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eCommerce in Australia: How Small Retailers Can Leverage This Market

How foreign companies can start an ecommerce in Australia

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eCommerce has become the preferred way of conducting business across the globe. It allows many industries like finance, retail, and communication to expand their market base quickly. It is also emerging as a potential channel for small retailers to collaborate and access a foreign market. In this article, we’ll discuss the rise in eCommerce in Australia and the business opportunities available to small retailers.

e-Commerce in Australia: An Overview

In the early 2000s, the world witnessed a tremendous increase in digital marketplaces. New business models rose with the rise in Internet usage and the ease of connecting with the world digitally. eCommerce has also given birth to several leading businesses across the world, such as Amazon and eBay. Ecommerce in Australia comprises essential online stores, multi-seller marketplaces, online auction stores, and other such platforms. The sector has been successful in attracting a significant number of Australian customers over the past decades.

The first generation eCommerce businesses in Australia changed the way consumers searched for products/services and shopped. eCommerce businesses presented customers with more purchasing options and a convenient shopping experience. Over the years, eCommerce in Australia has grown in size, converting more than 50% of the population to digital buyers.

The eCommerce sales across the globe are predicted to rise to USD 4.5 trillion by 2021. Keeping up with this pace, Australia is also running parallel to eCommerce hubs like China, the UK, and the USA. Ecommerce sales in Australia rank in 10th position globally. This makes it a viable option for new entities to emerge and leverage its profitable market.

The primary factors that have driven eCommerce growth in Australia are the reduced overhead costs and ease of shopping inherent to a digital business model. Also, affordable logistics and fast deliveries have bolstered this growth graph, which is set to go upwards for several more years.

For instance, retail mega player Amazon is also planning to expand its eCommerce activities in Australia. The eCommerce giant is also planning to set up a warehouse in Sydney and Melbourne to increase its local access in the Australian market.

Ecommerce in Australia: Opportunities for Small Retailers

Ecommerce is a sustainable and profitable market not just for large eCommerce marketplaces. It is also a goldmine for smaller retailers and new businesses. The various opportunities available to small retailer in the Australian eCommerce sector are:

  1. Access to a large market of individuals through better connectivity.
  2. Lower operational costs as compared to running a brick-and-mortar store.
  3. Ability to provide prompt customer services, thereby retaining a large customer base.
  4. Global reach to buyers who reside in the different corners of the world.
  5. Ability to effectively manage your product information and inform customers about new products or services.
  6. Lower cost relating to advertisement and branding since marketing is primarily done via digital promotions.
  7. Retention of customers’ loyalty with faster delivery of goods.
  8. Increased sales and revenue with 24*7 connectivity.

Problems Associated with an Ecommerce Business

While there are assorted opportunities in the eCommerce sector, there are numerous issues that a small retailer may face while operating an eCommerce business:

Difficulty in Assessing the Global Demand

The demand of customers from one country may differ from the products or services demanded by the customers in another. This makes it difficult for a business to identify which products it should sell on its eCommerce platforms to meet the global demand.

High Rate of Product Return and Refund

An eCommerce business often struggles with maintaining profitable operations due to the high costs associated with international returns and refunds. A business also suffers heavy losses due to damage to returned products, shipment damage, etc. 

High Logistics Costs

When a business is delivering to international customers, it may face heavy costs associated with logistics and shipping, whether it’s an FMCG ecommerce platform or a clothing retailer. This may prevent small retailers from setting up their eCommerce business due to the operational costs associated with it.

Warehouse and Storage Issues

Many online platforms purchase products wholesale from local manufacturers or distributors. However, many small issues may face problems with the warehouse and storage management in a foreign country. 

Unfortunately, due in part to e-commerce’s low barrier to entry, product manufacturers and retailers start selling directly to consumers.

Ecommerce in Australia: How PEOs Help Small Retailers to Leverage this Market

PEOs can help businesses to harness the myriad of opportunities in local and global markets in the following ways:

Access to a Larger eCommerce Market

More consumers now look for ease of shopping and variety in purchasing options when they shop online. With a PEO, small retailers can engage with customers in a foreign market more personally. They can also extend more customized services as per the foreign country’s demands. Associating with a PEO allows a small retailer to gain loyalty and customer retention in the overseas market.

Customized Solutions

Australians are looking for personalized assistance for a more hassle-free and on-the-go shopping experience. With a PEO, businesses get access to the local market’s information and easily capture a large market base. A PEO can conduct a market study on behalf of the business and suggest the right solutions that it can offer to the market. Foreign entities and small businesses can, therefore, leverage the massive sales opportunities in Australia’s fast-growing eCommerce sector.

Speedier Services

The Australian eCommerce shoppers also look for speedier services and instantaneous purchase turnaround. A PEO can help a small business to establish its presence in the Australian market by hiring local employees. Small businesses can thereby offer quicker order shipments and delivery cycles to attract customers. While many eCommerce giants offer prompt deliveries, the end consumer experience is often negative. The demand for more protected and safe logistics is substantial. PEOs can help a small retailer to offer faster yet more secure services by helping it establish local presence and associations with local vendors.

Access to Local Products

Consumers are increasingly asking for locally grown or produced products. Large eCommerce entities lack these features, allowing small local retailers to have more room. With a PEO, small retailers can access local products available in the market and offer them to a larger digital base.

Ethical Practices

Australians are becoming more conscious of the social and environmental impacts of their purchases. There has been a major shift in their preference to buy from more ethical enterprises instead of multinational corporates. It is because customers are becoming more mindful of the unethical labor practices and environmental damage caused by high-end businesses. This growing awareness and demand for a more transparent give small retailers opportunities to attract consumers by ensuring fair practices and ethics in their operations. 

A PEO can suggest the right measures to the eCommerce business to help it stay compliant with Australian labor laws, environmental norms, and ethical practices. A PEO can also help the eCommerce business to comply with the legal and regulatory norms, ensuring that the business does not violate any local regulations while running their platform.

How PEOs Can Help Small Businesses

Global PEOs like NHGP can provide small retailers with the right insights in the foreign market, such as the eCommerce market in Australia. We act as the employment partners & PEO of our clients and help them find the right business opportunities and talent for their growth needs.

With us, small business owners and startups can find out the right products and services for the Australian market and set up their eCommerce base in its growing online sector.

We can help you find the right local partners and employees in Australia to assess the market needs and develop your eCommerce business as per the local needs. NHGP also provides end-to-end assistance for the recruitment and management of local employees.

We can also help you develop airtight HR policies, procedures, and manuals that comply with Australian laws, HR regulations, and tax policies.  Our experts can also help you with your payroll management, employee benefits management, insurance, leave management, reimbursements, and much more.

NHGP can also help you with the local requirements associated with setting up an online business in Australia. Contact us today to find the right business opportunities in eCommerce in Australia.

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