For brands and retailers whose primary language is English, Australia offers a way to bypass some of the cultural adaptation and language barriers faced when becoming an international business. But before jumping into this fast-growing market, there are some important considerations and risks for cross border e-commerce retailers. That’s why Flow’s cross border e-commerce experts created our free new ebook, “APAC’s Major Contender: How to Sell in Australia.”
Gateway to APAC consumers
Australia is a unique market that stands out to international brands and retailers for several reasons. Australian shoppers are the second-most likely in the world to make e-commerce purchase from cross border merchants. Retailers based in the U.K., China, and the U.S. enjoy the most success with cross border e-commerce in Australia. Brands and retailers with the goal of gaining a presence in APAC would do well to launch an e-commerce store here as an introduction to consumers in this region.
Online marketplace explosion
Online marketplaces are a major trend in Australia. eBay, Amazon and Tmall (Alibaba) all have a presence in this region. eBay is the most popular marketplace, but Amazon is gaining some traction now that the retail giant has its own in-country online store.
What do Australian shoppers like to buy online? Top performing categories include consumer electronics, clothing and books. Retailers have seen an increase in demand for personal care and beauty items as well. (See more about top performing e-commerce goods by country in our blog.)
Navigating customs and taxes
Importing and exporting can be a challenge in Australia, with an average of six documents required to export and seven to import. Additionally, it takes an average of nine days to export and eight to import. Also, Australia’s strict quarantine and packaging rules may be a barrier for cross border retailers. Restricted items include drugs, steroids, weapons/firearms, heritage items, food, plants and animals, and protected wildlife. (Read more about restricted goods in each country.)
Perhaps the most concerning development in the Australian market that impacts cross border e-commerce is the Goods and Services Tax (GST) that came into effect on July 1, 2018. The GST places a 10% tax on all overseas purchases with a value of less than $1,000. Previously, Australia’s GST was only applicable to cross border retail goods valued at $1,000 or more; however, the new rule places the tax on all goods and services coming from outside of Australia. Brands and retailers will need to keep this GST in mind when pricing goods in this competitive market.
Cross border e-commerce stores selling into Australia require a solid logistics network behind them. Customers expect versatile shipment options and reliable, end-to-end customer service. The good news is, for such a vast country, Australia boasts a world-class logistics and infrastructure system. Its Logistics Performance Index (LPI) score is ranked 18th in the world by the World Bank. Situated a great distance from its international markets, Australia has built a major multimodal transport system (across water, land and air) to facilitate international trade. There are 25 major ports in Australia linked by road, air, rail, and coastal shipping.
Download Flow’s free ebook today and learn more about what it takes for brands and retailers to succeed in Australia. Then, request a demo with Flow to see how our cross border e-commerce experts can help you open your online shop quickly and easily.