SYDNEY: Australia’s e-commerce market is seriously underdeveloped, lagging both the US and UK markets by three years, according to a Frost & Sullivan report.
Online retail consumer spending in Australia in 2010 is expected to account for approximately 3% of sales domestically and 5% including international sales. In contrast, online as a percentage of total retail spend is more than 5% in both the US and UK domestically.
Frost & Sullivan senior research manager, Phil Harpur, said the number of Australian shoppers using international retail sites confirms that a large untapped market of local online customers exists.
Harpure said: “We are unlikely to see major growth in this sector until more of the big name retailers get online.”
Total consumer e-commerce expenditure in the 2010 calendar year, excluding online services such online ticketing and events, travel, music downloads and financial services, is forecast to reach $12 billion.
This equates to per capita expenditure of approximately $536 per year, which is slightly behind the US and UK markets. Expenditure is predicted to show moderate growth over the next four years, rising to $17.7 billion by 2014 with a compound annual growth rate of 10.2%.
While the number of local e-tailers entering the Australian market has increased significantly in the last five years, there has been no corresponding increase in the volume of local transactions. The report notes that a significant proportion of new entrants fail to succeed over the long term.
Survey responses found price is the key driver for shopping online, nominated by 39%, followed by the convenience of shopping from home, accounting for 29%. The majority of consumers, 58%, showed no preference as to when they shopped, stating that they split their time evenly between weekends and weekdays.
A key reason for the lag in local activity is the lack of online presence by many of the large retail chains and department stores.
Despite moves by stores including Big W, JB HiFi and Dick Smith, the small number of e-commerce participants and a lack of sufficient internal support from senior management continue to inhibit progress in this area.
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