Everything You Need To Know About Ecommerce in Australia
In 2019, ecommerce in Australia hit 32 billion in spending, up 20.8% year on year. With Australians stuck at home due to Covid-19, ecommerce sales have exploded, increasing from about 7.1% of total retail sales in March to more than 11% in June.
Even before the pandemic, Australian online shopping was expected to grow rapidly this year.
So, if you’ve been thinking about selling in Australia, now is the time to take action.
In today’s post, we’ll walk you through a detailed overview of ecommerce in Australia:
- Must-know statistics about ecommerce in Australia
- Understand how Australians are shopping online
- Before you take the plunge and sell to Australia
- How Printful will help you succeed in Australia
Sounds great? It is. Let’s dive in!
Must-know statistics about ecommerce in Australia
Knowing key statistics and facts, from demographics and shopping behaviors to trends, will give you a deeper understanding of what’s going on in Australian ecommerce now, and where it’s headed. Here are some key things you should know:
- Australia is currently the 10th largest ecommerce market in the world by revenue. The ecommerce market value is at $33.1 billion, with a growth rate of 8.9% by 2021.
- Out of 5.2 million households shopping online in April 2020, more than 200,000 are new customers.
- In April 2020, online purchases grew 6.8% compared to the end of 2019.
- Online shopping is popular in major cities like Melbourne, Sydney, and Canberra. However, regional areas saw strong growth as well.
- As Australians stay home, they have more demands on entertainment, self-improvement, DIY ideas, comfortable and casual clothing (like loungewear and athleisure), and gifts to connect with loved ones.
- In 2019, Black Friday and Cyber Monday recorded the biggest number of purchases, with strong growth of over 28%.
- In 2019, health & beauty, fashion & apparel, and variety stores, were top performers with a growth rate of 21.8%, 19.1%, and 17.8%, respectively.
- 46% of Australians spent under $35 per transaction on international purchases.
Understand how Australians are shopping online
Australia celebrates cultural diversity. Since 1945, over 7.5 million people have migrated to Australia, making it one of the countries having the highest proportion of overseas-born.
Cultural diversity leads to changes in Australian consumers’ expectations. According to Adobe’s 2019 survey, 62% of Australian consumers want to purchase from brands with diverse advertisements. They are demanding personalized, and authentic advertising, experiences and engagement.
Understanding Australia’s cultural diversity helps you develop an effective product strategy from the beginning. Your products should exist in a consumer space with people from various backgrounds, or you can select a specific customer segment and focus on fulfilling that niche.
Below are some other online shopping behavior characteristics of Australian consumers you should know:
- The 2019 report conducted by JPMorgan found that most online shoppers in Australia buy overseas, and cross-border ecommerce generates more sales than domestic retail trade. China, the US, and Japan are all popular digital shopping destinations for local shoppers. It’s time to sell to Australia!
- Australian online consumers now expect faster delivery service and increased flexibility in fulfillment options. For fashion and apparel shoppers, delivery speed is what they care about most, with next-day shipments growing in demand by 31.7% in 2019.
- PayPal is still the most common online payment method, but Buy Now Pay Later solutions increase rapidly, especially among Australian millennials. According to KPMG, approximately 27% of young Australians now have an Afterpay account.
- Australians are more likely to be shopping online later in the day, between 2–5 p.m. (21%) and 7–10 p.m. (32%). However, online shopping transactions are recently carried out at any time in the day.
- Australian consumers have become more socially and environmentally conscious. Research by Australia Post showed that 49% of ecommerce shoppers would choose to buy products from businesses that support environmental causes.
- Young Australian customers trust reviews, word of mouth, and celebrity endorsement more than older customers. Older customers avoid providing sensitive personal information and only want a transactional relationship with ecommerce stores.
- In the past, Australians weren’t big fans of Halloween, but now they’ve changed. Halloween has been growing in Australia, and the locals increasingly spend more on this holiday. They dress up as monsters and witches and decorate their homes to celebrate the spooky holiday.
- Australians enjoy mobile-friendly shopping experiences, whether it’s on app-based or web-based stores.
- Australians’ spending patterns have changed due to Covid-19. They spend less on discretionary products (e.g., leisure, entertainment, cafes, and personal care) and are more willing to buy products that support sustainability and local economy.
Before you take the plunge and sell to Australia…
Up to this point, you may get excited to start your ecommerce store in Australia. However, there are 5 more things you should know when selling to this country.
1. Top Australian marketplaces
Online marketplaces like eBay, Amazon, Gumtree, MyDeal, or Catch continue to attract Australian shoppers, offering seamless, one-stop-shop experiences. In 2019, among the top 100 shopping sites in Australia, traffic going to online marketplace sites accounted for 58.3%. eBay is the largest online selling site, followed by Amazon and Wish.
Australian English is the official language of Australia, taking features from both British and American English. However, it has many unique features, including unique pronunciation and exclusive vocabulary. Read this guide to discover more about Australian English.
Understanding the differences in Australian English is very important because Australians typically prefer using their own varieties.
The best practice is to go to Fiverr and hire a local to read through your materials before your store goes live.
3. Logistics, delivery, and shipping
The Australian infrastructure is well-developed, with an innovative network of logistic centers. It has a lot of delivery service providers that ship online orders around the country. Some of them include Couriers Please, DHL, UPS, and FedEx, but Australia Post is the biggest of all (75% of the market share for direct-to-consumer deliveries).
