8 Hot Industries for Start-Ups in 2013
The business of online shoe sales might seem a bit random, but consider the success of Zappos, for instance.
In fact Amazon's (AMZN) online shoe retailer fits perfectly into the IBISWorld report's thesis.
"Fragmented industries with a low level of capital intensity often present excellent opportunities for startups," analysts Kevin Boyland and Eben Jose write in the February report. "During the past decade, the key trend creating the majority of these opportunities has been the shift toward providing services online."
Start-up prospects are most prevalent in the retail and service industries, with e-commerce presenting the biggest opportunity, particularly with the likes of Amazon, eBay (EBAY) and Etsy or platforms like Shopify taking away the challenges presented by technology for entrepreneurs.
Nowadays, a small online business can sell its wares through one of these portals, which eliminates the hassle, time and resources needed to create an online store.
"All of these factors have made starting an online business easier than ever," the report says.
To be competitive, though, start-ups will have to "keep pace with the high level of technological change that has transformed their respective industries. Additionally, access to capital via investments or loans will play a critical role in determining the speed at which firms can grow the scale and scope of their operations," the analysts caution.
Given their low barriers to entry, high level of technological change and strong revenue growth expectations, there are eight industries that present prime opportunities for startups in 2013, according to IBISWorld.
1. Social Gaming
The social gaming industry has exploded at an average annual rate of 184% during the past five years, driven by surging Internet traffic and the widespread prominence of social networks, particularly Facebook (FB) , the analysts write.
As mobile devices proliferate, consumers have increasingly been able to access their social networks anywhere, at any time.
Revenue is expected to grow 31.9% to $6 billion in 2013.
"Rising demand for social network-based games creates opportunities for potential industry entrants. Additionally, widely available industry associations like the Entertainment Software Association can help new entrants by providing market research to develop more highly in-demand products," the report notes.
2. Online Shoe Sales
Online shoe sales have benefited from consumers flocking to the Web to purchase goods and services online. Shoe sales online alone are expected to grow at a "robust" 16.2% five-year annualized rate to $8.9 billion through 2013. The report cites a survey by Nielsen indicating that clothing, accessories and shoes are the second-largest category of items behind books that consumers purchase online.