6 ASX stocks facing competitive threats and whether they can prevail

In this article, we’re looking at ASX stocks facing competitive threats – not just standard market competition, but major threats from competitors. And by major threats, we mean these companies do not have the upper hand at the moment. We aren’t saying any of these companies are at risk of ‘going out of business’. But these companies risk losing market share and/or new market opportunities (if they have not already).

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6 ASX stocks facing competitive threats and whether they can prevail

Seek (ASX:SEK)

Seek faces an increasing number of competitors including CareerOne, LiveHire and Indeed. But we’d like to focus on one: EmploymentHero. EmploymentHero, initially an API partner providing job posting capabilities, has evolved into a direct competitor with its “Swag” product, offering job listings and AI-powered matching…for a lower cost. Seek eventually got a gutful and alleged Employment Hero misused candidate data and undermined trust, prompting it to terminate the API integration in mid-2025.

Employment Hero consequently took Seek to Federal Court, accusing Seek of anti-competitive behaviour. In July, an interim offer was issued whereby Seek could not terminate or ‘deliberatly disrupt or degrade’ Employment Hero’s access to the platform until a full trial or further court orders are issued. It could take some months for an outcome to happen here but there is clearly animosity.

Court documents which the AFR came into possession of include allegations that EmploymentHero sent emails to candidates after applying on Seek, suggesting they sign up to Swag so the hiring manager could contact them directly…and when they did, this was at least partially pre-populated with information obtained by Seek. While a response has either not yet been put together or seen by the AFR, a spokesperson was quoted as saying Seek’s tearing up of its contract for API access was a breach of competition and that it had always engaged in good faith.

Xero (ASX:XRO)

Xero claims to have a $100bn TAM for its various business software pieces. The trouble is that a lot of this is in the USA and Intuit is the established company there. Intuit (through QuickBooks) is operating in America at massive scale with deep brand recognition, high switching costs, and strong network effects—making it very difficult for challengers to make meaningful inroad.

Its subscriber growth outpaces Xero’s, and it’s able to invest heavily in brand and distribution. In one comparison, Intuit spent around US$3.8bn on marketing (about 26% of revenue), while Xero spent US$472m (around 31% of revenue). Moreover, Intuit benefits from a broad partner network—accountants, integrations, ProAdvisor ecosystem—further reinforcing customer lock-in and utility. Xero is attempting to fight, spending US$4bn to buy Melio. The deal brings in 80,000 Melio users and positions Xero to offer integrated accounting plus payments—narrowing Intuit’s product advantage. But there’s a long way to go.

Virgin Australia (ASX:VAH)

Yes this is obvious – Qantas and Virgin are competitors. But what many investors may not realise is that the rivalry is ramping up in a big way in 2025, and it could be as big as the 2011-capacity war. Qantas is putting significant capacity onto the market and is renewing its domestic fleet with A220s and A321s. Only last week, the Red Roo announced some of its A321s, destined for transcontinental routes, would have lie-flat seats which is something Virgin does not offer.

ASX (ASX:ASX)

Yes, the ASX has been a shambles for a number of years now for reasons we’ve covered elsewhere. The reason why it arguably hasn’t managed itself as well (and why it has avoided scruitany) is because of a lack of competition…or perhaps legitimate competition. There is the NSX as the most direct competitor, but it hasn’t been much of a threat due to a lack of liquidity in the market – the AIM it ain’t.

But…in May 2025,  Canadian Securities Exchange announced it would be buying the NSX. Work is still happening behind the scenes but investors have been promised a better technological stack, and the tie-up would give the NSX liquidity and credibility. We’d agree, but the jury is out on the extent to which it would happen. Enough for the NSX to be a force in the way the AIM or TSX is? Maybe, but it could take a while. If this happens, then the ASX will face legitimate competition.

Woolworths (ASX:WOW)

Woolworths is still Australia’s largest grocery chain, but it has lagged Coles as of late. By lagged, we mean its sales and bottom line have stagnated while Coles has grown both. Woolworths has openly admitted it has had issues. Woolworths is working to rebuild customer “price trust” after previous pricing strategies led to consumer skepticism. Initiatives like cutting prices on 500 items and launching themed promotions have not yet yielded strong results, as shoppers increasingly shift to Coles. Moreover, the capex it is spending on new fulfillment centres is impacting its bottom line to a greater extent than Coles.

Guzman y Gomez (ASX:GYG)

Guzman y Gomez may be the only Mexican chain listed on the ASX, but not the only one avaliable to consumers. While GYG has just over 200 locations, Zambrero has nearly 300 locations. The brand has secured significant investment, including a $250 million equity financing deal with Metric Capital Partners, and it too has global ambitions to reach 1,000 outlets.

Fast food is intensely competitive and low-margin. But one area Zambrero could stand out is its focus on social impact and community engagement. One example is its “Plate 4 Plate” initiative, donating a meal to someone in need for every regular or big burrito or bowl purchased. This social impact model has contributed to the brand’s appeal, particularly among younger consumers.

We’ll be watching the competitive race between these two companies with interest more than any other ‘duel’ we’ve outlined on this list.