Australian e-Commerce & Long Distance Relationships

In e-Commerce terms, Australia remains well and truly the lucky country. Despite our relatively small population of 22 million people, we’ve established a strong and mature e-Commerce market, with enviable ties to some of the world’s fastest growing markets, despite them being relatively far from us, geographically speaking.

In fact, according to a number of research papers, Australia ranks one of the top countries in terms of internet use, mobile adoption and mobile purchasing.

While Australians do tend to embrace technology faster than many countries, a lot of our e-Commerce growth does comes down to good fortune. Between mid-2011 to mid-2013, for example, the Australian dollar (AUD) traded at parity with the US Dollar (USD) and this fuelled significant growth in the inbound e-Commerce market. Australians’ adoption of online shopping accelerated and despite the AUD to USD now being 30 percent weaker, the thirst for international brands remains.

At DHL e-Commerce, we’re seeing increasing demand not only for international shipping services, but also the integration between these services and online retailers’ front-end sales channels. As demand grows overseas, e-tailers have recognised they need more automated and streamlined processes if they’re to keep satisfying consumer needs, while growing their order traffic and volume.

Maintaining long-distance relationships

Many people underestimate Australia’s size. Our country is geographically as large as the United States and 1.3 times bigger than Europe. It takes as long to fly between New York and Los Angeles as it is from Sydney to Perth; and a parcel that weighs half a kilogram costs just as much to be transported from Sydney to Brisbane as it does from Sydney to the US. In the great southern land, delivery times and shipment costs can often challenge online retailers, particularly on the domestic front.

We often talk about last-mile delivery as the make-or-break for e-Commerce players, but in Australia, the first mile, meaning the transit between cities or countries, often proves even more challenging.

SMEs need affordable solutions for even small goods in small batches. From our experience, most of their shipments have a value of $75 or less. Our job, as logistics providers, is to keep these delivery costs effective, even when businesses haven’t reached economies of scale.

At times, Australian merchants have had trouble with sudden changes in overseas regulations. Most recently, the policy adjustments made in China that removed, then reinstated, many of the concessions given to online purchases from Australia and other overseas exporters.

For most Australian online retailers however, China’s market opportunities remain worth dealing with some operational uncertainty. Its growing middle class of 600 million people attaches great importance to high quality products, which Australian brands are renowned for.

For most e-Commerce businesses who are considering entering or expanding further into China, and indeed any other overseas market, slowly testing the market and technology usually yields the most sustainable results. The strength of the “Made in Australia” brand holds true in not just China, but a range of mature and emerging markets alike including Japan, South Korea, and India.

If online retailers can keep the quality of products high and the delivery process painless, no matter the distances or regulations involved, Australian e-Commerce can indeed stay lucky for years to come.


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