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The Product Data Lab

Amazon, eBay and Alibaba Dominate eCommerce Down Under

The ecommerce industry is thriving in Australia and marketplaces such as Amazon, eBay and Alibaba lead the way with a 74.8% growth in 2017. That’s on top of the 18.7% growth of the ecommerce industry.

Australia Post’s Inside Australian Online Shopping 2018 sheds a light on what’s happening within Australia’s retail market:

 

“Shoppers demand a frictionless end-to-end shopping experience, with easy access across all devices, simple payment options and convenience across all touch points. They also expect flexibility in delivery timeframes and collection locations.” - Ben Franzi, General Manager, eCommerce & International

 

The Rise of Online Shopping

There are a few reasons for this growth:

  • Access to brick and mortar stores is a common problem for many Aussies who live in rural, outback settlements. 
  • Shopping online is easy and quick; fuel money is saved and consumers can shop right from the comfort of their bed.
  • Shopping online is cheaper. Variety, the ability to compare between products and marketplace prices shifts the power more so to the consumer.
  • Other pet hates such as delivery cost and time are being resolved by retailers and marketplaces creating collection locations and in-store collections.
  • The imminent launch of eBay Plus and Amazon Prime will, at a fixed annual cost, help shoppers with the price of delivery and shipping.

 

Marketplace Growth

$21.3 billion was spent online last year and Franzi expects spending to reach $25 billion in 2018 and $35 billion in 2020/21. The following marketplaces are driving this spend:

  • eBay

Marketplace giant, eBay, dominates 25% of Australia’s entire ecommerce market. With eBay Plus’s launch in mid-June, brick and mortar is facing an upheaval, already seen in countries like the US and the UK.

  • Amazon

After the launch of the marketplace behemoth in Australia in December last year, Amazon AU reached 10,000 sellers in just a matter of monthsIn just the first 24 hours of launching, tens of thousands visited the website and placed orders across all 23 categories according to Country Manager of Amazon AU, Rocco Braeuniger. Amazon Prime, when launched, will provide consumers with free delivery and other benefits. 

  • Alibaba and China's Market

Chinese marketplaces such as Alibaba's Tmall, JD.com and Aliexpress, Alibaba's marketplace for consumers outside of China, is booming within Australia with "international outbound out of China is growing well over 40 per cent," according to Franzi.

 

The Daigou Business Model

Chinese consumers are beginning to want Australia's products, which is how the Daigou business model evolved. Neilsen describes a 'Daigou' as:

"a person who enables an export and e-commerce ecosystem through purchasing commodities such as luxury goods and grocery items for a customer in mainland China."

The trend is specifically prevalant in Australia.

Australia Post recently opened a 'box store' in the suburbs of Sydney with the direct purpose of reaching and shipping solely to consumers in China.

Australia is a hub for developing and thriving ecommerce success which is only predicted to rise. Marketplaces, at the centre of this progression, are leading with a disruptive influence.

One thing is clear: Australians love to shop online and as retailers and marketplaces continue to fix common issues such as delivery time and cost, online shopping will begin to grow within Australia's retail industry.

 

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