Countercyclical businesses find calm (and profit) in the chaos
It’s not new news that Australians are absorbing an extended period of both high inflation and interest rates. The 2022 Annual Consumer Price Index increased 7.8 percent – the biggest jump of its kind since 1990. And, retail sales volumes have fallen for the first time since the September quarter 2021.
For some organisations, the reality of consumers tightening their discretionary spending is a death knell. However, for those, like hipages Group, its a time where their countercyclical nature make for a position of strength and opportunity.
These businesses will rise in an economic downturn or recession. And, if they have been strategising in preparation for tightened economic conditions, they will have the ability to find calm in this chaos and clearly pave their pathway to profitable growth.
When down means up
That doesn’t mean that these businesses haven’t weathered a storm to land this strong position. They’ve likely pivoted, challenged and made big changes over the past 12-24 months. At hipages Group, we haven’t been immune to the local and global strains on the tech industry and we faced additional challenges specific to our core customer- Australian tradies – too. Due to the nature of our work, we’re thankful to have experienced growth in this period.
We are also fortunate to have 19 years of experience in this industry under our belt. This experience led us to expectations that a softening macro environment would bring balance back to the marketplace and drive accelerated growth, due to the countercyclical nature of our model.
Now, as competition for jobs among tradies heats up, our key lead indicators are showing the
marketplace is returning to balance, with registrations at record levels and utilisation and claim value increasing. And, most importantly, we are seeing MRR growth return and subscriber
numbers return to growth in January, which we haven’t seen since 2021.
For hipages Group, down means up.
Now isn’t the time to rest
However, now isn’t the time to get comfortable. Now is the time to turbocharge for the long term and I recommend that all businesses, particularly in the fast-paced technology industry do the same.
Far more important for the long-term success of hipages Group is our evolution of hipages from a marketplace to a SaaS platform provider. We are creating an end-to-end platform to own the tradie ecosystem. Early signs show that this is already delivering benefits for customer retention, with tradies four times stickier when using both hipages and Tradiecore. The growth opportunity from this evolution is huge, with a wide range of diversified revenue streams and significantly increased customer lifetime value.
If there is one learning that I can pass on to others based on my experience of leading a business with a countercyclical design, it is this: celebrate the wins that come hand in hand with these economic conditions but don’t sit still. Don’t take these periods for granted. Continuous evolution and execution – even in times of success – is a key to winning.