Harveys, Good Guys blamed for Australia’s low online sales growth

By Keri Algar

SYDNEY, NSW: Australia’s underdeveloped consumer electronic commerce market is due to the lack of an online presence by large retail chains such as Harvey Norman and the Good Guys, according to an analysis released yesterday by consulting company Frost & Sullivan.

The report found that Australia trails behind the United Kingdom and United States by three years, with an estimated 40 per cent of online shopping being lost to overseas sites.

Currently, online spending accounts for only 3 per cent of total retail sales. The expenditure for tangible goods in 2010 is forecast to reach $12 billion, and room for growth is apparent with spending expected to reach $17.7 billion over the next four years.

The report recognises the online presence of retail stores including Big W, JB Hi-fi and Dick Smith, but highlights the need of an online launch of other retail chains in the next two years to realise potential growth. A lack of in-house support from senior management stalls electronic commerce, according to the Frost & Sullivan analysis.

“The number of Australian shoppers using international retail sites confirms that there is a large untapped potential for Australian retailers to develop a local online customer base,” said Phil Harpur, senior research manager of Frost & Sullivan.

“However, we are unlikely to see major growth in this sector until more of the big name retailers get online.”

The report indicates that over one-fifth of respondents intend to spend more on online goods in the next year; 38 per cent cited cheaper prices as the reason.
 

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