Why Australia Isn’t Too Far Away When It Comes To Selling Your e-commerce Goods

04 April, 2019
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Australia has a population of 24,992,400 million people of whom 88% are internet users – 18.2 million will be online shoppers in 2019. Current spend per user is USD 1182.84 on average; Australians have a big purchasing power and a high amount of disposable income. Politically and economically, Australia is a stable and independent nation that offers an abundance of opportunities to e-commerce businesses.

Trends in Australian e-commerce

In 2019, e-commerce revenue in Australia is expected to reach USD 21,546 million, and it looks set to increase by 5.7% annually until 2023. Consumers are keen on personalisation and demand for such services has grown by 28.2%, placing pressure on suppliers to take a more specialised approach.

Australia’s e-commerce customer base is fairly young – 35-44 year old are the key players according to reports – however, strong growth has been demonstrated in the 45-54-year-old demographic. When it comes to making international purchases, it’s the 18-24-year-olds who are currently showing higher tendencies.

The Australian Postal Corporation reported that “buy now, pay later” (BNPL) options are an increasingly popular way for consumers to shop online; in 2017 BNPL accounted for 7.7% of total online goods spend with the payment method appealing mostly to younger consumers.

Fashion, which accounts for 57% of BNPL purchases, is the fastest growing segment of online sales, generating USD 6,656 million in 2018 – it represents 26.5% of purchases. Other profitable segments include consumer electronics, homeware, appliances, personal care and recreation. Online grocery sales are also exceedingly popular.

There’s been a 58% increase in purchases made from a mobile device making it vital for any business entering the Australian e-commerce market to have a website optimised for mobile browsing and payment processing.

Australians like to make the most of bargain and discount events such as Black Friday, Cyber Monday, Boxing Day Sales, and even have their own unique sales event called Click Frenzy. This creates a seasonal upward spike in sales for e-tailers, making effective stock control management a key factor in serving the needs of these bargain-hungry consumers.

Amazon arrived in Australia in 2017 causing a stir in the marketplace platform style of shopping.

Sites that offer variety, efficient delivery and value for money will be able to reap the rewards of this competitive but popular sector.

Are there any risks to setting up your e-commerce in Australia?

Australia is one of the most developed countries in the world; it’s consumers have high expectations when it comes to service and product delivery. As a cross-border trader, you will have to employ sophisticated CRM tools and have the ability to meet your customer’s expectations. This makes start-up costs potentially high as one considers Australia’s geographic position.

Statistically, 30% of Australians showed distrust towards foreign websites and preferred purchasing from domestic vendors, so you’ll have to tread carefully and work hard to earn your piece of the pie in the Australian market.

Depending on the type of products your business sells, you may find yourself up against tough competitors such as Kogan, Woolworths and Booktopia.

Who’s successfully entered the Australian e-commerce market?

Due to its high growth potential and favourable economy, Australia is an enticing destination for many e-commerce giants such as Amazon and Alibaba. Amazon.au entered the market in 2017, previously customers had made use of the American site which allegedly converted one in two of its visitors. Amazon’s launch in Australia has not been without its teething problems; price being the main factor concerning consumers.

Australia is Alibaba’s third largest market. The online platform’s success has taken many local retailers by surprise, innovation and price being its key advantages.

When it comes to entering the Australian market, it’s incredibly important to understand your targeted consumer and tailor your offering to suit their unique requirements. Australians are ready for a better more sophisticated shopping experience that offers value for money and is backed by excellent after-sales support. With many shared cultural and economic ties, it’s not hard to see why the country might be the ideal location for your growing UK e-commerce business.