If entering a new market sounds like a daunting task doomed for the boardroom outback, consider this. Australia is a lucrative proposition for online businesses that want to enter a new market and gain economies of scale. As the world’s sixth largest country by total area, B2C ecommerce sales grew by 26.7% (2011/2012), reaching a staggering $13.3 billion in 20121.
To fully embrace this market and maximise ROI there are factors to consider before strategising. With this in mind, our blog post highlights some key trends of this fascinating country, identifying the opportunities it presents for international brands and businesses.
Australia boasts one of the highest uptakes of the internet in the world, with 89.8% of the population online, totalling 19.5 million internet users. It is also the fourth largest ecommerce market in Asia-Pacific2 and its value of online sales is expected to reach $31bn (2013)3, with the average Australian consumer spending an impressive £842 per year online4.
Historically consumers were resistant to e-commerce largely due to their scepticism of online payment security5. However, the introduction of reliable payment methods and competitive product pricing has given consumers confidence in shopping online.
The Australian Communications and Media Authority (ACMA) reports consumers over 14 years in possession of a mobile phone increased from 8% (June 2008) to 32% (June 2012). Denoting mobile internet usage has not replaced fixed-line internet access but is used in conjunction with a household connection. They also revealed only 8% of these same mobile users do not have internet access at home.
Devices most frequently used for online access are laptops (47%) followed by desktops (27%)6. Meanwhile, the most common location of internet access includes the home (65% of consumers, particularly older demographics) and work (35% of consumers, predominately among 25-34 years and 35-44 age groups).
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Three quarters of local retailers receive less than 25% of sales from online retail, indicating that domestic retailers haven’t fully optimised online channels7. With Sydney, Brisbane and Melbourne all ranked in the top 20 as the most expensive retail destinations in the world, the digital space is an increasingly attractive proposition8 with few taking advantage of it.
Australia’s online audience is largely mature representing 32% aged 50 of over, followed by 27% between 35 and 49 years9. Consumers aged 18 to 24 are the most active online users in Australia with 96% using the internet on a regular basis10. However, its baby boomers (55 to 64 years) who are the fastest growing demographic online, rising from 63% in 2008-2009 to 71% in 2010-201111.
Consumer attitudes and online habits
Statistics indicate Australian consumers often trust domestic online stores more than international e-commerce platforms, with 22% purchasing only from an online store with a physical presence in the country12. International brands wanting to penetrate this market should support local preferences and adapt online marketing strategies to fit demands.
The Australian Communications and Media Authority (ACMA) highlight the most popular online activities are:
• Shopping (buying and selling)
• Entertainment activities
• Sourcing information
The Australian Government Productivity Commission (2011) revealed the main factors that draw Australians to shop online are:
• Lower prices
• Comparing products and prices
Social media penetration and platforms
The uptake of social media in Australia is fourth in the world behind the USA, Canada and South Korea and ahead of Russia, Spain and the UK. Facebook is the main social media tool and is highly popular in urban cities. Unsurprisingly, Smartphones play a pivotal role in driving social media penetration with 40% regularly accessing networks (2012) compared to 29% (2011).
Australia may share a similar cultural background with other English speaking countries but its online behaviour and landscape is unique. Frequent online barriers for domestic retailers include integration of systems, limited internal skill sets in e-commerce and physical distribution of goods.Consumers with preferential treatment to online retailers with a physical presence may pose to be a challenge for some international online businesses. However, a localised site that applies bespoke online marketing strategies that allign consumer needs will reap rewards of this growing market. Oban Multilingual’s top tips includes:
• Using a local domain to increase trust with consumer groups and optimise the site for local search
• Build trust in your online offering with a watertight social media policy. Often described as cautious, almost one in four dissatisfied Australians share their experience online so ensure your social media department responds to their needs efficiently and on brand
• Optimise online channels for mobile and tablet devices to meet the on-the-go consumer habits evident in the market
• Ensure your website can be found by ensuring it is linked to by relevent Australian online audience influencers
1 Emarketer –Ecommerce booming down under
2 Emarketer – Ecommerce Booming in Australia
3 Econsultancy ‘Australia: Ecommerce Trends Briefing’ 2013
4 Ofcom consumer research October 2012
5 Datamonitor – Consumer Lifestyles in Australia, 2012
7 Smart Company ‘Australian retailers still not ready for the internet’
10 Australian Bureau of Statistics
12 Econsultancy ‘Australia: Ecommerce Trends Briefing’ 2013