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Challenges in the Australian Ecommerce Retail Industry

Posted by Guest Poster on Jul 9, 2014

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Interested in delving Down Under?  An informational guest blog post on the unique challenges that Australian eCommerce merchants face, by SkuVault's new strategic partner, BuyMeStuff.

It’s a known fact that “brick and mortar” is fast turning into “bricks and clicks”. Having an online presence seems to be compelling for most retailers for the fear of being left behind. The allure of the World Wide Web shines the beacon of light for the lost souls who can find comfort on the shores of the e-commerce landscape. There is no doubt that Australian retailers have had significant growth and success in the online retail industry. It is estimated that the online retail spending increased to $15.25 billion for the year to April 2014, or by 6.4%. Yet, there are several hurdles that can eventually make or break an online business in Australia.

The Australia eCommerce Market

The Australian population is relatively small with 22.68 million compared to that of 314 million in the US or 63 million in the UK. This raises an issue of possible expansion in the market unless the business is scaled quickly and globally. Establishing the business overseas seems to be the growing trend.

While the small market size is one hindrance, I find the problem of overseas sellers competing in our own backyard a bigger challenge for Australian retailers. It is often the case where online marketplaces have significantly lower prices offered from overseas retailers while the Australian counterparts get left behind due to poor market competitiveness.

Competing with Australian Retailers

I believe that unless Australian retailers strive to become competitive by implementing fast and reliable delivery times, user friendly interface, competitive prices and free shipping we will not be in a position to compete on a level playing field with international competitors. An important business tool that further enhances the efficiency and offers great competitive edge but is often neglected by the Australian retailers is having an inventory and warehouse management system to take control of their stock in real-time like the platform our friends offer at SkuVault. I often find that the goods ordered from an overseas retailer reaching my doorstep quicker than the goods ordered through a local online store. Surely, it is not snail mail but it is the lack of inventory and management that stalls the delivery of the purchased product.

Multi-Channel Strategy

On the other side of the coin, I think it is essential for Australian retailers to have an online retail sales strategy. They have to be more active in their website management including dynamic content that brings traffic everyday. They have to understand how to market and sell their products seamlessly across multiple channels from social networking sites to online forums, multiple market places and devices such as smartphones to tablets as well as laptops. With this in place, Australian retailers stand a better chance of unlocking the potential of 53% local online shoppers who solely purchase from Australian websites.

Finding a Balance

We are admittedly geographically poorly positioned compared to our American, European and Asian counterparts and this reflects significantly on the high costs of running a business with high wages, complex compliance and tax structure. It is a constant struggle for businesses to make an informed decision to offshore certain functionalities in order to keep the costs down. It is a fine balance between the delivery of competitively priced products and the imperative to remain profitable.

But hey, who is complaining? After all having a global online presence seems to be the ultimate goal for every business, right?

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Topics: eCommerce, Marketplaces, Guest Posts