Communications report series 2010—11 Report 1

Communications report series 2010-11Report 1—e-commerce marketplace in Australia:Online shoppingJoseph Di GregorioManagerCommunications Analysis Section

ACMA interest in the digital economy> The digital economy = economic and social activities that are enabled by information and communication technologies (ICT)—in particular the internet.> The ACMA has an interest in understanding the developing digital economy and its impacts on the sectors it regulates and consumers in general. >>

> The embedded nature of the internet in the next generation of communications technologies.> The use of digital communications to deliver and access services outside of traditional voice communications.

Key findings from this report1. Business seeking to develop online channels to complement offline shop-front services.2. Adoption of online shopping is now fairly wide spread amongst consumers.3. Australians shop online for reasons relating to convenience and price.4. Growth in numbers of Australians purchasing from overseas websites.

Provision of online shopping services> Online channels for the provision of online shopping services: > business own website > group buying sites (demand aggregation) > social networking.

Top online retail sites eBay 4,297 Amazon 1,623 Woolworths 1,359 Gumtree 905 BIG W 784 GetPrice Network 767 During June 2011, 7.6 million Shopping.com Network 737 consumers accessed the top 15 Lasoo.com.au 721 online retail sites DealsDirect.com.au 662 Catch of the Day 655 Myshopping.com.au 620 JB Hi-Fi 609 Kmart Australia 608 Ozsale.com.au 573 FlyBuys 545 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 Number of users (000s)Note: Persons accessing these sites from home during June 2011

Group buying> Offer online deals from other parties for a limited time, often one day, on selected products. > Power of bulk buying to negotiate significant discounts with retailers, receiving a commission based on the number of products sold to customers through the website.> The three major types of deals available on these sites to Australian consumers cover voucher discounts, clearance goods and travel.> 51 group buy sites operating in Australia, with the top sites in terms of industry revenue including Scoopon, Cudo, Living Social, Spreets, Groupon, OurDeal, Deals.com.au and Ouffer.

Social media> Yet to develop as a mainstream business tool in Australia. At April 2011, just 18 per cent of internet connected SMEs in Australia, used some form of social media in their business operations.> Compare this to the some 8.6 million Australian’s who visited social networking sites from home during June 2011.> Social networking more about ‘word of mouth’ and advertising than direct-transaction services. > Info on social networking sites convinced 169,000 Australians to buy a good or service during the month of June 2011.

What about the demand side?

Purchase of goods and services online in the six months toApril 2011 by age 80 73 69 % of internet users aged 18 years and over 65 62 61 60 52 40 40 20 0 Total 18–24 25–34 35–44 45–54 55–64 65 + Age group

Purchase of goods and services online in the last six months toApril 2011 by location 80 70% internet users aged 18 years and over 62 63 60 58 56 40 20 0 Total Major city Inner regional Outer regional Remote/very remote

Reasons for purchasing online 80 74 % of persons 18 years and over purchasing online 70 67 60 50 43 40 38 Nov-09 Apr-11 30 20 16 15 10 0 Convenient Cheaper Better range of goods/services

Frequency of online purchase by location in the last six months 100 13 12 13 16 19 10 % of online shoppers aged 18 years and over 10 10 80 6 16 25 26 25 25 60 16+ times 27 11–15 times 6–10 times 40 1–5 times 52 52 52 52 20 39 0 Total Major city Inner regional Outer regional Remote/very remote

Payment channels used Used neither credit card nor money transfer 9% Used credit card only, 25 Used credit cards and money transfer services , 53 Use money transfer (e.g. PayPal) only, 12

More likely to be computer based than mobile Computer Mobile Other devices% of people aged 18 years and over purchasing online 100 97 97 90 80 70 60 50 40 30 20 10 4 2 2 2 0 Jun-10 Jun-11

M-commerce more about banking than online shopping 20 Jun-10 Jun-11 19 18 % of mobile handset internet users aged 18 years and over 16 14 13 12 10 9 8 7 6 4 3 2 2 0 Purchased goods or services Paid bills Conducted banking transactions

Goods and services purchased online in the last six months Travel goods (including tickets and 60 accommodation) 56 Clothing, shoes & personal items (including 53 cosmetics) 42 53 Event, concert & movie tickets 43 46 Books, magazines & newspapers 36 Household goods (including furniture, electrical 42 appliances, computer equipment) 37 34 Apr-11 Audio or video content Nov-09 26 CDs & DVDs 25 Music (audio) 26 Communications technology (including 18 mobiles, fax, pagers, etc) 13 17 Food, groceries & alcohol 11 0 10 20 30 40 50 60 70 % of online shoppers aged 18 years and over

Where are Australian’s purchasing from? 100% of online shoppers aged 18 years and over 19 29 80 12 19 60 Australia and overseas equally Most often overseas 40 Most often Australia 68 53 20 0 Six months to November 2009 Six months to April 2011

Why overseas? 59 It’s cheaper 41 41 Not available in Australia 56 15 More variety of products 13 5 Other 8 Apr-11 3 Nov-09 Don’t know International brands are more 2 reliable/better quality 1 Shipping costs dont worry me 0 10 20 30 40 50 60 70 % of online shoppers aged 18 years and over mainly shopping on overseas websites

Summing up> The majority of Australian use the internet only a daily basis.> Australian are going online to facilitate everyday social and economic activities (convenience, time and cost saving).> Organisations are having to adapt to this growing online consumer base through innovation in online service delivery.> The growth in online transaction services will continue to be a key driver of online participation. >>

Reporting activities over the next few months:> Release of the annual ACMA Communications report 2010–11.> Release of complementary reports examining convergence and digital economy issues: > Report 1—E-commerce Marketplace in Australia: Online Shopping > Report 2—Converging communications channels: Preferences and behaviours of Australian communication users > Report 3—The emerging mobile telecommunications market in Australia. >>

The ACMA Communications report 2010–11 and relatedreports will be accessible from engage.acma.gov.au.

THANK YOUjoseph.digregorio@acma.gov.au

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Communications report series 2010—11 Report 1

by ACMA : Australian Communications and Media Authority

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