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How to ensure your e-Commerce ‘Down Under’ comes out on top – Part 2

8 September 2016 - Gareth Goodridge, Digital Marketing Director, Worldpay
Last time we looked at the opportunities mobile and social present to merchants accessing the Australian eCommerce market. In Part 2 of this blog, we’ll look at cross-border eCommerce, payment preferences, and delivery.

Cross-border shopping

The cross-border e-Commerce market in Australia has grown at a 16.4% CAGR since 2013.  And today, 63% of Australians shop across national borders – making them the biggest nation of cross-border shoppers in the world1.

Due to the common language, consumers are most likely to buy from the US (84%) and the UK (75%), but China is also attractive – with 40% buying from there1.  Other positive news is that slower deliveries associated with cross-border purchases don’t put consumers off – with 36% expecting shipments to take two weeks or longer1.

If you decide to target cross-border shoppers from Australia, then it’s key that you take their payment preferences into account.  For example, according to our research into the online payment journey, 46% of Australian shoppers would be more likely to purchase if their preferred payment logo is on your homepage2.

And currency shown on your website is also key.  Our research showed that 56% of Australian shoppers want to see prices in Australian Dollars and the local currency2.

Payment choices

Credit cards are the preferred payment method for online shoppers in Australia – at 61%.  However, this is predicted to decline over the next few years – falling to around 40% by 20193.

e-Wallets are seeing incredible growth – with 21% of e-Commerce transactions via this method3.  In fact – Australians are the biggest users, percentage wise, of e-Wallets, in the world.  Some sites also offer ‘Cash On Delivery’ which is a service offered by Australia Post.

As with cross-border e-Commerce, to be successful in Australia, you need to ensure you are offering the right payment options to your customers.

Our research into ‘Why Do They Pay That Way’ found that the top 3 reasons Australians chose their preferred payment type are: Speed (26%), Simplicity (22%) and Security (21%)4.  And 16% of Australian shoppers have not been able to complete an online purchase because their preferred payment method wasn’t available.  This figure rises to a staggering 27% for those aged 25-34 – with 13% buying from a website that did offer their preferred payment type4.  So – you can see how critical it is to understand your customers’ preferences.

Delivery

Free delivery isn’t expected in Australia.  Many e-Commerce sites have a minimum order value to qualify for it.  Also, due to the expanse of the country, next day delivery is not the norm – unless you live in one of the larger cities.

Whilst investment is going into building a distribution infrastructure, some retailers only sell digital items (such as eBooks, apps, music downloads, etc.) on their Australian sites.  For ‘physical’ items, they direct customers towards cross-border e-Commerce.

Traditionally, domestic e-Commerce hasn’t been as strong as cross-border in the country – but as domestic grows, the infrastructure is likely to be put in place.  It’s really a case of ‘watch this space’!

Accessing Australia

If your business already operates in Australia, or you’re thinking of targeting this market, our team of Asia-Pacific specialists are here to help.  We recently launched our Australia licence, and are already supporting a number of our customers realise the opportunities.