The Future of Australian eCommerce – Pt 2

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The Future of Australian eCommerce – Pt 2

The Australian ecommerce space has been moving at an ever-increasing pace year on year.

Ecommerce revenue hit $10.61M in 2017 and Australian ecommerce market revenue is expected to show an annual growth rate of 9.3% (2017 to 2022) crossing $16.55M by 2022.

If they haven’t before, Australian businesses need to pay close attention to this shift in the way Australian’s spend their cash. Even if your business isn’t in part of the ecommerce industry, the future trends developing as a result of the massive growth of ecommerce sector, will impact every business in Australia, be it brick-and-mortar or click-and-mortar.

Before we skip ahead and investigate future trends that will reshape Australian ecommerce sector, let’s quickly look at some of the major statistics that will help you better capitalize on the emerging trends.


Key Statistics

  • Average revenue per user for Australian ecommerce market currently stands at $875.59.
  • Australians spent $21.7B online in 2016 on all types of products including physical and digital.
  • Australia’s total online sales are forecasted to exceed $32B in 2017 across both digital and physical goods.
  • Point Cook, Toowoomba, and Liverpool are the top three buying locations in Australia.
  • Department & Variety Store products are the most popular among Australians accounting for as much as 30% of all online purchases.


Key Trends

Below are some of the major trends that will reshape Australian ecommerce industry in the future. Smart businesses will use these emerging trends to inform their business strategy.


  1. Mobile first

The total number of mobile users in Australia is expected to reach 19.4M by the end of 2017 and will rise to 20M by 2019.



Australians don’t just use mobile, they buy from the small screen. As many as 50% of Australians purchased online from their mobile device in 2017 while 72% consumers made mobile payments in 2017.

But Australian ecommerce retailers aren’t prepared for mobile users yet. Over 49% of ecommerce sites aren’t mobile optimized for sales and 37% don’t have any plan to make changes in 2018.

The number of mobile users will increase which means consumers will continue to access websites and make payments via their mobiles. As a business, you have to make your store responsive.

It is critical to optimise your website for mobile including payment processing, customer support, and navigation.


Ecommerce revenue hit $10.61M in 2017 and Australian ecommerce market revenue is expected to show an annual growth rate of 9.3% (2017 to 2022) crossing $16.55M by 2022.


  1. GST for international sellers

International sellers who operate in Australia are required by law to collect GST from their customers. This was implemented in 2017 so the effects of the legislation are yet to be seen, but experts call it a favourable law for local ecommerce market as its anticipated that a handful of international sellers will withdraw from Australia to avoid tax regulations.

Even if they don’t quit, international sellers will eventually become a more expensive option for Australians – which is a good sign for local retailers.

As an Australian ecommerce retailer, you have to keep a close eye on your international competitors and see how they deal with this indirect price increase. Be proactive. Plan accordingly. This could prove to be a big opportunity for you.


  1. Amazon

Amazon started its operation in Australia as a reaction to GST for international sellers’ law, or so some experts say. Whatever the reason, Amazon has entered the Australian market and the waves will be felt quickly.

And this is just the beginning.

This may turn out to be a huge setback for Australian ecommerce industry. It might lead to a price war between local retailers and Amazon. Australians don’t seem to like Amazon’s prices though it offered a hefty discount on several categories during launch.

On the other hand, Amazon brings with it a lot of opportunities for new as well as existing sellers.


  1. Small retailers’ growth

Small ecommerce retailers will grow exponentially in coming years. Here is why.

  1. Nine out of 10 consumers in Australia prefer buying local products. With the implementation of GST for international sellers, local retailers will have a better chance to capitalize and grow sales.
  2. Amazon and other ecommerce platforms make it easier for small retailers to sell online without having a brick-and-mortar store.

If you’re a small ecommerce retailer, consider growing your sales across multiple channels.

If you are a larger retailer, consider how you’ll compete with several small sellers who will join the bandwagon in coming months.


  1. Personalized products

According to Inside Australian Online Shopping 2017, demand for personalized products increased by a whopping 28.2% in 2016. Consumers are in love with personalized products.

Research shows that 56% of consumers are more likely to buy from an online store that recognizes consumers by name.

Australian ecommerce retailers are offering highly customized products and services to their customers. For instance, retailers allow customers to design or customise their own products like clothing, jewellery and home décor.

This is one trend that is expected to take over Australian ecommerce market in coming years. Personalization is what sells right.

  1. Speciality stores

Department and variety store products are most popular with Australian consumers having a growth rate of 7% in 2016. There is one key element these department stores lack though – and its personalization.

When retailers try to offer customized products, they often have to switch to speciality stores, that is, they have to focus on one particular category or a niche.

Consumers demand personalization and it is challenging for an ecommerce store with 2000 products to offer customized services as opposed to a niche store with 200 products.

The number of speciality stores in Australia will increase significantly in next few years.


  1. Retailtainment

The term was coined by George Ritzer in his book, Enchanting a Disenchanted World: Revolutionizing the Means of Consumption, in 1999. Retailtainment is retail marketing in the form of entertainment defined as the intentional use of emotion, sound, ambience, and other variables to persuade customers to buy.

Retailtainment is known as the future of shopping and is widely used everywhere. Shopping should be an experience and the clearer and more enjoyable the brand experience is, the higher likelihood of encouraging repeat customers.

Australians made 90 million more trips to local brick-and-mortar stores in 2016 than the previous year. This was all due to retailtainment.


Brick-and-mortar stores will continue to focus more on retailtainment. This poses a challenge to online stores with no physical store. While future seems to be all about online stores, there are still many opportunities on the table for brick-and-mortar businesses.


The future of Australian ecommerce is set to grow and offer several opportunities to all the players. Planning, forecasting, and continuous monitoring of external marketplace factors should become, and remain, your focus if you want to stay ahead.


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