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Free report: Australian and NZ Online Shopping Market Insights 2011
Growth in the online shopping market is expected to grow at least twice as fast as the total retail market over the next four years.
In 2011 we expect online shopping expenditure in Australia to reach $13.6 billion, a growth of 13% fromthe $12 billion expenditure in 2010. This equates to 5.5% of total retail sales and per capita expenditure of $600, and reflects an 11.9% increase from $536 in 2010.
It is estimated that $6.0 billion will be spent by Australians on overseas websites this year. This equates to 44% of the total online purchases for 2011, an increase of 25% from 2010.
As more consumers look to shop online they are incentivised by:
- Lower prices
- Convenience of shopping at a time and place appropriate to them
- Access to a broader product range
- This is leaving traditional bricks and mortar retailers struggling to compete with international retailers on price given the major structural issues around higher labour and rent costs.
- As online retailing continues to grow, some retail sectors are more at risk than others. Retail sectors that are non-food are more vulnerable to offshore online retailing and these include clothing, footwear, gaming, books, magazines, recreational products, cosmetics etc.
Key drivers of this growth are:
- Global supply chains are now delivering cost effectively and quickly to consumers removing what was previously a major barrier to shopping online offshore
- The exponential uptake ofmobile devices such as iPads and the role social media is increasingly playing in the purchasing decision. Consumers indicated in the survey that mobile devices made online shopping easier and importantly, increased the time available to spend browsing for goods to buy online
- The strength of the Australian dollar and the range of products available to Australian customers
- An increased consumer awareness of the benefits of buying online has also driven a rapid increase in overseas online shopping. Interestingly, our report also highlighted that consumers across all demographics were shopping online both offshore and onshore. This demographic shift is important as the next generation of customers increase their spending power will also cement continued growth in online shopping. While price and range remain the key drivers for growth in overseas online shopping, very few respondents (<1%) cited that they shopped overseas to avoid GST. Our survey findings indicate that the price differential between local and overseas retailers is far greater than the 10% rate of GST imposed locally.
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