Aussie SME e-commerce growing, but slowly

Retailers lag behind other industries in their use of online customer ordering

Despite signs that Australian businesses are making use of the online sales channel, retailers continue to lag behind other local industries.

Detailing the state of the Australian e-commerce marketplace in a recent report, the Australian Communications and Media Authority (ACMA) said that as at April 2011, the number of small and medium business which took orders online had grown just one per cent to 59 per cent between April 2010 and April 2011.

Of these SMEs, the industry with the highest percentage of online orders was wholesale trade (76 per cent), followed my manufacturing (72 per cent) and transport/storage (70), hospitality (62), and retailers (59 per cent).

Despite the relatively healthy numbers of retailers taking online orders, the frequency of use is low. For the month of June 2011, eBay had 4297 Australian users and Amazon 1623 users, however, Woolworths pulled in just 1359 users, JB Hi-Fi 609 and Kmart 608.

In part these results are due to the mix of good purchased online by Australians. Food, groceries and alcohol account for just 18 per cent of online sales as at May 2011, and clothes, sporting equipment and toys account for 12 per cent.

Software and apps account for 12 per cent of sales and computer and electrical goods account for 19 per cent of sales.

In comparison to established bricks and mortar retailers, smaller online-only group buying sites such as Lasoo, DealsDirect, and Catch of the Day all made the top 15 online shopping sites for the month of June 2011.

“While the Australian group buying scene has been dominated by overseas players to date, many Australian companies have now built strong brands and found a niche market,” the report reads.

“There are varying estimates on the value of group buying in Australia but one estimate puts the value of the online group buying and daily discount sector at $377 million in 2010–11, making it the fastest growing retail platform in Australia."

According to the report voucher discounts, clearance goods and travel categories dominate the group buying deals available from the 51 group buying sites operating in Australia.

Commenting on the role of social media in driving online sales the report argues that tools such as Twitter and Facebook have yet to develop as mainstream business tools despite 8.6 million Australians visiting social media sites as at June 2011.

“Social media services such as networking sites don’t generally provide direct transaction services. Instead, they seek to advertise services directly or through ‘word of mouth’ among the social networking community,” the site reads.

The report argues the influence social media channels in shaping consumer purchasing decisions is still small with just one per cent of the population estimated to have purchased a good or service as a result of advice from a social networking site during June 20011.

“However, 51 per cent of SMEs using social media for business purposes reported a positive effect from social media, including increased networking opportunities, good advertising for the business and good customer feedback,” the report reads.

This month Google argued that Australian retailers’ lack of mobile website usage was resulting in the industry missing out on a golden opportunity.

Booktopia also announced itself as the latest bookseller to bring Google e-books to Australia, following the announcement from Aussie book retailer Dymocks that it would be adding the digital repository to its online business.

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Tags ACMAonline retail

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