Australia presents a strong ecommerce market, so here's what you need to know about positioning your brand.
August 26, 2014
Deciding whether to enter the Australia ecommerce market can be a big decision for your business, but do not overcomplicate it. The country may be far-flung and its logistics needs might seem complex, but you’ll have partners who can streamline all that comes with ecommerce shipping.
Instead of worrying about potential differences in this new market, let’s focus on the similarities. Australia has long been an important trade partner, and numerous businesses have established successful outposts there thanks to its familiar legal, corporate cultural environment. In other words, there’s a blueprint for success. All you need to do is build and execute your ecommerce strategy. Understanding the Australian customer is your first step.
They are economically healthy
Australian ecommerce shoppers are a lot like North American and European consumers—but they have deeper pockets. Consider them small but mighty, with a GDP per capita of $67,468, according to World Bank data. That compares favorably all over the world — for perspective, the United States has GDP per capita of $53,143, while Canada’s is $51,911.
Within the Asia-Pacific region, Australia leads digital buying spending and research shows that the average Australian online shopper is predicted to spend $4,500 in 2016. This statistic is important as you evaluate whether to enter the country at all — but also as you consider what products to offer.
The market is rapidly growing, but as early as 2011, certain trends began emerging that are still relevant today. According to the Australian Communications and Media Authority, consumers with higher incomes and levels of education were more likely to have purchased online (some 75 percent of those with postgraduate degrees). Students, too, were also more likely to go online to buy (68 percent of them). In other words, your product mix should appeal to consumers with spending power. It’s also smart to take a look at what consumers keep hunting for online — fashion and electronics, for example, are popular.
Australia is the only advanced economy that didn’t descend into deep recession following the 2008 financial crisis, and the sustained strength of the Australian dollar versus other currencies only enhances your business’s appeal—your products are cheap relative to their domestic offerings. But given their buying power, they’re also becoming accustomed to getting what they want from retailers who court their business. Keep this in mind as you develop your business strategy.
They are all about communication
It’s a given that communication is an integral part of success for any business. Fortunately, you won’t be tripped up by language barriers in Australia—meaning you won’t have to do much more than tweak your existing branding suite to attract Australian consumers.
Providing outstanding customer service will also come naturally to you, since expectations are similar to those demanded by American and European consumers. Much like other Western markets, taking every opportunity to show you handle your customers’ orders with care goes a long way. When hangups arise, keep your buyers in the loop. Keeping your customers informed about what’s going on will make them feel valued and cared for, even in tricky situations.
Finally, Australians are super connected to social media, which has a big impact on how they make purchasing decisions. According to Sensis, more than 20 percent of users use social media to research products, and 58 percent of those reported that their research resulted in a purchase. Establishing an active presence on social media can also help improve customers’ loyalty—encouraging that first purchase, and many more after that.
They are savvy shoppers
In general, Australians just want the best products they can find, no matter where it originates. According to a 2012 study from World Pay, 76 percent of Australian online shoppers buy from overseas retailers, a figure that’s only grown. And judging by North American trade agreements, they’re already receptive to American goods and services. Moreover, research shows that younger generations of Australians aren’t as wedded to the idea of domestic-made products as their older counterparts, so there’s an opportunity to create loyalty for your offerings by sweeping up more of those younger customers.
In addition to the relative strength of the Australian dollar, which drives down costs on international transactions, Australia’s import policy is also working in the favor of foreign retailers: Imports with a value worth less than 1,000 AUD are exempt from customs duties and taxes.
The thing is, they want their products to be high-quality and to be there when they need them. In addition to curating a SKU mix that appeals to the wealthy, sophisticated Australian shopper, be sure to develop a packaging and ecommerce shipping approach that will also appeal.
In deciding whether to enter a new geography, you need to understand the market—and when it comes to Australia, those dynamics and purchasing power are clearly attractive. In order to deliver the best customer experience, you need to get inside your customers’ heads. When it’s time to execute on your Australian strategy, you’ll have options: With third-party logistics partners like Shipwire, you can define the customer experience with variety in ecommerce shipping speeds to packaging to marketing collateral, underscoring just how in sync with your customers you really are. Ready to learn more? Sign up for notifications about our new Australian warehouse—the largest and most advanced in the country.
Download our complete guide to ecommerce in Australia for more information on what you should know when entering the market and see our next post on Building Your Brand and Increasing Sales in Australia.