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Australian eCommerce Market 2010

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Breakfast briefing presentation by senior research manager Phil Harpur on Australia's consumer eCommerce spending. Sydney, 23 June 2010.

Breakfast briefing presentation by senior research manager Phil Harpur on Australia's consumer eCommerce spending. Sydney, 23 June 2010.

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  • 1. Breakfast Briefing eCommerce in Australia Research Insights and Analysis 23 June 2010 Phil Harpur, Senior Research Manager, Digital Media ANZ Sponsored by: 1
  • 2. Frost & Sullivan eCommerce Study – Key Deliverables  1. Consumer survey - 1000 Australian online shoppers  Deep dive analysis - five product categories.  Electronics (TV, Home Theatre, Audio, Cameras & Mobile Phones)  Computers (Hardware, Software, Peripherals & Accessories)  Books CDs/ DVDs  Jewellery + Fashion Accessories  Clothing & footwear 2. In-depth interviews – of local etailers.  Full report to be released in early July 2
  • 3. Australian consumer eCommerce landscape  Australia lags US & UK markets significantly.  Aus online is 3% of total retail sales (domestic) vs. 5%+ in both US and UK  (physical goods only, excludes travel, accommodation, tickets, financial service products)  40% of online expenditure in Australia is to overseas sites 3
  • 4. Inhibitors to growth and global threats  Key inhibitors include:  strong local physical store presence;  Lack of competition in postal / delivery services.  Global threats include:  Overseas websites targeting local consumers;  Marketplaces and tools powering other retailers.  Lack of presence by large retail chains - needed to kick-start market 4
  • 5. Drivers of online purchasing Most important reason for purchasing online Cheaper prices 39% Convenience of shopping from home 29% More comprehensive range of goods 17% Easier to locate product I am looking for 12% Other 2% 0% 10% 20% 30% 40% 50% Source: Frost & Sullivan, eCommerce Consumer Survey, 2010 5
  • 6. Future spending intentions Intention to spend more/less over next 12 months More 21% Less 16% About the same 62% 0% 10% 20% 30% 40% 50% 60% 70% Source: Frost & Sullivan, eCommerce Consumer Survey, 2010 6
  • 7. Percentage of overseas purchases Percentage of goods purchased from overseas websites Less than 10% 56% 10% to 25% 13% >25% to 50% 13% >50% to 75% 7% >75% 11% 0% 10% 20% 30% 40% 50% 60% Source: Frost & Sullivan, eCommerce Consumer Survey, 2010 7
  • 8. Drivers of overseas purchases Main reason for purchasing from overseas websites Cheaper goods 44% Wider variety of goods 24% Higher level of trust 2% Purchasing for someone located overseas 1% Other 2% I dont purchase from overseas e- Commerce stores 27% 0% 10% 20% 30% 40% 50% Source: Frost & Sullivan, eCommerce Consumer Survey, 2010 8
  • 9. Most Popular Websites in Shopping and Classifieds  eBay is by far the most Most Popular Websites in Shopping and Classifieds ranked by Visits - Month of May, 2010 popular shopping site All Sites (incl. International) Rank Websites Domain Visits 1 eBay Australia www.ebay.com.au 27.12%  eBay Australia dominates but 2 eBay www.ebay.com 3.47% 3 Amazon.com www.amazon.com 1.98% some are shopping on eBay 4 Trading Post Online www.tradingpost.com.au 1.13% internationally 5 hp www.hp.com 0.89% 6 Ticketek.com www.ticketek.com.au 0.84% 7 Apple (Australia) www.apple.com/au 0.82% 8 eBay Motors Australia cars.ebay.com.au 0.76%  No Australian retail chains are 9 Gumtree Sydney sydney.gumtree.com.au 0.67% 10 Rewards Central www.rewardscentral.com.au 0.67% in the top 10 Source: Experian Hitwise, May 2010 9
  • 10. Forecasts, challenges and growth opportunities  Aus market predicted to grow from $12 billion in 2010 to $18 billion by 2014  Opportunities with differentiation in product or business model  Clothing, footwear, jewellery and accessories- strong growth will continue  Commodity items lacking differentiation – slower growth 2010 per capita eCommerce spend ($US)  Strategies for Multi-channel players: 700 587 600  in-store pick-up; 459 491 500 400  after sales service / exchanges; 300  click-to-chat; 200 100  flexible payment options. 0 AUS US UK 10
  • 11. Time of week spent shopping online Time of the week spent most time shopping for online 23% Both about the same 19% 58% Weekends Weekdays Source: Frost & Sullivan, eCommerce Consumer Survey, 2010 11
  • 12. Method used for Internet Purchases Payment method used to make most Internet purchases in prior 12 months PayPal 42% Credit card (via Internet) 35% Debit Card (via Internet) 15% Bank / Money transfer 6% Credit / debit card (at point of delivery) 2% Other (please specify) 1% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Source: Frost & Sullivan, eCommerce Consumer Survey, 2010 12
  • 13. Pre-purchase considerations Sites typically visited before making a purchasing decision Search engine 64% Product review site 59% Price comparison website 57% Online directory 7% Vertical speciality site / portal 7% Other 6% None 5% 0% 10% 20% 30% 40% 50% 60% 70% Source: Frost & Sullivan, eCommerce Consumer Survey, 2010 13
  • 14. Impact of online advertising Have you purchased online after clicking on an ad in the last 12 months? 25% Yes 75% No Source: Frost & Sullivan, eCommerce Consumer Survey, 2010 14
  • 15. Negative online shopping experiences Negative online shopping experiences in the last 12 months The item arrived too late. 18% Difficulty contacting store for query/problem. 15% Had difficulty finding what I was looking for. 14% Merchandise was different than represented. 12% Never got the item I ordered. 6% Credit card / debit card number was stolen. 2.5% None 55% 0% 20% 40% 60% Source: Frost & Sullivan, eCommerce Consumer Survey, 2010 15
  • 16. In Conclusion….. • Aus market will grow from $12 billion to $18 billion by 2014 • Significant lag behind US and UK markets • Lack of presence by large retail chains - needed to kick- start market • Opportunities with differentiation in product or business model 16