May 05 2020
Amid unprecedented disruptions to the economy, sales teams need to think carefully about which industries they should be targeting in their call efforts. IBISWorld examines five markets that could present rare sales opportunities while the broader economy is under COVID-19 quarantine restrictions.
Gold Ore Mining
Unlike most other industries, revenue in the Gold Ore Mining industry is expected to grow in 2019-20, as the price of gold increases. Gold is a counter-cyclical asset, offering a safe haven for investors that don’t wish to store their wealth in financial assets during periods of economic uncertainty. The price of gold has risen significantly as the COVID-19 pandemic has worsened, supporting a dramatic rise in revenue and profit margins for Australian gold miners. The depreciation of the Australian dollar has also significantly assisted gold miners, as gold is typically priced in US Dollars. Revenue in the industry is expected to grow by 4.7% in 2019-20, to $19.1 billion. This growth in revenue is expected to lead to an increase in capital expenditure by gold miners, providing a potential sales opportunity for mining equipment wholesalers.
The Pharmacies industry is expected to benefit from greater consumer demand for paracetamol, cold medications and prescription medicines following a rise in health consciousness. Demand for flu vaccinations is also expected to support industry revenue. Revenue is expected to rise by 3.8% in 2019-20, to $19.9 billion. Recent regulation changes have enabled pharmacies to offer home delivery services of eligible medicines for vulnerable community members, creating a new revenue channel for some industry firms. Now is a critical time for sales teams to establish and develop support relationships with pharmacies, particularly given the ongoing negotiations of the seventh Community Pharmacy Agreement (7CPA), which is expected to commence in June 2020 as the sixth agreement ends. These negotiations include examining the appropriate scheme of remuneration for dispensing medicines. Other issues likely to be raised in the 7CPA negotiations include discount changes, collaborative prescribing and full-scope pharmacy services.
Online Grocery Sales
Demand for services from the Online Grocery Sales industry has surged during the COVID-19 pandemic, with many consumers using online grocery channels for the first time. Revenue in the industry is expected to increase by 56.0% in 2019-20, to $5.8 billion. This result represents an increase over the annualised growth rate of 29.7% over the past five years. Although both Coles and Woolworths temporarily suspended online grocery channels in April 2020, both major players have their resumed online shopping operations with additional capacity to cope with a surge in orders. Upstream equipment suppliers and logistics firms currently have an opportunity to collaborate with grocery providers to improve the efficiency and capacity of online grocery shopping.
The Aquaculture industry is expected to be relatively unaffected by the COVID-19 pandemic. The industry has a low reliance on supply chains that have been disrupted by COVID-19, allowing normal business operations to continue. Government enforced social distancing measures have also minimally disrupted operations for aquaculture firms. Unlike the Fishing industry, exports account for less than 10% of revenue in the Aquaculture industry. This trend reduces the industry’s exposure to demand shocks from Asian markets, which has limited demand fluctuations during the COVID-19 pandemic. Industry revenue is expected to increase by 1.3% in 2019-20, to $1.9 billion.
Fossil Fuel Electricity Generation
The COVID-19 pandemic is expected to have a mixed impact on the Fossil Fuel Electricity Generation industry. A downturn in economic activity is anticipated to lead to a decline in net energy consumption, reducing electricity prices and exerting downward pressure on revenue for electricity generators. However, fossil fuel-based power plant operators are expected to be supported by a decline in the prices of oil, natural gas and black coal. These trends are expected to exert downward pressure on purchase costs, subsequently preserving profit margins for these firms. In contrast, competitors in the Wind and Other Electricity Generation industry and Solar Electricity Generation industry are expected to be hindered by lower electricity prices. While electricity generated from renewable sources does not require fuel costs, the costs of construction can be significant. The decline in the electricity service price is expected to reduce returns on investment for renewable electricity projects, and likely cause any new construction projects of renewable generation infrastructure to be postponed. This outcome is expected to alleviate competitive pressure on fossil fuel electricity generators.
IBISWorld reports used to develop this release:
- Gold Ore Mining
- Online Grocery Sales
- Fossil Fuel Electricity Generation
- Wind and Other Electricity Generation
- Solar Electricity Generation
For more information, to obtain industry reports or to arrange an interview with an analyst, please contact:
Strategic Media Advisor – IBISWorld Pty Ltd
Tel: 03 9906 3647