Domestic bliss? Aussie e-tailers show record confidence for 2011 despite challenge from traditional retail
Despite pressure from suppliers and manufacturers over online sales, Australian eCommerce businesses have had a successful 2010 and are optimistic about the next 12 months, according to eBay’s second Online Business Index (OBI), a major annual survey of Australian businesses engaged in eCommerce.
Nearly seven out of 10 (69%) respondents, among the largest sellers on eBay.com.au, said that they were optimistic about the business outlook for the coming year – a slight increase over 2010. Indicative of this optimism, online businesses expected to increase staff from an average of 4.4 paid employees to an average of 6 over the next 12 months.
Although the eCommerce market remains confident, the OBI uncovered a surprising issue. The majority (78%) of respondents had experienced difficulties with manufacturers and suppliers who tried to prevent the sale of their products online.
The research revealed that:
- 35% faced issues with manufacturers/suppliers trying to prevent them from selling their goods on the internet or on particular websites
- 25% were required to sell their products at or around a particular recommended retail price
- 22% experienced unexplained problems from manufacturers or suppliers which they suspect was due to selling their products over the internet
Deborah Sharkey, eBay Vice President, will today launch the 2011 OBI with Senator Stephen Conroy, Minister for Broadband, Communications and the Digital Economy, at Parliament House in Canberra. Together with three of the largest sellers on eBay.com.au, Ms Sharkey and Senator Conroy will gather support for a healthy and competitive Australian eCommerce market.
Ms Sharkey said: “Turnover for the top 2,000 Australian businesses on eBay.com.au grew by 38% in 2010, clearly demonstrating that consumers have a robust appetite for domestic goods and for purchasing online. Research demonstrates that one of the main reasons Australians buy online from overseas-based sellers is due to many popular products not being offered online locally. Restrictive practices by manufacturers and wholesalers, uncovered in the OBI research, mean that local businesses are unable to offer the full range of goods their customers want and that needs to change,” said Sharkey.
Kirsty Chapman-Smith, co-owner of Deals4Kids, a South Australia-based party supplies company is expected to turn over $450,000 in 2011, up from $250,000 the previous year. Chapman-Smith says her company’s growth has not come without its share of challenges, which include issues with suppliers who do not sell to online retailers.
“Many suppliers I’ve spoken to don’t want to lose the business of long standing retail partners, despite the fact that more and more consumers are moving online to make their purchases. It’s become an issue of both loyalty and adapting to new sales channels. Suppliers should be working to promote a healthy and competitive retail environment, which benefits consumers and gives them increased selection at competitive prices,” Ms Chapman-Smith said.
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Despite these challenges, Australian online businesses witnessed another year of double-digit growth, which is expected to continue with the roll-out of the National Broadband Network (NBN). Australian-based sellers on eBay.com.au experienced phenomenal growth in 2010 – 10 times greater than retail growth over the same period, with 13% more sellers generating sales over $1 million than in 2009.
“Successful retailers go where the customers are and increasingly that’s online. Respondents demonstrate that they use online as an additional sales channel and it’s these savvy businesses, keeping up with market trends and taking advantage of the high Australian dollar that will win in the retail space” Ms Sharkey said.
Jethro Marks, one of eBay.com.au’s largest sellers and co-founder of online bookstore The Nile, has benefited from the growth in online shopping as consumers take advantage of the greater range, availability and reduced prices he is able to offer.
“Australians like to buy from Australian stores and we’ve presented them with a local alternative to international retailers. This can only improve as the NBN gives greater online access to households and businesses and brings more consumers online.”
Senator Conroy said: "eCommerce has witnessed significant growth in this country, against the trend of the overall retail market. The Government is committed to ensuring all Australians have access to high speed broadband through the National Broadband Network so that all Australians have the opportunity to participate as both buyers and sellers.
“The Government is proud to partner with eBay to launch the Online Business Index," Minister Conroy continued.
Download Bruce Billson's letter.
Download Senator Stephen Conroy's letter.
Download Senator Nick Sherry's letter.
 eCommerce Secure Insight report, commissioned by PayPal, Nov 2010