Describes how widely e-Commerce is used, the primary sectors that sell through e-commerce, and how much product/service in each sector is sold through e-commerce versus brick-and-mortar retail. Includes what a company needs to know to take advantage of e-commerce in the local market and, reputable, prominent B2B websites.
Last Published: 7/24/2018
Overview
In 2017 Australians spent approximately USD16.3 billion (AUD22 billion) on online purchases. From 2016-2017 the local ecommerce market grew by 11.5%. In comparison, the bricks and mortar retail market grew by 3.3% over the same period to reach USD193 billion. Leading Australian eCommerce platforms include Amazon eBay, Gumtree, and Catch of the Day. Leading Australian etailers include JB HiFi, Kogan, SurfStich, the Iconic and Appliances Online.

In December 2017, Amazon opened its .au website, and also placed a logistics warehouse in Melbourne. Whilst the stock offerings are not as comprehensive as on its .com site, it is predicted that Amazon will take a considerable slice of the market leading share that in its absence, ebay.com.au has built up.

Current Market Trends
According to a recent survey carried out by the National Australia Bank (NAB) entitled Online Retail Sales Index, over a 12-month period to December 2017, the fastest growth sectors include department and variety items (CAGR 30%), fashion (22%). homeware and appliances (15%). Other leading segments include media (13%), health & beauty (8.7%), food & liquor (6%) and hobbies & recreational goods (5%). 

Domestic eCommerce (B2C)
An overwhelming number of Australians (79%) buy domestic products from local etailers. This market has grown over 11% over the last year. Over 40% of all B2C transactions take place on eCommerce platforms such as eBay, Amazon, and Gumtree. The remainder of B2C eCommerce takes place at the individual company website. With over 13 million active Facebook users in Australia, social media is also a big driver in the promotion of B2C transactions. Retailers are driving sales through a mix of shop and online promotions or “multi-channel”. The finance industry is a major driver with the large four Australian banks providing a range of cutting-edge tools for accessing accounts, and paying bills and making mobile transactions. B2B sales are somewhat more fragmented with less reliance on eCommerce platforms for trading.

Cross-Border eCommerce
Only 21% of Australians purchased products in 2017 from international sellers. This has increased by 7.3% over the last year. 40% of goods are purchased from America, 32% comes from China, and 22% from the U.K. These purchases are generally made due to increased product offerings from overseas suppliers and cheaper prices.  Until 2018, a Goods and Service Tax (GST) was not applied to low value (less than AUD1,000) imports. However, from July 1 2018,  the Australian Taxation Office (ATO) is changing the way GST is calculated. The GST amendments are targeted at goods sent from overseas to Australian consumers. GST will apply to sales of low value imported goods to consumers. A recipient is not a consumer if they are a GST-registered business who purchases the goods for use in their business in Australia. The supplier can be sure this is the case if they obtain the recipient’s ABN and the recipient states to them that they are GST-registered.

The reporting requirements for customs documents apply when the supplier is registered for GST in Australia and responsible for sales of low value goods. This includes where items where GST is not charged because the customer is not a consumer – if so, the tax information which must be included is the supplier’s GST registration number and the recipient’s ABN (if the supplier has it).

A supplier only needs to be registered for GST if the value of their sales of low value goods imported into Australia by consumers (plus any other sales made that are connected with Australia) is AUD75,000 or more in a 12-month period. If the supplier only makes sales to Australia of goods imported by GST-registered businesses, they will not be required to register for GST. This means there will be no requirement to include the information in customs documents.

More information can be found at  www.ato.gov.au/AusGSTincluding  a webinar and some short factsheets as well as detailed web guidance and links to public rulings.

Other sections relevant to US exporters include:
eCommerce Services
Major fulfillment service providers in the local market include Australia Post, DHL, FedEx, TNT, Toll.

Popular eCommerce Sites
Popular eCommerce sites in Australia include Ebay, Gumtree, Amazon, Catch of the Day, Kogan, JB HiFi, The Iconic, Temple & Webster, Appliances Online, and Amazon (United States).

Online Payment
Approximately 70% of all online payments are made using credit and debit cards. PayPal represents 30% of online transactions in Australia.

Mobile eCommerce
Mobile eCommerce represents a significant opportunity in the local market. With mobile penetration at close to 100%, mobile payments and purchasing is a major strategy for all retailers. Australians are expected to increase their spending on mobile devices by 50% this year to USD7.7 billion (AUD10.4 billion).

Digital Marketing
The fastest growing segments in the Australian online advertising market are mobile and online video, and both are expected to outperform the market significantly over the next five years. Mobile advertising, for example, is forecast to grow at a Compound Annual Growth Rate (CAGR) of 39% between 2013 and 2018, while video advertising is expected to grow at 31%.

According to a recent survey, less than one-third of retailers rate their eCommerce/digital strategy highly as best practice and key to driving sales. Nonetheless, around half of retailers consider their eCommerce/digital strategy as moderately in line with best practice and a driver of sales.
On average, retailers report that 53% of their advertising budget is allocated to online media. 42% of retailers also report that this advertising budget allocation is expected to change in the next 12 months.

Major Buying Holidays
Christmas is a big driver for online sales, as well as Boxing Day (December 26), Easter, Mother’s Day (second Sunday of May each year), Father’s Day (first Sunday in September each year), Valentine’s Day and Click Frenzy (set up to mimic Cyber Monday), US Black Friday and Merry Monday (December 19).
 
Social Media
Social media is an important part of online advertising in the local market. Most companies see social media as a method for increasing brand awareness, advertising and promotions and generating sales. With over 13 million users, Facebook and YouTube are the two most used mediums for product promotion. Other leading sites include WordPress, Tumblr, LinkedIn, BlogSpot, Twitter, Instagram, TripAdvisor, Yelp, Snapchat and Pinterest.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Australia eCommerce Industry Trade Development and Promotion eCommerce