Why this is important to Wisconsin businesses: Australian consumers are comfortable purchasing internationally online, and regard U.S.-based websites as among the safest to purchase from.
Cross-border online shopping is on the rise globally, and Australia is no exception. In the Pitney Bowes Global Online Shopping Study (November 2016), it was revealed that Australians continue to lead the world with regard to the percentage of consumers who make online cross-border purchases, with 86 percent of survey respondents indicating that they had taken part in cross-border online shopping in the past year. This is being driven by value-conscious Australian consumers who are demanding a wider selection of high-quality goods and a seamless transaction, shipping and returns process.
The most recent figures published in the Online Retail Sales Index – In-Depth Report by National Australia Bank (NAB) valued online cross-border retail in Australia at $3.5 billion ($4.75 billion Australian) in the year from September 2016-17. During this period, online cross-border retail accounted for approximately 20.3 percent of total e-commerce sales, with the entire Australian online retail market estimated to be worth $17.3 billion ($23.4 billion Australian).
Based on figures published in the most recent National Australia Bank (NAB) Online Retail Sales Index (March 2018), the four fastest-growing e-commerce product categories for international retailers in the year from March 2017 to March 2018 were:
- department and variety stores (27.3%);
- electronic games and toys (17.6%);
- houseewares (11.1%); and
- fashion (8.7%).
The index revealed that the product categories listed above also capture the largest spending value from Australian consumers making cross-border online purchases.
Encouraging factors for Wisconsin exporters considering an e-commerce strategy aimed at Australian consumers include:
- U.S. e-commerce sites are relatively well trusted by Australians and regarded as the second-safest online shopping option (after Australian e-commerce sites).
- Australian consumers are increasingly participating in international online sales events originating in the U.S., such as Black Friday and Cyber Monday.
However, Wisconsin exporters should also take the following points into consideration when developing a strategy:
- Where to sell: International retailers should consider a broad presence and representation on multiple online channels in order to reach Australian consumers who shop on both online retail stores and marketplaces such as Amazon AU, eBay AU, and Gumtree AU.
- Pricing, packaging and shipping costs are one of the main deterrents to cross-border online shopping.
- Age groups: The 18-24 age group makes online purchases frequently, accounting for 18.1 percent of the total value of cross-border online retail spending in Australia.
- Recent legislation changes: The goods and services tax (GST) on low-value imported goods to Australia was introduced in July 2018, and the potential impact is yet to be seen.
Wisconsin companies interested in breaking into or expanding their presence in Australia’s growing e-commerce market are therefore encouraged to:
- review the fastest-growing and highest-value product categories for cross-border online shopping listed above to identify specific areas of opportunity;
- consider representation on a leading Australian leading e-commerce marketplace or creating a dedicated Australian e-commerce platform with a local website address; and
- engage with Australian associations (e.g., the National Online Retailers Association and the Australian Retailers Association) to receive regular updates on new developments within the Australian retail industry.