Coffee shops, restaurants, hair salons, holiday homes and caravan parks will be among the hardest-hit businesses if Google makes good on its threat to pull its Search function from Australia.
These small- and medium-sized businesses rely heavily on its digital presence and the business’ ability to be found through web search, meaning Google Search’s withdrawal from Australia could be “devastating,” according to new analysis from IBISWorld.
The move would be salt in the wound for a hospitality industry already struggling to get back on its feet after COVID-19.
“Google’s exit would disrupt numerous Australian industries, which are already in a weakened state due to the COVID-19 pandemic,” IBISWorld senior industry analyst Liam Harrison said.
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He said Google products like Search and Maps are crucial ways businesses connect with customers, and that Google’s withdrawal could impact business efforts to rebuild their customer bases.
Harrison described lack of visibility on Google as “economic death” for some small businesses.
“Google Search is often a key way to attract customers outside the immediate local area and can represent one of the strongest avenues for growth,” Harrison said.
The Australian restaurant industry, which brings in $18.5 billion in revenue, is forecast to fall by 15 per cent in the 2019-20 financial year. It’s expected to recover by just 5.1 per cent in 2020-21, and over the next five years it is forecast to grow at a rate of 2.1 per cent.
Meanwhile, revenue from the cafes and coffee shop sector dipped 14.8 per cent in 2019-20 and is expected to rise 6.3 per cent in 2020-21.
“Restaurants may also find themselves at the mercy of online ordering platforms such as Uber Eats and Menulog in the event of a Google exit. These businesses may struggle to act independently of these platforms, further exacerbating the power imbalance between online delivery platforms and restaurants.”
Google exit would suppress domestic tourism, beauty services
Tourism operators and beauty services would also be hit hard by a Google exit. The two industries were already constrained by lockdown restrictions during the peak of the pandemic in 2020.
The ban on beauty services like hairdressing, make-up, nail care, skin-care and tanning services sent revenue in this $6.6 billion industry nosediving by around 14.4 per cent in 2019-20.
Caravan parks and holiday homes would also cop a significant hit, with revenue expected to plummet 25.3 per cent in 2020-21. This comes off the back of a significant 19.6 per cent drop in 2019-20.
“The industry's weak performance is primarily due to the COVID-19 pandemic,” according to an IBISWorld report on the sector.
“The pandemic has heavily restricted inbound travel since March 2020, and has constrained domestic tourism.”
Though Bing has been floated as the alternative to Google Search, many businesses have already optimised their ads to Google specifically.
Search engine optimisers in the web design services industry might profit from Google’s exit, but repositioning advertisements would come at an additional operational cost for business owners.
“A mass shift towards Bing would take time and resources that businesses would be hesitant to invest without long-term assurances that Google’s exit from the market would be permanent,” an IBISWorld statement said.