., 2021. [online] Eu.usatoday.com. Available at: <https://eu.usatoday.com/story/money/2020/02/26/coronavirus-prices-masks-amazon- surging/4878653002/> [Accessed 27 October 2021]. GVR, 2020. [online] U.S. Disposable Face Mask Market Size, Share & Trends Analysis Report By Product (Protective, Dust, Non-woven), By Application (Industrial, Personal), By Distribution Channel, By States, And Segment Forecasts, 2020 - 2027. Available at: <https://www.grandviewresearch.com/industry-analysis/us-disposable-face-mask-market> [Accessed 27 October 2021]. 3M News Center. 2021. Full-Year 2019 Results. [online] Available at: <https://news.3m.com/2020-01-28-3M-Reports-Fourth-Quarter-and-Full- Year-2019-Results-Implements-New-Global-Operating-Model-and-Streamlined-Structure-Provides-Full-Year-2020-Guidance> [Accessed 27 October 2021]. MarketWatch, 2021. U.S. Disposable Face Mask Market Size,Growth, Share Global Trend, Industry News, Industry Demand, Business Top Key Players Update, Business Statistics and Research Methodology by Forecast to 2030. [online] MarketWatch. Available at: <https://www.marketwatch.com/press-release/us-disposable-face-mask-market-sizegrowth-share-global-trend- industry-news-industry-demand-business-top-key-players-update-business-statistics-and-research-methodology-by-forecast-to-2030-2021- 10-07> [Accessed 27 October 2021]. Felix, R., 2020. Infographic: Masking Up in Fight Against COVID-19. [online] Statista Infographics. Available at: <https://www.statista.com/chart/21855/prevalence-of-protective-masks-amid-the-coronavirus-pandemic/.> [Accessed 26 October 2021]. 11. Dave, H., 2020. The Coronavirus on Amazon: 44M Medical Masks & 20K Hazmat Suits Sold, Plus Counterfeit Products & More. [online] junglescout. Available at: <https://www.junglescout.com/blog/coronavirus/> [Accessed 26 October 2021]. 12. Grandviewresearch.com. 2020. U.S. Disposable Face Mask Market | Industry Report, 2020-2027. [online] Available at: <https://www.grandviewresearch.com/industry-analysis/us-disposable-face-mask-market> [Accessed 26 October 2021].
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References
Positive Shift in Demand and Mask Market
ALI Almasoudi 738898 TRACY Qiu 739774 SCARLETT Zhang 739784 BARRY Zhu 739859 MIKE Guo 739954 JESSIE Wang 739314
Positive Shift in Supply
Supply Growth is Still Insufficient: Despite the fact that mask supply is still increasing, demand will continue to outstrip supply by the end of 2020 due to restricted production capacity.
Many people in the United States will continue to struggle to find disposable masks, especially N95 in January 2021, due to retailer shortages. "N95 masks should not be worn by the general public since they should be reserved for health care workers," according to the CENTERS for Disease Control and Prevention website (Noguchi, Y., 2021).
3M Company, formerly known as the Minnesota Mining and Manufacturing Company, is a U.S.-based multinational company that produces some 55,000 products, ranging from adhesives to electronic materials. In the fiscal year of 2020, 3M generated over 11.7 billion U.S. dollars of revenue through its Safety and Industrial segment(E., 2021).
Increase in demand The shortage caused the price of masks to soar for a while, making them hugely profitable Financial support from the government
Factors for the positive shift:
Supply Growing Rapidly: Since the beginning of the pandemic, the U.S. Department of Defense has made continuous investments to help domestic mask manufacturers expand production, with one member of the House of Representatives saying that in January 2020, U.S. mask production exceeded 800 million, an increase of 450 million over the usual period. Starting in 2021, domestic production is estimated to reach more than 1 billion masks a year (U.S. Department of Defense. 2020).
After 2020, the mask demand in the US had a negative shift: Since the pandemic continues, the future perdition of the mask market will continue to stay high, except the mask’s market size will experience a mild negative shift afterward, possibly because people started to purchase based on their needs instead of stocking up the extras. Since the purpose of wearing face masks has been shifted from medical use to a standard public setting, the demand will still stay high.
The positive factor is depends on the infection of COVID-19 and the negative factor is depends on the percentage of the vaccines population.
(Created by the author according to U.S. Department of Defense. 2020)
Equilibrium occurs when Price = Quantity.
The demand curve and supply curve of the mask industry in US both shift to left.
By comparing the demand and supply in the mask market of 2019 and 2020, equilibrium price and quantity have risen, and the increasing proportion in quantity is much more significant than price (GVR, 2020).
Through the information above, the equilibrium quantity increase from 280 million USD to 900 million USD (MarketWatch, 2021).
Equilibrium of the Market
In the whole mask industry, the relationship between demand and supply was very stable before the pandemic. Overall, it was very elastic.
However, the happening of the pandemic made it have a big shortage of the masks in 2020. The price of a pack of disposable masks increased from $125 to $220. (Brow, 2021)
The stress of the pandemic and the government policy made people have to use masks in the certain occasions. Therefore, the needs of the masks must be satisfied with the high price. The price of the masks had no obvious effect in the demand of masks. The elasticity of the masks became inelastic in the economic aspect.
(Statista. 2021.)
Elasticity in the Market
Due to the pandemic 3M benefits from it by increasing its production to cover the shortage in the Mask industry which resulted in to increase in its sales by 253 million USD compared to 2019 sales (Full-Year 2019 Results, 2021).
According to Google Trends, interest in 3M face masks has increased 33 times. However, the increasing demand for face masks caused an increase in interest in 3M stock. Searches for "3M share price" had increased by 2.5 times by the end of January and early February 2020
Since the beginning of the Coronavirus crisis, the company's stock price has remained unchanged. Instead, from its 2020 high to February 2, it fell 14.43 percent.
Earnings per share were $1.95, which was less than the $2.10 expected by experts. when the company stated that discharges from its Decatur facility. As a result, towards the end of 2019, the company had received a federal grand jury subpoena.
How Supply & Demand Shift Affect 3M Revenue?
Drawn by author based on data from GVR 2020
(U.S. Disposable Face Mask Market | Industry Report, 2020-2027)
(Felix, R., 2020.)
Like the graph showed above, the quantity of demand does not decide the price of the masks under the limited supply.