By Keri Algar
SYDNEY, NSW: According to the IbisWorld Industry Inside report Australia’s biggest bargain hunting state is New South Wales, where a third of online purchases originate. Twenty-four per cent of online buying is thanks to Victoria, followed by 20 per cent in Queensland and 10 per cent in Western Australia.
If IbisWorld’s predictions are correct, then $12.9 billion worth of retail revenue will be generated by online sales this year. However, this would only account for 3.4 per cent of overall consumer retail spending in Australia, which is only up 0.4 per cent on Access Economics’ estimation from 2010.
Yet if Australia is to follow its consumer sister markets overseas, such as the United Kingdom and the United States, then online sales are set to increase.
As for IbisWorld’s recommendations, the industry analysts suggest that if Australian retailers are serious about competing with overseas online markets, “they will need to do so at competitive prices.”
“Many of the goods purchased online are considerably cheaper overseas, regardless of any additional cost inherent in paying the GST. Any move by domestic retailers to establish online stores offshore to avoid GST will still leave overseas retailers still far more competitive,” reads the report issued this week.
“Domestic retailers need to do more to exploit the advantage they have in offering faster and cheaper shipping to consumers. Retailers would do well to price their online goods at a more competitive rate and if possible, stock a wider range of goods. Without harnessing the internet effectively, it is difficult to see that websites that offer little more than that presented in store will be effective in stopping customers from clicking the purchase button on an overseas website.”