Digitising Down Under: Why UK Retailers Should Sell to Australia and New Zealand

14 June, 2018

Marketplaces By Laura Lane

With news that UK e-commerce sales growth will continue to slow down in 2018 amidst uncertainty over Brexit and challenging trading conditions, the answer for many retailers is to look a little (well actually, a lot!) further afield. In past years, Australia has become an increasingly attractive market for those wanting to take their brand global. With a strong economy, cultural parities and tastes to the UK and no pesky language barriers, Australia truly is a land of opportunity.   

In our latest white paper with Retail Week Connect we explore what’s going on Down Under and why now is the time for retailers to take advantage, in this teaser we’ll uncover three key reasons why Australia and New Zealand should be front of mind for any retailers looking to grow their revenue and market share.

What’s the opportunity?

Did you know Australia has the most generous minimum wage in the world at AUS$18.29 (£10.05) per hour? Nope, us neither! Currently, online sales are growing at more than 30% a year, with Australians spending a total of $1.95 billion per month on online shopping alone. Furthermore, Australian consumers are tech savvy, in fact they have the highest adoption of smartphones in the world!

And it’s not just Australia to consider. New Zealand represents an exciting opportunity for retailers. Online retail is growing rapidly in New Zealand, with recent figures estimating that online sales rose 11% in 2017. Annual online spend is estimated at NZ$4.2bn, or 7.6% of total retail sales, and the scale of the opportunity is evidenced by the fact that 44% of annual online spend in 2017 was with offshore sellers.

Sounds good right?!

Risk-Free Route to Market

When considering entering a new market, a smart solution can be to take advantage of popular marketplaces in that region. Woolworths Australasia’s Chief Digital Officer John Bovill describes them as a “risk free” way to reach a large customer base. So what’s the actual opportunity?

Much like in our domestic market, marketplaces are a popular shopping channel for shoppers Down Under. Ebay, the market leader, is estimated to make up almost 5% of Australia’s total retail sales and, despite its roots as an online auction house, 91% of what is bought on the site is new.

In fact, many of the UK’s most well known household brands like Boohoo, Sports Direct and Superdry already sell on eBay Australia.Meanwhile, New Zealand’s biggest marketplace, Trade Me, has 3.9 million active users – which is a huge 83% of the 4.7 million population.

Maximising Marketplaces

So what are the options for retailers considering tapping into this buoyant new market?

  • eBay
    Launched 1999
    Why eBay? It is the biggest shopping site in Australia with 11 million unique visitors every month. International retailers on board include Boohoo, Sports Direct and Superdry.
  • Amazon
    Launched 2017
    Why Amazon? Pre-launch, Amazon’s US website was Australia’s second biggest shopping website. Big things are expected of the Australian site and retailers are advised to start selling on it early. International retailers on board include French Connection, Michael Kors, Calvin Klein and Levi’s. It has launched Fulfilment by Amazon and is expected to roll out Prime in mid 2018.
  • Catch
    Launched June 2017 (Previously known as Catch of the Day, it rebranded as Catch and relaunched in June 2017)
    Why Catch? Catch Group chief executive Nati Harpaz says that brands “won’t get lost” on its marketplace, which stocks fewer products than rivals Amazon and eBay.

And this is just the tip of the iceberg. It’s clear that Australia and New Zealand represent a huge opportunity for retailers looking to develop into new markets. Their healthy economy and the low barriers to entry mean this is a must consideration for UK retailers.

If you want to know more about how to grow down under, take a Captain Cook* at our latest report with Retail Week Connect uncovering how to win over this market.

*Google it!

Comments are closed.