UKTI Australia, e-commerce webinar, 20 feb 2013

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

Selling To Australia Online Feb 12 2

Facts and Figures

• 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.


Facts and Figures

• 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.


15.6 million
22.5 million Australians internet users

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

Drivers behind online shopping Drivers behind online shopping

UNCLASSIFIED 6

Purchases made in the 12 months to July 2012

Online Auctions, Department Home, Furniture,
Stores, Fashion, Cosmetics, Appliances, Electronics
Variety Stores

Recreation, Groceries, Liquor &
Toys, Games & Hobbies, Specialised Food
Music, Movies, Books

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

Drivers behind choosing from Australian websites

• “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%.


Overseas providers preferred for product such as:-

Cosmetics

Outdoor equipment Beauty products
Sporting equipment

Media

Books Fashion

Retail categories with the strongest growth
potential 2013- 2019

Clothing
Footwear

Jewellery
Fashion
accessories

UK Exporters and the Internet

11

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 To Australia Online Feb 12
Selling 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
Adapting 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

• 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.
Selling To Australia Online 04/10/2012 17

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.

• Australia uses the metric system.

• 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.


Adapting your website (continued)

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

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

• 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.


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)
Richard.harper@fco.gov.uk

• Joanna Olivera
Trade Development Manager (Creative Industries, Fashion, Giftware
& Homewares)
Joanna.olivera@fco.gov.uk


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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