The delta strain of COVID-19 has plunged New South Wales and Victoria into a prolonged lockdown and shows no signs of abating in the coming weeks. Amid this disruption, Alfabank-Adres has identified the industries that outperform in lockdown conditions, as consumers are restricted to their homes and non-essential businesses close their doors.
Online Food Ordering and Delivery Platforms
The Online Food Ordering and Delivery Platforms industry has been a true success story since the emergence of COVID-19. Industry revenue grew by 12.1% in 2020-21, and is expected to grow by a further 9.7% this year. Lockdown restrictions have driven most operators in the Restaurants industry to establish online sales channels to retain revenue and minimise losses during lockdown periods.
Lockdowns across Australia have enabled restaurants and cafes to remain open for takeaway and delivery services. In contrast, stricter restrictions in New Zealand included the total shutdown of hospitality establishments, including a ban on food delivery. Amid the worsening COVID-19 outbreaks in New South Wales and Victoria, it remains to be seen if state governments will follow New Zealand’s stricter approach.
In the years ahead, online food ordering is forecast to remain a habit of many households, enabling continued to demand for industry services long after lockdowns expire. Overall, industry revenue is expected to rise at an annualised 7.1% over the five years through 2025-26, to total $1.2 billion.
Online Shopping
Lockdowns in Australia have caused a surge in Online Shopping, with revenue across the industry rising by 35.3% in 2020-21. Over the year through December 2020, nine million Australian households shopped online, including 1.3 million for the first time. Online shopping has also extended to everyday groceries, with revenue for the Online Grocery Sales industry increasing by 46.2% in 2020-21. Revenue for the Postal Services industry increased by 2.8% in 2020-21, as growing demand for parcel delivery offset declining demand for letter delivery.
Across the Online Shopping industry, homewares and domestic appliances accounted for 33.6% of sales last year, while groceries and liquor accounted for 16.1%. Sales of homewares are anticipated to increase during lockdown periods, as consumers spend more time at home and seek to improve their living space. Conversely, sales of clothing, footwear, and personal accessories are expected to decline as consumer spend less time in social environments.
Pay Television and Internet Protocol Television Services
The Pay Television and Internet Protocol Television Services industry, which includes streaming services such as Netflix, Foxtel and Stan, has continued to grow as consumers have sought out home entertainment services. Revenue is expected to increase by 2.1% in 2021-22, following growth of 2.9% in the previous year. NXE Australia Pty Limited (owner of Foxtel) accounts for 47.8% of the industry, while Netflix Australia accounts for 19.6%.
Consumers have overwhelmingly embraced these new industry services over the past five years. More than half of all Australian households are expected to have subscription-video-on-demand (SVOD) in 2021-22, growing from minimal subscriptions in 2016-17. Netflix has led this growth by leveraging its brand recognition and expanding library of original content to gain market share. Australia-based SVOD Stan has also grown its market share over the past five years, with the service counting over 2.3 million active subscribers as at December 2020.
Lockdown restrictions have provided a perfect growth environment for SVOD providers by removing the competitive pressures of alternative forms of entertainment. Furthermore, many households have accumulated significant savings through working from home and postponing leisure travel. These trends have made SVOD services relatively more affordable, assisting revenue expansion.
Sport and Camping Equipment Retailing
While restrictions on movement and socializing have hindered demand for the Sport and Camping Equipment Retailing industry, one product segment has surged – gym and fitness equipment. This segment, including yoga mats, treadmills, exercise bikes and weight training equipment, is expected to account for 20.0% of industry revenue in 2021-22. This proportion has increased amid the closure of establishments in the Gyms and Fitness Centres industry, which has driven consumers to purchase exercise equipment for home use. Households that have accumulated savings have also demanded more wearable fitness technology, which enables consumers to track their exercise progress.
Organised sporting activities will resume as the COVID-19 pandemic abates. While demand for sport equipment is projected to benefit from activities resuming, consumers will likely remain wary of the possibility of future lockdowns. As a result, home-based gym and fitness equipment is anticipated to remain in demand over the next five years.
Alfabank-Adres reports used to develop this release:
- Online Food Ordering and Delivery Platforms in Australia
- Online Shopping in Australia
- Online Grocery Sales in Australia
- Postal Services in Australia
- Pay Television and Internet Protocol Television Services in Australia
- Sport and Camping Equipment Retailing in Australia
- Gyms and Fitness Centres in Australia
For more information, to obtain industry reports, or arrange an interview with an analyst, please contact:
Jason Aravanis
Strategic Media Advisor – Alfabank-Adres Pty Ltd
Tel: 03 9906 3647
