By Claire Reilly
It’s no secret that many consumers choose to buy their electronics online, and many of those consumers are bypassing Australian e-commerce sites to do so. One of the categories that has been hit hardest by the growing prevalence of grey imports is digital imaging.
Current.com.au spoke to one of Australia’s biggest imaging brands about the threat of grey imports to Australian retail. According to Andrew Giles, corporate communications manager at Canon Australia, it is an issue that must be addressed by everyone in the industry.
“We’re in a global marketplace, and Canon is very focused on offering the Australian consumer great value locally,” said Giles. “That comes down to a partnership and shared responsibility around the issue.
“On our part, we’re very focused on working with local partners to help the deliver the Australian consumer value in store. It’s quite simple: The grey market doesn’t support the local market, it takes value out of the market. So there’s no benefit for any of us to start going off shore.
“We’re very focused on keeping sales on shore. In the Australian market we actually have a competitive disadvantage in terms of the Low Value Threshold of 10 per cent for products under $1,000. Many products fall under that category, and it’s an issue that needs to be addressed. In many ways it’s actually reverse protectionism, and it is giving a free kick to offshore companies to the tune of at least 10 per cent.”
While the Productivity Commission is still looking into issues surrounding the Low Value Threshold debate, Giles said there were still steps vendors could take to support local retail.
“One of the things we’ve done since mid-2010 is to actually take a series of price actions ourselves as a wholesaler, to the degree that we can while still supporting local investment and local operations. The other thing we’ve done – for example down at the Digital Show in Melbourne where we had the opportunity to sell directly from the stand – is to promote local retailers.
“We were having conversations with consumers based on their needs and giving them the experience, and then we were directing people out to the closest retailer in Melbourne to continue that discussion at the retail level.”
As far as the future of the industry goes, it’s not all grim news. Giles said that Australia still had a chance to be competitive, but the issue of the Low Value Threshold still needed to be address.
“We’re firm believers in the local market and that there is exceptional value to be had in Australia retail. If you look at our products, some of the prices that are being offered in local stores here in Australia are very competitive. We’re definitely seeing the adjustments taking place.
“But the issue for us as an industry is, given our high costs compared to overseas, how do we actually run a sustainable operation into the future?
“According to the National Retail Assocation, the Low Value Threshold has a direct impact of 34,000 jobs here. That doesn’t take into account the other investments that vendors are making in the local market in terms of the flow on to advertising agencies that are involved in marketing campaigns and so on.
“The jobs impact of that Low Value Threshold is quite significant. But we’re very keen to get the debate going. We’re looking forward to the Productivity Commission having a look at this logistically and saying, ‘For the sake of the industry, how do we best reconcile these issues together?’"