Australia Post offers many delivery options for parcels of all sizes. During the peak of Covid-19, this delivery generated up to $2.4 billion in ecommerce compared to the same time last year. Plus, more than half of Australian online shoppers prefer to return their international purchases at Australia Post.
Dene Green, Managing Director at Asendia Oceania, emphasized that “Flexible delivery options are a growing demand among international consumers, and Australian customers are not an exception. There should be a particular focus on same- and next-day deliveries and hassle-free returns.” Take this into consideration when developing your shipping and return policy for Australian consumers.
4. GST tax and ABN
In Australia, most goods and services are charged with a 10% Goods and Services Tax (GST). That’s why you should consider GST tax when selling to this country. Luckily, the Australian tax system is a bit simpler than it’s in the US.
Here’s some crucial information:
- GST applies to both online and offline retail sales of low-value goods ($1,000 or less) that have been imported to Australia and sold to consumers.
- If imported products have a value of more than AUD $1,000, the importer will be required to pay duty, GST, and possibly other taxes and charges.
- If you sell to Australia and generate $75,000 or more in sales, you must charge GST even for low-value products you sell. In this case, whether you’re an Australian resident or a foreigner, you need to register for GST in Australia and collect it.
For more details about tax on retail sales of goods and services into Australia, read the official guide from the Australian Taxation Office.
Regarding ABN (Australian Business Number), it’s a unique 11 digit number that identifies your business to the government and community. You might want to consider registering for ABN—this will help you obtain an Australian domain name (.com.au, .au, or .net.au) and easily gain trust from local consumers
Apply for an ABN online—it’s easy and free of charge.
5. Prohibited imported items
Regardless of size, weight, quantity, or cost, anything that comes into Australia from an overseas location is an imported item. As an ecommerce merchant, you should understand which products you can and can’t import to this country. For a full list of prohibited imported items, check out the Australian Border Force website.
Note that to sell in Australia, you must also comply with the Australian Consumer Law established to protect Australian consumers.
Now that you know the ins and outs of ecommerce in Australia. Let’s dive into print-on-demand drop shipping!
Why use print-on-demand drop shipping?
Print-on-demand (POD) drop shipping allows you to create and sell your custom designs on products printed by print on demand services directly to customers. It’s a great business model for designers, artists, and creatives who are looking to start their own merchandise or a side hustle.
Here’s what POD dropshipping gets you:
- Low investments. No need for equipment or storage fees, as the dropshipping companies handle everything for you.
- No need for background knowledge or experience.
- No boss means no bureaucracy (you’re the boss of yourself).
- No hassle with fulfillment and shipping means you can focus 100% on promoting your business.
- Endless possibilities to expand your product collection.
- No limits on your profit. Whatever the income amount is, it’s all yours.
How Printful will help you succeed in drop shipping to Australia
Choosing the right fulfillment service has a massive impact on your business’ growth. But with many options out there, it might be challenging to pick the one that fits your goal and help you succeed in Australia.
Let’s look at how Printful makes it easier for you to sell in this country.
Diverse products to sell
Printful collaborates with 2 facilities in Australia: one in Brisbane that helps with direct-to-garment (DTG) product fulfillment, and another in Victoria that handles non-apparel orders.
At the moment, a selection of DTG products is available for fulfillment in Australia, including the best-selling Bella + Canvas, Gildan, Anvil, and American Apparel t-shirt, with more products on the way! As for non-apparel products, here’s what we currently fulfill in Australia:
- Canvas (due to strict Australian import laws, we couldn’t ship these products before),
- White Glossy Mug,
- Matte Black Magic Mug,
- Enhanced Matte Paper Poster,
- Premium Luster Photo Paper Poster,
- Enhanced Matte Paper Framed Poster,
- Premium Luster Photo Paper Framed Poster.
Thanks to the partnership between Printful and Australia Post, you can now enjoy an improved and simplified local delivery experience. Your orders will be shipped to Australia and New Zealand quickly, conveniently, and economically. You’ll be able to:
- Reduce shipping time for local customers from 15 to 2–5 business days.
- Cut down duty taxes to Australia and lower your shipping costs.
Selling with us, you’ll enjoy a superb customer experience and no longer have to be worried about the complexities of fulfillment.
All you need to do is to create your products and publish them to your store. Then, when a customer from Australia buys your product, we’ll handle everything else.
We’ll take care of the fulfillment and shipping so that you could focus on more exciting parts of running a business: product design, promoting your store, and building long-lasting relationships with local customers.
Price at local currency
Ask yourself, would your Australia-based customers appreciate buying from a store that only bills in Euros? Probably not.
Here’s a rule of thumb: When you’re running a cross-border business, everything about your products/services, including product descriptions, marketing materials, and pricing should be localized to suit the local needs.
ProfitWell put it best:
Localizing your pricing comes in two flavors: 1. Cosmetic changes where you simply convert your price to the local currency, and 2. True localization where you actually charge differently in different markets.
If you sell to Australia but set prices for your products in US dollars, you make the AUD price more expensive for customers. The high chance is that they’ll leave your store and switch to another.
To help you localize your price, we launched AUD currency. This makes it easier for you to approach Australians and New Zealanders and eliminate exchange fees.
Start selling in Australia with Printful!
With Printful, building an online business in Australia is easier than ever. You’ll be provided with:
- Bestselling print-on-demand products selected specifically for the Australian market.
- A simple payment system that allows your Australian customers to pay with their preferred currency.
- Local fulfillment and delivery services that print and ship your products to customers within a few days.
It’s time to start selling in Australia! Don’t forget to share your journey with us in the comment section below.