Melbourne, Australia (PRWEB) October 24, 2013
Online retailing has changed the face of the Australian retail sector, representing a paradigm shift in the way consumers make transactions. While the Online Shopping industry in Australia is in its infancy, both technologically and monetarily, it has grown dramatically over the past five years to become part of the mainstream consumer's psyche. According to IBISWorld industry analyst Lauren Magner, “this has been aided by the equally rapid growth in internet and broadband penetration, combined with an acceptance of electronic commerce as a viable and safe alternative to traditional bricks-and-mortar retailing”.
The industry has benefited from consumers seeking choice and value, particularly as discretionary spending and overall consumer sentiment have declined. The online space offers unprecedented choices, as there are no geographical boundaries and prices are highly competitive. Industry revenue is expected to grow by an annualised 24.1% over the five years through 2013-14 to $12.4 billion. In 2013-14, the revenue is forecast to increase by 11.3%. Industry profitability has remained at a stable level, despite a strong increase in total revenue. “The start-up and maintenance costs for major online websites has kept profit margins low, in addition to high competition within the industry,” says Magner. However, for small operators, the cost of setting up a website can be minimal. The industry displays a low level of concentration, with Wesfarmers Limited and Woolworths Ltd the only operators with significant market share.
As online retail becomes more normalised, revenue growth is expected to temper over the next five years. Regional areas will be able to access faster and more secure internet connections through the rollout of the National Broadband Network. This will substantially increase the Online Shopping industry's potential consumer base. The growth of online retailing through smartphones and tablets will provide further opportunities for operators to enhance products and services and reach a wider, technologically savvy audience. An increasing number of bricks-and-mortar retailers will migrate online to complement traditional offerings. Industry revenue will also be boosted as older Australians become increasingly computer literate. Furthermore, recovery of the global economy will bode well for the retail sector in general.
For more information, visit IBISWorld’s Online Shopping report in Australia industry page.
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IBISWorld industry Report Key Topics
Retailers in this industry operate websites that enable consumers to purchase a broad array of products, such as apparel, computers, recorded music, electronic goods, general merchandise and groceries. Industry participants are either pure-play online retailers or bricks-and-mortar stores that have an online presence. The industry does not include the sale of goods or services by agents that do not take ownership of the goods and services, or the sale of goods by individuals.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 38.