Australians shopping online spend more on purchases from local retailers than they do on purchases from overseas retailers despite the increasing strength of the Aussie dollar.
Despite a recent surge in overseas spending, driven predominantly by the strength of the Australian dollar, most online retail purchases are local, a trend that is expected to continue as Australian businesses increasingly move online. Local retailers have been slow to make the transition to online, with major retail chains Big W and David Jones only establishing an online shopping presence this year, several years behind overseas competitors like Walmart.
The Australian online retail market is set to reach AU$36.8 billion by 2013, up from a forecasted figure of AU$26.86 billion for calendar year 2010 according to PayPal’s ‘eCommerce: Secure Insight’ report from Forrester Research and The Leading Edge. The report found that Australians show a preference to ‘buy Aussie’ with nearly a quarter of Australian adults only shopping online with domestic websites. With the main driver of overseas shopping being a wider choice, rather than price, bringing into question the Australian Retail Association’s calls for the Federal Government to levy GST on goods from overseas retailers valued at under $1,000.
Last week the Australian Retailers Association Executive Director Russell Zimmerman claimed Australia’s GST free threshold for imports created an unlevel playing field for all Australian retailers.
“It is estimated that Australian consumers will spend in excess of $12 billion dollars online this year and almost half of that will be spent offshore” Zimmerman said.
“It’s never been easier or more cost effective for consumers to purchase goods from overseas. We currently have a situation where there is no GST or import tax charged for overseas goods less than $1000; the Aussie dollar is almost matching the US dollar; and many overseas online shopping sites offer free delivery and easy return options.”
PayPal Managing Director Frerk-Malte Feller believes that Australian retailers have a strong competitive advantage over their overseas counterparts and need to better integrate their bricks and mortar with online to win over Australian shoppers.
“Our research paints a positive picture for domestic retailers and there is a strong call to action for Australian ‘bricks’ to implement comprehensive online strategies. Consumers are no longer looking for an ‘in-store’ or an ‘online’ retail experience, they require retailers to provide an integrated multi-channel experience that is not based on the location of the sale but on the customer experience, be it online, in-store or on a mobile device.”