UKTI Australia, e-commerce webinar, 20 feb 2013


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Richard Harper, UKTI Trade Manager, Australia gives British companies tips on successfully selling to Australians online

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UKTI Australia, e-commerce webinar, 20 feb 2013

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  2. 2. An Overview of Australia: Facts and Figures • Australia is an island continent and the worlds sixth largest country (7,682,300 sq km) – the country is approximately 4,000 km from east to west and 3,200 km from north to south. – 40 % of the total coastline length comprises island coastlines with a coastline 36,735 km long. – 20 % desertSelling To Australia Online Feb 12 2
  3. 3. An Overview of Australia: Facts and Figures • Australia has six states: New South Wales, Queensland, South Australia, Tasmania, Victoria, and Western Australia; and two major mainland territories: the Northern Territory and the Australian Capital Territory (ACT) which are self- governing territories with powers almost matching those of the states.Selling To Australia Online Feb 12 3
  4. 4. An Overview of Australia: Facts and Figures • Australias estimated resident population (ERP) at 30 December 2012 was 22.3 million. The most populous states are New South Wales and Victoria, with their respective capitals, Sydney and Melbourne, the largest cities in Australia.Selling To Australia Online Feb 12 4
  5. 5. 15.6 million 22.5 million Australians internet users In the twelve months to November 2012, Australians spent around $12.6 billion on online retail.Selling To Australia Online Feb 12 5
  6. 6. Drivers behind online shopping Drivers behind online shopping UNCLASSIFIED 6
  7. 7. Purchases made in the 12 months to July 2012 Online Auctions, Department Home, Furniture, Stores, Fashion, Cosmetics, Appliances, Electronics Variety Stores Recreation, Groceries, Liquor & Toys, Games & Hobbies, Specialised Food Music, Movies, BooksType your title and date here 00/00/0000 7
  8. 8. Drivers behind choosing from Australian websites • “The desire to support local industry” or “no need to buy from overseas”’—30%. • “I don’t trust overseas websites”—21%. • “Item only sold or available in Australia”—18%. • “Easier to return if I have a problem”—16%. • “Takes too long to ship from overseas”—12%. • “It’s cheaper after taking shipping costs into account”—8%. • “It’s cheaper”—6%.Selling To Australia Online Feb 12 8
  9. 9. Overseas providers preferred for product such as:- CosmeticsOutdoor equipment Beauty productsSporting equipment Media Books Fashion
  10. 10. Retail categories with the strongest growthpotential 2013- 2019Clothing Footwear Jewellery Fashion accessories
  11. 11. UK Exporters and the Internet 11
  12. 12. Familiarity with UK brands • There are some 1,1101,100 British born people in Australia, representing 21% of all overseas-born migrants (2011 Census) And- around 950,000 To Australia Online Feb 12 Selling Australians visit the UK each year! •Many of those ‘UK Born’ and Australian visitors are very familiar with UK brands and, together with UK residents, make a sizeable pool of consumers who are at least aware of UK brands. •But…it is an axiom of Australian retailing that you need to “sell to Australians” to achieve good volume!Selling To Australia Online Feb 12 12
  13. 13. Selling To Australia Online Adapting to Serve the Australian E-marketSelling To Australia Online Feb 12 13
  14. 14. Adapting the way you operate • Current legislation allows imports to individuals worth less than $A1,000 in value to enter the country exempt of GST. • Whilst this GST exemption is significant, it is not as considerable as the distributor and retailer margins that can easily double and maybe triple the landed cost of a product. • Many companies are using this model and even some large high street retailers who have built a good e-business in the UK are finding they are passively exporting to Australia. • Companies offering free or reduced cost freight will have a huge advantage over their competition. • Companies that ‘internationalise’ their websites increase dramatically their chances of obtaining overseas business.Selling To Australia Online Feb 12 14
  15. 15. Fulfilment houses • One solution for companies with the market demand to make the equation viable, is to ship into Australia, pay the GST, and use the services of a fulfilment house to distribute product orders on the UK home website. • Fulfilment, also known as order fulfilment or product fulfilment, is the process whereby a person or company fulfils their obligations to send a person an item or product that the person has ordered, purchased, or requested from the organisation. • Note that it is rare for a fulfilment company to provide its own courier services.Selling To Australia Online Feb 12 15
  16. 16. Advantages • Fulfilment companies will typically have thousands of available square footage for storage. Own inventory warehousing or use of a local distributor will incur additional expenses such as utilities. A fulfilment company is able to distribute this expense through storage fees they charge to multiple clients. • A manufacturer will be unlikely get the beneficial ‘bulk’ shipping rates available to many fulfilment companies.Selling To Australia Online Feb 12 16
  17. 17. Disadvantages • Disadvantages include indirect control. • Fulfilment companies will typically not take full responsibility for product damage, nor will they take full responsibility for product shrinkage. • Some fulfilment houses have a requirement for a minimum number of orders in a particular time period. • The most important thing to realise is that fulfilment companies are not there to represent a UK company.Selling To Australia Online 04/10/2012 17
  18. 18. Adapting your website (continued) • If a UK firm includes an order form on its web site, then the form should be created in such a way as to be compatible with international addresses, titles, surnames, telephone numbers, postal/zip codes, etc. • Australia uses the metric system. • While credit cards may be popular in Australia for online payment purposes, other secure payment systems, such as Pay-Pal are becoming increasingly popular. • Paying unnecessary taxes irritates Australians just as much as it does anyone else.Selling To Australia Online 04/10/2012 18
  19. 19. Adapting your website (continued) • International firms need to ensure that any enquiries they receive are answered and dealt with as quickly as possible. • Web sites not kept up to date will lose business. • In Australia, seasons are reversed, but festivals are held at the same time. • Time difference: East coast Australia ranges from 9-11 hours ahead of the UK, depending on the time of year.Selling To Australia Online 04/10/2012 19
  20. 20. Some local factors • A UK company does not need to have an Australian Business Number to sell products in Australia. • Australian domain names cannot be reserved. A company must register its business to operate in Australia and then will have an Australian Company Number. • Goods and Services Tax (GST), at a rate of 10%, applies to most imported goods over a A$1,000 threshold. • Subject to eligibility criteria, importers who are registered for GST might be able to defer the payment on imported goods by participating in the Deferred GST Scheme.Selling To Australia Online Feb 12 20
  21. 21. How can UKTI help? OMIS service: • Industry specific sector report. • In-depth report with a bespoke section tailored to a specific sector with contacts in core areas. • Product Launch. • Commercial publicity.Selling To Australia Online Feb 12 21
  22. 22. Sector Report • A copy of a detailed sector report going into the contents of this presentation in much further depth may be purchased from UKTI at a cost of £975.00. This will provide a background that will allow you to make a reasoned and logical analysis of opportunities and the realistic potential for your product in Australia.Selling To Australia Online Feb 12 22
  23. 23. UKTI Australia Contact details • Richard Harper Senior Trade Development Manager (Food and Drink, Security, Education) • Joanna Olivera Trade Development Manager (Creative Industries, Fashion, Giftware & Homewares) To Australia Online Feb 12 23
  24. 24. Thank you • Next Presenter: Ned Shelton Founder and Managing Director Starting in Australia Pty LtdSelling To Australia Online Feb 12 24