Six Ways to Capture More Market Share in Australia's Cross-Border Ecommerce Market

October 14, 2021

Nearly 90% of Australian consumers are cross-border shoppers. Recently, Flow followed up on a 2019 survey exploring international cross-border consumer shopping habits and found a 4% increase in the number of online shoppers who make purchases outside of Australia, from 85% to 89%. We have compiled the findings in our ebook Australia: Market Guide to Cross-Border Best Practices, a comprehensive look at what drives the Australian shoppers to buy from international retailers.

In response to the global health crisis and national lockdown measures, our report shows that 66% of Australians spend more time online than before the pandemic. Furthermore, cross-border shoppers in Australia make most of their purchases from retailers in China, the US, and New Zealand. While the need for touchless transactions caused a spike in online purchases over the past eighteen months, improvements in security and cross-border ecommerce technology have paved the way for increasing sales. It's expected that cross-border ecommerce will continue to grow at 2X the rate of domestic ecommerce, with fashion, toys, and health/beauty leading the sales categories. 

What Matters Most to Australian Cross-Border Consumers

Australian customers have three significant areas of concern when shopping cross-border: shipping cost, product delivery times, and currency exchange rates. High shipping costs are a primary concern for shoppers in all the countries included in our full study, and Australia is no exception. According to Google Market Finder, 76% of international shoppers prefer free shipping over fast shipping. Still, Flow found that 53% of Australian consumers specifically expect goods to arrive within 3-6 business days. It's important to note that this was a significant decrease from 2019, when 62% preferred this delivery window. Now 2% expect items to arrive in 2 days or under (22% to 24%) while 7% will accept seven days or more, likely in response to ongoing supply chain issues and other pandemic-related delays. 

Favorable currency exchange is still essential to Australian customers, but not as much as before. There was a sharp decrease (45% to 29%) in shoppers reporting exchange rates as a top barrier to cross-border shopping, but it still remains a concern. 

How to Convert Browsers to Buyers 

What drives Australian shoppers to complete their purchases? Flow found that offering the customer's preferred payment method influenced 79% of those surveyed to complete their purchase. Also important is the company's security guarantee (76%) and return policy (68%). 

Duty and taxes are another top concern for cross-border shoppers. More than 80% of customers prefer taxes and duties included in the price, but many still want to see a clear cost breakdown during checkout. It’s important to keep these nuances in mind when selling into the Australian market and consider a/b testing different displays of duties and taxes.

Checkout is where most cart abandonment happens. Besides not being ready to buy, many shoppers abandon carts due to unexpected costs. High shipping costs (45%), lack of free shipping (38%), expensive prices (27%), and slow delivery (21%) are what cause most shoppers to click away from the site and potentially shop elsewhere.

Delight Australian Customers and Drive Sales 

For companies looking to expand their cross-border presence in Australia, here are six ways to delight customers and boost sales:

1.     Offer free or discounted shipping. Free shipping is a home run with customers in all regions. If free shipping isn't feasible, shipping discounts also make popular promotions. Are you still shipping through a central hub? Hubless shipping options can lower costs and shorten delivery windows, two of the most important factors in successful cross-border sales. 

2.     Feature a variety of local payment options. Many shoppers use PayPal (46%) and debit cards (34%) to pay, but demand for buy now, pay later programs is growing, especially among younger shoppers (18-34) and women. 

3.     Show duty, taxes, and other fees early on. Even if tax and duty is included in the price, shoppers want to see the details. Use your ecommerce platform's ability for real-time A/B testing to try out various pricing configurations and optimize your customer's checkout experience for maximum conversions.   

4.     Keep checkout simple. Every bump in the road is a chance your customer will take a detour. Streamline checkout to make it as easy as possible for shoppers to complete their transactions. One-click purchases, allowing guest checkout and social sign-in, offering multiple payment methods, and removing unexpected fees like hidden shipping costs will keep customers coming back for more. 

5.     State secure transaction and return policy information. Even with constant improvements to online security, hardly a day goes by without reports of new data breaches. It's more important than ever to help shoppers feel secure that their personal and financial data will not be compromised. Feature security seals and badges on a distraction-free checkout page for best results. Also, clearly communicate return policies throughout checkout. 

6. Localize and translate key parts of the customer journey. Most Australians (77%) say they won't shop on a non-English language website, which is true for most English-speaking countries as well. In particular, checkout is viewed as the most important part of the site to translate into English, followed by the shopping cart. Translating these components of the website in addition to converting prices to the local currency and displaying accurate duties and taxes for each region will create a more seamless experience for shoppers in each reason and boost conversion. Retailers that provide hyper-localized experiences, from promotions on the homepage all the way through the checkout process and delivery will to to achieve the most success with cross-border e-commerce. 

Australia's ecommerce market is expected to grow by 13.4% in 2021 and is on track to surpass $70 billion by 2025. Companies looking to expand their cross-border presence here and in other global regions should strive to offer seamless ecommerce experiences to customers regardless of location. 

Start with a robust cross-border ecommerce platform and seamless logistics with Flow Commerce’s solution. Find out more.

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