Why Australia Appeals to European Retailers

For UK and other EU online retailers seeking new markets, Australia should be at the top of the list. With a population of just over 24 million, Australia ranks among AT Kearney’s 2015 top 10 e-commerce markets, in the same company as much more populous countries such as China, the US, Germany and Russia. Australians are generally young and comfortable with technology (averaging 3.1 mobile devices per person in 2013), and they enjoy shopping online for fashion, luxury items, home goods and more.

Altogether, e-commerce in Australia is a $23.7 billion market. Let’s look at why Australian shoppers are such a force in cross-border e-commerce, and how EU-based merchants can best serve them.

Standout traits of Australian cross-border shoppers

In many ways, Australian cross-border shoppers represent the ideal. They have a strong preference for international shopping, spend big on clothing and luxury items, are patient with international shipping times, and have a lower than average rate of returns. All of these factors combine to make selling into Australia a prospect with strong appeal.

Australian customers are the most likely in the world to make cross-border purchases. The Paypers ranks Australian consumers ahead of Canadians and Russians in terms of their proclivity for overseas shopping. Since 2013, when cross-border purchases accounted for just over half of all Australian online purchases, cross-border shopping has grown by slightly more than 16 percent compounded annually. That’s double the overall compound annual growth rate for Australian e-commerce, which was 8 percent from 2012 to 2014.

Regardless of where they’re purchasing, Australians outspend the rest of the globe on clothing. Vogue Australia reported that per-person yearly clothing purchases in Australia totalled US$1,050. For comparison, EU per-person spend was US$663. When it comes to online fashion purchases, Australian spending patterns are trending upwards. A Lyst survey found the average online clothing order is $535, with Sydneysiders racking up an average online apparel ticket of $667.

Currently, Australian online shoppers make most of their cross-border purchases from the US, the UK and China. This is good news for UK merchants seeking to expand into Australia, as Aussie shoppers already show a strong preference for UK shops and are familiar with UK shipping times. It also indicates the potential for other EU merchants to sell into Australia, as long as they invest wisely in localisation.

What successful EU merchants will offer Australian shoppers

As with any cross-border venture, retailers must invest in localising the shopping experience for the Australian market. That means offering the most popular payment methods, multicurrency support for the Australian dollar, and copy that reflects Australian English spelling, word choices and grammatical conventions. All of these actions help build trust in your new audience by showing your familiarity with the market.

Australian shoppers are increasingly likely to shop on their phones and tablets. That means your digital commerce sites must be mobile-optimised to succeed. Android is the preferred operating system among Australian smartphone users, and at least 40 percent of smartphone users have already started using their phones to complete purchases. Visa is the dominant payment method in Australia, although alternative payment methods such as e-wallets are gaining popularity.

Australian shoppers are particularly concerned about the possibility of card fraud and payment data theft, due to the rise in recent years of card-not-present (CNP) fraud. Instances of card fraud in Australia increased 33 percent from 2013 to 2014, according to the Australian Payments Clearing Association, and more than three-quarters of Australian card fraud in 2014 was CNP fraud.

To earn the trust and business of these consumers, cross-border sellers must present their security credentials up front. Clear language detailing PCI-DSS compliance, payment-data encryption and tokenisation demonstrates commitment to protecting customer payment data.

Australian customers expect excellent customer service, and according to a recent report by SAP, nearly half of Australian online shoppers were “unsatisfied with their digital experience” with major domestic brands. This has created what SAP describes as a “digital experience gap”, and that gap is an opening for cross-border sellers who are willing to deliver the level of service Australian consumers want. That can turn into a long-term advantage, as 73 percent of the shoppers surveyed said they would stay loyal to a brand that offered a strong online experience. By delivering an optimised, secure, upscale shopping experience that caters to local tastes and payment preferences, UK and other EU merchants have the opportunity to develop a loyal customer base in Australia.

 

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