eCommerce Growth in Australia from 2010 to 2014

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eCommerceGrowth in Australia from 2010 to 2014

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Contents

Introduction ..................................................................................................................................... 3

Mapping ECommerce Growth in Australia between 2010 and 2014 ............................................. 4

Access to Better Deals with Online Shopping ............................................................................ 5

Reduced Effort and Cost Associated To Shopping ..................................................................... 5

Location of Specific Product Specifications ............................................................................... 6

Comparing the Australian ECommerce to Other Nations .............................................................. 6

Large Population Accessing the Internet .................................................................................... 7

An Abundance of Affordable Professional and Skilled Labour ................................................. 8

Rapid Industrial Growth .............................................................................................................. 8

Managing e-commerce Ethics......................................................................................................... 9

Conclusion .................................................................................................................................... 10

Bibliography .................................................................................. Error! Bookmark not defined.

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Introduction

Australia has among the highest levels of computer literacy globally with statistics showing 94%

of the Australian population has access to high speed internet. 79% of these people access the

internet on a daily basis while

staggering 60% will access the

internet on multiple occasions daily

or throughout the entire working day.

With this easy access to the internet,

eCommerce has also registered a

huge boom in recent years,raising

from 27 Billion to 40 Billion in sales

between 2010 and

2014.Thisconstitutes to an income

increase

Ofjust over 3 Billion dollars in revenue each year, which is a staggering amount of revenue for

Australian businesses to tap in to (Solomon, et al., 2013). Australians are increasing, choosing to

shop online due to the cheaper products available online as well as the convenience of shopping

online. Online shopping has resulted in increasing in demand since the consumer is capable of

searching for products online placing orders and waiting for doorstep delivery which reduces

effort, energy and cost linked to shopping. This also allows the Australian consumer to

concentrate more on finance generation which results in delivering a very attractive circumstance

for the consumer and eCommerce solutions.

Figure 1- Internet User - World Bank

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Mapping ECommerce Growth in Australia between 2010 and 2014

Australian consumers have been noted to be among the most active online shoppers and this is

due to a high computer and internet literacy rate (Alexander, 2012). This has resulted in the

nation also adoptingeCommercesolutions aggressively with Australia registering some of the

largest eCommerce sales on an annual basis. Between 2010 and 2014 Australia registered a 13

Billion dollar increase in sales rising from 27 billion for 40 billion. This results in an average

growth of approximately 3 Billion dollars each year and the growth rate has been constant

between 2010 and 2014.

Year 2010 2011 2012 2013 2014

ECommerce

Sales

$ 27 Billion $ 30 Billion $ 33 Billion $36 Billion $ 40 Billion

Figure 2 - Australian Ecommerce Growth

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By observing and analysingthe above tubular column and line chart its clear the Australian

eCommerce have been steadily growing between 2010 and 2014 but the trend is expected to

slow down. This is due to the number of eCommerce websites increasing and the number of

target consumers from within Australia reducing. Consumers are now finding it cheaper to shop

online as this also delivers additional benefits such as reduced effort required during shopping

and added convenience linked to locating specific products rather than window shopping and

wasting time.

Access to Better Deals with Online Shopping

ECommerce websites are capable ofoffering their products and services considerably cheaper

than the local store due to the elimination of stock investment, storage requirements and handling

costs (Süphan, 2013). These are major factors linked to hiking the prices of products sold by

stores and eCommerce are capable of selling the product directly from the source, thus cutting of

middle men and logistical costs that would result in hiking the product or service prices. This

results in eCommerce websites being capable of selling the same products to consumers for

between 20-50% lower than the prices they would be sold for at local stores.

Reduced Effort and Cost Associated To Shopping

Shopping in cities during the past decade has also been described to be a disaster by many people

due to the increasing number of vehicles which result in congestion the roads. For many city

residents simply driving across town to shop has become a nightmare with many simply

abandoning shopping altogether (Ullman, 2013). This is another major reason linked to the

success of eCommerce websites since consumers now don’t want to experience the congestion

on roads as these results in wastage of time, frustration and high transport cost due to the

vehicles mostly being stuck in traffic. The individual also needs to shop for the items they want

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which would require them to move from place to place which further requires effort and results

in time wastage.ECommerce offers aconvenient alternative for shopping directly from your

home or office which results in greatly reducing the effort and costs associated to shopping in a

city.

Location of Specific Product Specifications

ECommerce also provides the shopper with the opportunity to purchase specific product to

match their taste without needing to buy only those available at the store. Online shopping allows

the shopper to filter shopping results which would allow them to identify a specific product or

service they require thus delivering more satisfaction to the consumer. Local shops will usually

stock only popular and fast moving products based on the popular colours, sizes, shapes and

materials while online stores offer a wider verity of product and service specifications.

Put together the above factors have contributed immensely towards the increasing popularity and

growth ofeCommerce in Australia where more consumers are opting to shop online. With

consumers now capable of getting the specific products they require at lower cost and have it

delivered to their door step, they are capable of concentrating more on the professional career.

This is also an important factor linked to improving an individual’s career since it allows them to

target securing specific products and services with minimal effort.

Comparing the Australian ECommerceto Other Nations

While Australia may enjoy a large proportion ofsales through eCommerce it is important to

know that Australia is ranked as the 6th fastest growing eCommercemarket in the Asia pacific

Region.Australia’sECommerce is growing at an average rate of 3% per annum but countries like

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Indonesia have registered a staggeringeCommerce growth rate of around 20% per annum and

doubled its eCommerce revenues over the past 5 years (Thomas, 2015).

