Online food ordering and delivery
Online food ordering and delivery is a relatively young market that, after a period of heavy investment, is now quickly consolidating. One of the main drivers of this move has been the low profitability of many players, as penetration still tends to be relatively low and traditional phone ordering often remains the number one competitor.
But in regions where concentration is high and penetration has been increasing, companies are now seeing their profits rising rapidly. This in turn should lead to further concentration and to the emergence of a small number of dominant players able to generate profits while their competitors probably keep struggling. Figure 1 shows the main players in different online food delivery markets.
Figure 1: Main players in different online food delivery markets
Source: Frost & Sullivan, Robeco
Winners will be those able to keep their delivery costs as low as possible, either because, in the country they operate, the cost of labour is low or because the density of their customer network is very high. In countries where the population is highly concentrated in big cities, like South Korea for example, online food delivery companies will obviously be at an advantage.
According to Neele and Speetjens, the sector will keep growing and consolidating rapidly over the next couple of years. Online food delivery penetration on average is around 10% to 12%, whereas in more developed markets, like the UK and the Netherlands, this can be as high as 25%. Therefore, potential growth remains substantial in many markets.
Last year saw a major consolidation moves in large food delivery markets, such as Germany, the UK and South Korea. These mergers gave birth to dominant food delivery companies able to generate high and robust profit margins.
The online food delivery sector will keep growing and consolidating rapidly over the next couple of years.
Humanization of pets
The number of pet-owning households is rising globally while the amount of money people spend on their furry companions is also increasing. In the US, for instance, over 55% of the households own a pet, according to the American Veterinary Medical Association’s latest survey. Moreover, pet industry sales have been steadily rising over the years, even during the crisis of 2008-2009, as Figure 2 shows.
Figure 2: Total US pet industry expenditures (in USD billions)
Source: American Pet Products Association, Robeco
To some extent, the constant increase in global consumer spending in the household and pet care categories can be attributed to a ‘pet-humanization’ trend. Consumers increasingly see their pets as family members. Many consumers are therefore prepared to spend more on pet food and other pet-related products that may improve animals’ living conditions.
One way to benefit from this trend is to invest in either pet food providers, or companies that supply vaccines and medicine for pets. These food and pharmaceutical companies may not necessarily focus solely on pets, but in some cases, the pet segment can represent a very sizable share of their sales and profits. These also tend to be high-growth and high-margin businesses.
But there are also many other types of companies that could benefit from this trend, Neele and Speetjens say. For instance, online pet food delivery companies may be one example. As pet food is large and bulky, the online distribution model is very suitable for pet food. The online pet food and pet supplies market currently has approximately 15% penetration in the US, but this could easily increase to more than 25% in the next few years.
Streaming wars is not a new topic, but the past few months have been marked by several initiatives that could reshuffle the deck. While Netflix has long been the dominant player, Apple and Disney are now also offering their own service. For these companies, the idea is to establish a direct link with the end consumer to help them decide on future investments in terms of content.
Figure 3: Streaming wars
Of course, the increased level of competition may limit pricing power in the short term. But the market should be big enough for Disney and Netflix to co-exist, say Neele and Speetjens. Moreover, a more diversified streaming offering will probably lead a growing number of customers to replace their usual TV subscription with a combination of online streaming subscriptions.
A more diversified streaming offering will probably lead a growing number of customers to replace their usual TV subscription with a combination of online streaming subscriptions.
Also related to the streaming wars are all the changes happening in the music industry. After two decades of decline, growth has finally come back over the past couple of years, in particular thanks to the success of a handful of streaming platforms. These days, streaming represents about 45% to 50% of the total music industry in terms of revenues. Owning streaming platforms or music labels is one way of benefiting from this comeback. But there are other ways. For instance, because the business model of artists has radically changed and streaming is now seen as a way to promote concerts, companies operating concert venues or selling concert tickets online may also represent attractive investment opportunities.
本文由荷宝海外投资基金管理(上海)有限公司(“荷宝上海”)编制, 本文内容仅供参考, 并不构成荷宝上海对任何人的购买或出售任何产品的建议、专业意见、要约、招揽或邀请。本文不应被视为对购买或出售任何投资产品的推荐或采用任何投资策略的建议。本文中的任何内容不得被视为有关法律、税务或投资方面的咨询, 也不表示任何投资或策略适合您的个人情况, 或以其他方式构成对您个人的推荐。 本文中所包含的信息和/或分析系根据荷宝上海所认为的可信渠道而获得的信息准备而成。荷宝上海不就其准确性、正确性、实用性或完整性作出任何陈述, 也不对因使用本文中的信息和/或分析而造成的损失承担任何责任。荷宝上海或其他任何关联机构及其董事、高级管理人员、员工均不对任何人因其依据本文所含信息而造成的任何直接或间接的损失或损害或任何其他后果承担责任或义务。 本文包含一些有关于未来业务、目标、管理纪律或其他方面的前瞻性陈述与预测, 这些陈述含有假设、风险和不确定性, 且是建立在截止到本文编写之日已有的信息之上。基于此, 我们不能保证这些前瞻性情况都会发生, 实际情况可能会与本文中的陈述具有一定的差别。我们不能保证本文中的统计信息在任何特定条件下都是准确、适当和完整的, 亦不能保证这些统计信息以及据以得出这些信息的假设能够反映荷宝上海可能遇到的市场条件或未来表现。本文中的信息是基于当前的市场情况, 这很有可能因随后的市场事件或其他原因而发生变化, 本文内容可能因此未反映最新情况,荷宝上海不负责更新本文, 或对本文中不准确或遗漏之信息进行纠正。