Welcome to Part 3 of our blog post series aimed at helping you plan your expansion into new markets abroad. With global e-commerce sales set to soar to $1.6 trillion this year, the opportunity is rife for online retailers looking to take their businesses global. This week we’re focusing on selling to the Australian and New Zealand e-commerce markets. Don’t worry — if you missed our posts about Germany and the US, there’s still time to catch up!
Given the similarities to the US in language and culture, the Southern Hemisphere is attractive for cross-border trade (CBT). There’s a strong and growing e-commerce base there at the moment, too, so there’s every chance your products can do well. Retail e-commerce sales in Australia are expected to rise 14.4% this year to pass $10 billion. In 2014, e-commerce sales in the country increased 17.3%, accounting for over 4% of total retail sales. Furthermore, online shoppers from Australia are the most likely to cross borders when shopping online, with 63% likely to make international purchases. Antipodeans are, it seems, keen to gain access to new and quality markets, with branded goods in particularly high demand.
Selling into Australia and New Zealand also brings with it the benefit of seasonal differences. When it’s summer here, it’s winter there. This means you can extend your season and sell your products there when you can’t sell them here. For example, there’s the option to sell end-of-season fashion to these markets without having to drop your prices.
EBay: Almost 60% of all online shoppers in Australia bought something from eBay Australia in 2013, and the site has 8 million visitors a month, making it by far the most popular Australian marketplace — and a good place to try out your international expansion. To test the market, simply specify that you’re willing to fulfill items internationally and indicate postage costs. Your items will then sometimes be shown to buyers in Australia, giving you some indication as to whether there’s an appetite for your products there. Remember that fulfillment to Australia and New Zealand will generally be more complex and expensive than in the US. It could be a good idea when starting out to list just a selected part of your inventory, focusing on smaller, lighter items with a higher net worth (making it worth your while, postage-wise).
If you want to take your expansion plans further, list directly on eBay Australia, but don’t forget language considerations. Think ‘sneakers’ versus ‘trainers’ and ‘pants’ versus ‘trousers.’ And — this one’s important — check out the listing requirements for the Australian site so you can optimise your data accordingly.
Trade Me: The best way to get in front of New Zealand’s online shoppers is to list on the country’s prime marketplace, Trade Me. The marketplace’s tagline is ‘Where Kiwis buy and sell’, and this certainly seems to be the case. The platform has 3.4 million members and over 2.6 million listings — in a country with a population of only 4.5 million. Established in 2009, Trade Me is still at a relatively early stage of growth. As a result, it’s a perfect place for e-commerce sellers to test the waters, since there are still plenty of supply gaps to fill.
To list on Trade Me, you need to be accepted as an ‘international seller’. For details on the conditions and requirements, contact email@example.com. It’s worth pointing out that Trade Me doesn’t allow for the sale of digital media, and if you’re selling DVDs or similar items, you need to make sure they’re stickered with appropriate age ratings for New Zealand. It’s also useful to know that product search results on Trade Me are largely driven by product titles (in comparison with eBay, which uses product data, performance metrics and ratings). So it’s essential to optimise your data to fit in.
Tax: The Goods and Services Tax (GST) is a 10% tax on the sale of most goods and services in Australia. Businesses registered for GST will generally include it in the price of sales to customers and will need to make payment to the Australian Taxation Office when due. At the moment, you need to register for GST if you’re turning over more than $75,000 AUD. GST is also applied to goods sold to New Zealand customers at a rate of 15% on annual turnovers of over $60,000. Within international listings, Trade Me helpfully links the buyer to the New Zealand government’s duty calculator: www.whatsmyduty.org.nz.
We hope this feature will give you a head start when it comes to planning your expansion Down Under. Don’t forget to check back next week for our next Local Insights installment!