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Why Australia is the next ecommerce hotspot to watch

 

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With online business booming across Asia-Pacific, Australia stands out as an ecommerce hotspot. Not only is the land down under leading in terms of internet use, mobile adoption and mobile purchasing, it is also a strong and mature ecommerce market that boasts extremely good links to some of the world’s fastest growing markets. This year, Australia is predicted to make the world’s top 10 countries for online sales volume.

When it comes to retail ecommerce, Australia punches above its weight thanks to its sound financial, logistics and telecom infrastructure. Last year, ecommerce sales grew by around nine per cent, according to a report by management consulting firm, AT Kearney.

In 2016, Australia took the tenth spot in ecommerce global sales rankings with €15 billion (approx. AU$22.59 billion) worth of online purchases. By 2020, some 13 million Australians (of which 66 per cent are aged 15 years and above, according to Euromonitor) will be shopping online.

Australians also have a penchant for overseas goods. According to an August 2016 survey by global technology company Pitney Bowes Australian shoppers are the second-most likely in the world to buy online from overseas merchants, and if this trend continues, it will accelerate the country’s cross-border ecommerce by an average rate of 29 per cent per year until 2020.

Young Australians love to shop cross-border

These online shoppers are also young. A 2016 survey by the National Australia Bank revealed younger buyers under 35 accounted for 40.2 per cent of cross-border purchases and the 18 to 34 age group shows marked increment year on year.

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To meet this demand, delivery companies have had to up their fulfilment game to allow Australians easy access to more international brands online.

Whether it’s expanding into new channels, offering more delivery options, or simply increasing inventory and warehouse capacity, global brands need fulfilment solutions that can adapt to their needs. Improved fulfilment means brands and retailers can store their inventory in closer proximity to their customers in Australia so that last mile delivery can be made more quickly and cost-effectively.

Exporting is easier than ever

The e-tailer landscape is a diverse one in Australia, almost equally populated by both established and domestic SME players. And with ecommerce breaking down the barriers for anyone wanting a share of the international trade pie, it is making it ever easier for home-grown businesses to look beyond their homeland and reach a global audience—and at the moment, the weaker Aussie dollar is proving to add to that advantage. With these healthy tailwinds, it is no wonder cross-border e-commerce growth is expected to climb to US$1 trillion by 2020[2].

However, for the e-tailing industry to soar, it needs to get out of the silo mindset. In order to reach unchartered territories, e-tailers will require a solid logistics network behind them. Versatile shipment options, including reliable end-to-end service, full tracking visibility, meeting customs clearance requirements, and online confirmation or returns, are just some of the solutions customers now expect as a ‘given’.

Shipments are off the dial

Desirable products and first-class delivery solutions work hand-in-hand in helping Australian SMEs gain strong market share overseas, and package shipments are rising as a result.

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Shipments are off the dial.

This growth has been buoyed by easier access to different markets and a raft of free trade agreements. High-growth markets in Asia also continue to provide export opportunities for Australian SMEs.

In fact, according to the 2016 DHL Export Barometer, the majority of Australian exporters expect orders from Asian countries to increase in 2017. Heading the field is China, followed by South East Asia, Japan, South Asia and South Korea. Nevertheless, traditional markets are also extremely important with the UK, France, NZ and the US still taking the lion’s share of Australia’s exports.

Delivery companies are seeing staggering growth in cross-border shipping services from Australian e-tailers. And interestingly, fast delivery is no longer the most crucial factor for them. Instead, e-tailers—selling everything from cosmetics and fashion apparel to vitamins and slimming tea – require cost-effective solutions, particularly for low-value goods.

Fully-tracked cross-border returnable services

E-commerce growth has also seen a shift from economy shipment solutions, as homegrown Aussie fashion e-tailers like Daily Jocks and Showpo see the advantages in passing the savings of end-to-end services on to their customers.

In keeping with the wider trend, popular sales destinations for the suppliers range from countries as far afield as the US, UK, Canada, Germany and France.

With solid fulfillment services in place, a range of cost-effective packet shipment solutions in place and international trade becoming easier by the day, I believe that 2017 will see Australia’s vibrant band of get-up-and-go e-tailers and SMEs grow from strength to strength, laying a very firm foundation for future growth.

cross-borderMalcolm Monteiro is the CEO, Asia Pacific, DHL eCommerce.

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  • We’re also seeing the rise of online shopping and dropship arrangements in regional Australia. With Australia being a melting pot of cultures, more specialty shops and niche markets are opening up as online shops.

  • Sajjad Shahid

    Malcolm, its one of the finest article I’ve came across which wraps up the upcoming trends of Australian Ecommerce industry brilliantly!

    I believe the future of Australian ecommerce industry is all fired up; much credits to the rise of Internet usage (as you mentioned in your article that young Aussies love to buy cross-border) , mobile devices, and of course the country’s overall economy.

    I love Australian Ecommerce Industry, for this I tried to dig deep to discover the extent of challenges, opportunities, and trends that are shaping in our industry (via questionnaire) I decided to go to the experts who are involved in the Australian ecommerce scene. I would like to share in a summarize form what I found:

    “What the Future Holds for Australian Ecommerce?
    It seems that Magento, Shopify and WooCommerce will continue to be the choice of ecommerce experts. The need for a reliable and scalable ecommerce store solution necessitates these choices. While everyone has their own favorite themes and plugins, the overall consensus was on quality that add value to the online store in the long run. Similarly, the choice of the reliable and scalable hosting for the store will continue to be an important factor in the success of online ecommerce ventures.”
    Here is a complete link to the article: https://www.cloudways.com/blog/ecommerce-challenges-australia/. I would literately love to know what is your opinion and love to include ot opinion in my article.

    Using this opportunity I would like to ask what do you think how much artificial intelligence will shape the Ecommere industry?

    Thank you for such an informative article would love to know your word on the question!