Want to Make Sales in the Land Down Under?
The 2016 Ecommerce market in Australia represents the second largest online population in the Asia-Pacific Region. It hosts a highly stable economy and proximal location to Japan and China, and as such the market is expected to surpass $24 BILLION by 2018. In fact, Australia is ranked number 10 in Global Ecommerce!
In addition, the Australian consumer is a smart and savvy shopper who has enthusiastically embraced online shopping. As their internet “shopping quotient,” continues to grow, the average “Aussie,” has expanded their electronic capabilities to include real time purchases through their Smartphones. In fact, by the end of 2015, 35% or all ecommerce transactions were completed on mobile devices.
Ecommerce sales are projected to rise by a minimum of 21% by 2018, making Australia a prime market for internet sales expansion. Making this market even more desirable is that approximately 69% of Australian digital buyers make cross-border purchases…..primarily from the U.S., China and the U.K. As expected, fully 87% of Australians utilize credit and debit cards as their primary digital payment method as opposed to online payment “capture” systems such as “POLi” (the Aussie version of PayPal).
Just as the U.S. has Cyber Monday during the Holiday Season, Australia was inspired to launch a similar ecommerce shopping event known as Click Frenzy. This highly anticipated shopping period takes place on the third Tuesday of each November. As a shopping day unique to Australia it has grown into a major revenue producing event, with the shopping day generating just over $200 MILLION in sales and the site receiving over 1.2 Million visitors in 2015. Along with Click Frenzy day, the other main shopping days are Christmas and Boxing Day. Altogether, end-of-year holiday sales in 2015 were record setting, Christmas and Boxing Day sales surpassing $2.5 BILLION!
When one considers the vastness of the continent of Australia, the relatively small population of 24 Million people would tend to diminish the positive aspects of the market as a whole. However, when you consider that fully 89% of that population is urban in nature, with a rather low number of major metropolitan centers, the logistics of selling products in that market becomes very appealing. Australians enjoy a high average household income of approximately $59,000 (USD) and reflect a young 37.6 years of age (average). As 98% of Australians are fluent in English, we find that the three main provisions necessary for successful sales exists in the “Land Down Under,” namely an adequate disposable income needed to buy products, a technologically savvy shopping population based on their average(young) age and the ability to easily communicate in the English language.
One of the top six nations in online retail imports and the leading cross-border spender in the Asia-Pacific markets, Australia offers a tax exemption on foreign purchases under $765.00 (USD). This Low Value Threshold (LVT) exemption allows Australian consumers to import duty-free products when they purchase from foreign retailers. Furthermore, approximately only half of Australia’s retail (brick & mortar) businesses have an online presence, which of course forces digital consumers to shop abroad. This cross-border trend is driven by younger adult shoppers, with those in the 18-39 age range making up 54% of cross-border purchases.
According to the National Bank of Australia, online retail spending in Australia increased by 10% to over $17.6 BILLION in 2015. Comparatively speaking, this compares roughly to $562 BILLION in China, the country with the highest ecommerce sales and to $350 BILLION for the US. While the Australian number may appear small, it is important to remember that Australia’s population is only 2% the size of China’s! That being said, Australia has a higher internet penetration and Smartphone usage rate; with more than 90% of the population enjoying internet access. Underscoring the ecommerce opportunity in Australia, research studies show that approximately 30% of consumers spend more time shopping online than in a physical store……and that number is projected to rise to 40% by 2018.
What the Aussie Ecommerce Consumer Demands!
There are several qualifiers that Australian digital consumers look for when they are shopping on line. These qualifiers or requirements are becoming the informal standards that these consumers expect to find on the websites they choose to buy from. If you can incorporate these concepts into your website design, you should find more visitors frequenting your online inventories.
- Minimal Additional Sales Intrusions. Australian digital consumers do not appreciate being force-fed additional products for their consideration at the check-out. They are linear shoppers and as such like to make their purchase with minimal additional “hassles.”
- Clean, Simple Product Descriptions. The average Aussie consumer likes direct, no-nonsense product descriptions and purchase instructions. As copy and text writers have continued to develop more grandiose vocabularies, it has become apparent that Australian shoppers do not find such efforts appealing.
- Video is Appreciated. Digital shoppers in Australia do appreciate video and audio demonstrations of products, especially technical ones in nature. They should not be longer than 90 seconds if possible, but, detailed and well produced are essential.
- Multiple Shipping Options. It will pay to develop multiple shipping options for your customers in Australia. While most will not require expedited shipping options, all will look for products with the most cost effective shipping available.
- In-Country Fulfillment. If you are looking for the single biggest advantage for selling your products in Australia, the best thing you can do is develop a relationship with a reputable fulfillment center in Australia. Let the orders be processed in the US, but let them ship from your warehouse in-country. While this may not be necessary to “kick-start” your ecommerce business in Aussie Land, it is worth considering if you want to take your business to the next level.
Australia is considered by many to be an oyster ready to divulge it’s pearl to online sellers. With a population of easy going people who are smart, easy to communicate with, technologically savvy and financially capable to make online purchases, it should be expected that if you do not expand your digital sales on this continent……your competitors are sure to do so!