The tough new restrictions implemented by the Victorian Government will have a prolonged impact on the national economy and many businesses. As the state attempts to control a second wave of the COVID-19 pandemic over the next 6 weeks, many industries and sectors will suffer under the lockdown.
Despite the pessimistic outlook for general commerce, there are certain sectors and companies on the ASX that could get a boost from Victoria's second lockdown.
Victoria is leading the shift online
A recent article in The Australian has highlighted how online retail shares on the ASX could receive a surprise boost from Victoria's second lockdown. The article cites a report from National Australia Bank Ltd (ASX: NAB) which showed that Victoria was ahead of the curve in adapting to internet shopping.
According to the insight from NAB, Metropolitan Melbourne is the leading online commerce zone in the country while even regional Victoria is ahead of Metropolitan Sydney.
In addition, year-on-year online retail sales in Victoria are nearly 60% higher, compared to the national figure of 50% year-on-year. As a result, the extended lockdown period should see the same shift to online shopping that was experienced earlier this year.
Which ASX shares could benefit?
In my opinion, the 2 standout performers during the pandemic have been Kogan.com Ltd (ASX: KGN) and Temple & Webster Group Ltd (ASX: TPW). Kogan.com has become a household name during the lockdown period, with the company's active user base growing to more than 2 million.
The Kogan share price has reflected the surge in demand, rallying more than 430% since mid-March. Temple & Webster has also reaped the benefits of shoppers switching to online retail avenues. In its most recent trading update, the company highlighted a 130% surge in gross sales to 28 June on a year-on-year basis.
In addition to the popular online retailers, supermarkets and other essential service providers should also receive a boost.
With the new restrictions leading to panic buying and purchase restrictions, supermarkets have been forced to adapt. Woolworths Group Ltd (ASX: WOW) is set to remodel 3 of its existing Melbourne supermarkets to become online delivery hubs in the coming weeks. With many customers opting to bypass supermarkets and move online, meal kit provider Marley Spoon AG (ASX: MMM) is also seeing a boost in demand.
Foolish Takeaway
In my opinion, the coronavirus pandemic has accelerated the inevitable shift to online commerce. As consumers, not only in Victoria, opt for the convenience of online shopping over traditional brick and mortar shops, companies with a solid online presence are poised to boom in 2020 and beyond.
