Almost two-thirds (64%) of small businesses (SMBs) believe the Australian government should intervene to protect local retailers from online sites, a new survey from Sendle reveals.
Sendle’s latest Small Business Survey highlights the impact overseas competition from e-commerce marketplaces such as Temu and Shein is having on SMBs that are finding it difficult to compete on price amid high interest rates and underlying inflation. Almost half (48%) of SMBs said new marketplaces had added price pressures on their businesses.
In addition, more than two in five (43%) SMBs said these marketplaces have increased expectations of free shipping among consumers. This explains why one in two (51%) SMBs plan to offer free shipping to attract customers this peak sales period, a 13% increase from the same period in 2023. Offering sales discounts and promotional offers (45%) and discounted shipping (25%) are other tactics SMBs are using.
“Sendle’s latest survey shows that Australian small businesses are concerned about competition from overseas retailers who can sell a broad range of products at low prices. To attract and keep customers, we have seen a lot of small businesses hunt around for better shipping rates and options to offer free or discounted shipping to customers,” Sendle managing director, Laura Hill said.
Shipping is now a critical strategy to win customers over, with one in four (24%) small businesses saying that online sites have an unfair advantage with cheaper rates. A lack of affordable and efficient shipping options in regional and rural Australia has also impacted their ability to reach potential customers and compete with larger businesses, with 71% of small businesses wanting to see more shipping in regional and rural areas.
To help them grow and compete, 37% of small businesses believe the government should intervene to curb rising shipping costs in Australia, while one in three (33%) want to see more competition among carriers. One in two small businesses also want to see more affordable delivery options for overseas shipping.
“Australia Post has a monopoly in regional and rural areas, which has led to less competition and higher shipping rates for small businesses who have no other options. Limited shipping options make it difficult for small businesses to compete online as customers expect faster and affordable shipping, and eat into their profit margins, making it harder for them to stay ahead in a highly competitive retail industry,” Hill added.
Despite the impact of competition and continued economic uncertainty, SMBs are cautiously optimistic about sales growth. Almost one in three (30%) SMBs are forecasting up to 25% revenue growth this peak season in comparison to the same period last year. Only 18% of SMBs are predicting no revenue growth.
Looking ahead to 2025, over a third (35%) of SMBs plan to expand to new markets to grow their businesses. While just over two in five (42%) of small businesses only operate in Australia, 42% expect up to one-quarter of their total sales growth to come from markets outside of Australia in the next 12 months.