UKTI Australia, e-commerce webinar, 20 feb 2013

Selling To Australia Online Feb 12 2

An Overview of Australia:Facts and Figures

• Australia is an island continent and the world's sixth largest country (7,682,300 sq km)

– the country is approximately 4,000 km from east to west and 3,200 km from north to south.

– 40 % of the total coastline length comprises island coastlines with a coastline 36,735 km long.

– 20 % desert



• Australia has six states: New South Wales, Queensland, South Australia, Tasmania, Victoria, and Western Australia; and two major mainland territories: the Northern Territory and the Australian Capital Territory (ACT) which are self-governing territories with powers almost matching those of the states.



• Australia's estimated resident population (ERP) at 30 December 2012 was 22.3 million. The most populous states are New South Wales and Victoria, with their respective capitals, Sydney and Melbourne, the largest cities in Australia.

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15.6 million internet users22.5 million Australians

In the twelve months to November 2012, Australians spent around $12.6 billion on online retail.

6UNCLASSIFIED

Drivers behind online shoppingDrivers behind online shopping

Purchases made in the 12 months to July 2012

Type your title and date here 00/00/0000 7

Recreation, Toys, Games & Hobbies, Music, Movies, Books

Online Auctions, Department Stores, Fashion, Cosmetics, Variety Stores

Home, Furniture, Appliances, Electronics

Groceries, Liquor & Specialised Food

• “The desire to support local industry” or “no need to buy from overseas”’—30%.

• “I don’t trust overseas websites”—21%.

• “Item only sold or available in Australia”—18%.

• “Easier to return if I have a problem”—16%.

• “Takes too long to ship from overseas”—12%.

• “It’s cheaper after taking shipping costs into account”—8%.

• “It’s cheaper”—6%.


Drivers behind choosing from Australian websites

Sporting equipmentOutdoor equipment

Cosmetics

Beauty products

Books

Media

Fashion

Overseas providers preferred for product such as:-

Fashion accessories

Jewellery

ClothingFootwear

Retail categories with the strongest growth potential 2013- 2019

UK Exporters and the Internet

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Familiarity with UK brands

• There are some 1,1101,100 British born people in Australia, representing 21% of all overseas-born migrants (2011 Census)

And- around 950,000 Australians visit the UK each year!•Many of those ‘UK Born’ and Australian visitors are very familiar with UK brands and, together with UK residents, make a sizeable pool of consumers who are at least aware of UK brands. •But…it is an axiom of Australian retailing that you need to “sell to Australians” to achieve good volume!


Selling To Australia Online Feb 12

Selling To Australia OnlineAdapting to Serve the Australian E-market


Adapting the way you operate


• Current legislation allows imports to individuals worth less than $A1,000 in value to enter the country exempt of GST.

• Whilst this GST exemption is significant, it is not as considerable as the distributor and retailer margins that can easily double and maybe triple the landed cost of a product.

• Many companies are using this model and even some large high street retailers who have built a good e-business in the UK are finding they are passively exporting to Australia.

• Companies offering free or reduced cost freight will have a huge advantage over their competition.

• Companies that ‘internationalise’ their websites increase dramatically their chances of obtaining overseas business.

Fulfilment houses


• One solution for companies with the market demand to make the equation viable, is to ship into Australia, pay the GST, and use the services of a fulfilment house to distribute product orders on the UK home website.

• Fulfilment, also known as order fulfilment or product fulfilment, is the process whereby a person or company fulfils their obligations to send a person an item or product that the person has ordered, purchased,

or requested from the organisation.

• Note that it is rare for a fulfilment company to provide its own courier services.

Advantages


• Fulfilment companies will typically have thousands of available square footage for storage. Own inventory warehousing or use of a local distributor will incur additional expenses such as utilities. A fulfilment company is able to distribute this expense through storage fees they charge to multiple clients.

• A manufacturer will be unlikely get the beneficial ‘bulk’ shipping rates available to many fulfilment companies.

Disadvantages

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• Disadvantages include indirect control.

• Fulfilment companies will typically not take full responsibility for product damage, nor will they take full responsibility for product shrinkage.

• Some fulfilment houses have a requirement for a minimum number of orders in a particular time period.

• The most important thing to realise is that fulfilment companies are not there to represent a UK company.

Adapting your website (continued)


• If a UK firm includes an order form on its web site, then the form should be created in such a way as to be compatible with international addresses, titles, surnames, telephone numbers, postal/zip codes, etc.

• While credit cards may be popular in Australia for online payment purposes, other secure payment systems, such as Pay-Pal are becoming increasingly popular.

• Paying unnecessary taxes irritates Australians just as much as it does anyone else.

• Australia uses the metric system.

Adapting your website (continued)


• International firms need to ensure that any enquiries they receive are answered and dealt with as quickly as possible.

• In Australia, seasons are reversed, but festivals are held at the same time.

• Time difference: East coast Australia ranges from 9-11 hours ahead of the UK, depending on the time of year.

• Web sites not kept up to date will lose business.

Some local factors


• A UK company does not need to have an Australian Business Number to sell products in Australia.

• Australian domain names cannot be reserved. A company must register its business to operate in Australia and then will have an Australian Company Number.

• Goods and Services Tax (GST), at a rate of 10%, applies to most imported goods over a A$1,000 threshold.

• Subject to eligibility criteria, importers who are registered for GST might be able to defer the payment on imported goods by participating in the Deferred GST Scheme.

How can UKTI help?

OMIS service:

• Industry specific sector report.

• In-depth report with a bespoke section tailored to a specific sector with contacts in core areas.

• Product Launch.

• Commercial publicity.


Sector Report

• A copy of a detailed sector report going into the contents of this presentation in much further depth may be purchased from UKTI at a cost of £975.00. This will provide a background that will allow you to make a reasoned and logical analysis of opportunities and the realistic potential for your product in Australia.


UKTI Australia Contact details

• Richard Harper

Senior Trade Development Manager (Food and Drink, Security, Education)

[email protected]

• Joanna Olivera

Trade Development Manager (Creative Industries, Fashion, Giftware & Homewares)

[email protected]



Thank you

• Next Presenter:

Ned Shelton

Founder and Managing Director

Starting in Australia Pty Ltd

UKTI Australia, e-commerce webinar, 20 feb 2013

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Transcript of UKTI Australia, e-commerce webinar, 20 feb 2013