Figure 3 - National Ecommerce Growth Comparison

China and India follow close suite registering an averageeCommerce growthrate of 18 and 16%

respectively after which SouthKorearegisters 7-8% growth annually. This clearly demonstrates

the scale at which eCommerce is growing in popularity across the region. Some factors resulting

in high growth rate ofeCommercein many Asia pacific countries include:

Large Population Accessing the Internet

China, India and Indonesia have large populations with the majority of their populations being

youth. There is also a large population of young professional graduating from college and

university which is resulting in the nations having a huge number of surplus professionals to

utilize and develop theireCommerce industries (Anderson, et al., 2013). With job scarcity, many

are turning to the internet to develop service businesses which they use to sell their services and

products directly to international consumers. The international consumer also welcomes this

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20

40

60

80

100

120

1 2 3 4 5

Indonesia

China

India

South Korea

Australia

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move since they are capable of securing the products and services at greatly discounted rates thus

helping cut down their costs. The sheer number of consumers now gaining access to the internet

is considerably larger in Asian than the Australian population which is resulting in the

percentage growth registered in Indonesia, China and India also being larger. Australia only

boasts of population of 23 million while Indonesia boasts of a whopping 250 million which is 11

times Australia population. China and India both boast population way above the one Billion

mark with less than 50% of the population having access to the internet or online shopping. This

demonstrates the scale and proportionand possibility of expansion in the Asian countries which

remain mainly untapped market while Australia is not reaching is peak of consumer demand for

eCommerce.

An Abundance of Affordable Professional and Skilled Labour

Asia Pacific Nations also have an abundance of affordable professional and skilled labour due to

their large populations.Employment is most of the Asian pacific countries has always been a

challenge thus forcing people to adapt to small income generation ventures where skills can be

sold. With the internet offering exposure to the international market, the professionals are now

capable of selling their services to international client which makes many turn to eCommerce

solution to tape in to this lucrative market (Austin & Sugihara, 2013).Affordability also means

the professionals can develop and sell their products and services to the consumer for

considerably lower prices than those being offered by western nations. This has resulted in

turning the western consumer to Asian markets due to the cheaper and higher quality products.

Rapid Industrial Growth

Another major contribution towards the highly inflated growth percentages in the Asia pacific

region is the rapid industrial development in most of the nations. The industries in the region are

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growing rapidly which results in most tapingin to international market (Boestel, et al., 2013). To

do this, the industries require developing affordable and effective eCommerce solution which

will help convenience the consumer to purchasing from the company. This aggressive need to

develop eCommerce solution has also resulted in Asian pacific nations like India to grow in to

being the hub for eCommerce website development and management. Today India has grown to

be the biggest eCommerce website development destination and is also responsible for managing

the majority of international eCommerce solutions.

Managing e-commerce Ethics

Due to the aggressive expansion and demand for eCommerce, there are certain ethical issues

which also require to be monitored to ensure high quality services, information delivery to the

consumer. ECommerce consumers in each of the developing and developed nation will begin

shopping online very cautiously due to the fear of fraud or losses linked to credit card use for

online shopping. This has resulted in eCommercewastes requiring adhering to certain

eCommerce ethics which ensure they deliver the very best services and security to their

consumers and build consumer confidence. Failing to meet eCommerce ethics will automatically

affect the businesses performance since customers are not willing to remain quiet and will turn to

whistle blowing websites to publish their complaints (Clark, 2010).

Whistle blowing or review sites have been sited to play an immense role towards regulating and

improvingconsumerexperience on eCommerce websites. This is because many consumers will

first seek reviews for the websites from previous customers before shopping with the

eCommerce solution.This keeps the websites on the toes at all times resulting in them having to

deliver high quality services to the consumer or risk losing out on consumer trust and

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business.Many also want to avoid negative reviews since once they have been published they are

irreversible and cannot be changed thus delivering a long term negative effect to the business.

Ethics is not limited to only deliver high quality products and services but also requires for the

eCommerce website managers and promoters to use ethical marketing strategies. Ethical website

marketing has grown to become a serious concern in the past 5 years due to many digital

marketing companies resorting to unethical marketing strategies to rank their website key words

high on search engine results.Unethicalmarketing strategies have been identified to have serious

negative effects on the eCommerce website and this will usually be enforced by search engines

like Google. Today Google has various algorithmswhich are used to check quality and failing

these tests would result in a website being black listed and de-indexed by the search engine (Fox,

2012). This could seriously affect an eCommerce websites reputation and performance since

most websites depend on search engines to deliver the majority of its visitors.

Conclusion

ECommerce in Australia has registered a constant growth between 2010 and 2014 but due to the

majority of Australians already having access to the internet and eCommerce online shopping the

trend is slowing. This is because AustralianeCommerce websites have already saturated the local

Australian consumer market and have a limited number of consumers to target in future. With

this in mind, AustralianeCommerce websites will require to consider targeting foreign market to

secure more consumers. The best alternative for AustralianeCommerce websites is to consider

partnering witheCommerce website in Asian countries which will provide a more competitive

market. This is important sine many of the Asian eCommerce websites are growing very rapidly

and partnering with them will allow the Australian websites to access larger markets. Market

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saturation is a major concern for every business and it’s critical to consider alternative marketing

approaches so as to maintain growth and development thus ensuring the eCommerce businesses

continueregistering continual growthboth in Australia as well as on the International market.

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Figure 1- Internet User downloaded from World Bank website..................................................... 3

Figure 2 - Australian Ecommerce Growth – made by Student ....................................................... 4

Figure 3 - National Ecommerce Growth Comparison – Made by Student ..................................... 7