Online shopping offers unprecedented choice, as there are no geographical boundaries and prices are highly competitive.
Melbourne, Australia (PRWEB) January 14, 2015
Operators in the Online Shopping industry in Australia have changed the face of the Australian retail sector, representing a paradigm shift in the way consumers make transactions. While the industry is in its infancy both technologically and financially, it has grown dramatically over the past five years to become part of the mainstream retail sector. According to IBISWorld industry analyst Lauren Magner, “the rise of the industry has been aided by the rapid growth in internet and broadband penetration,” combined with consumer 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 been relatively weak. Online shopping offers unprecedented choice, as there are no geographical boundaries and prices are highly competitive. Industry revenue is expected to grow by an annualised 18.9% over the five years through 2014-15, to reach $14.0 billion. In 2014-15, revenue is forecast to increase by 19.4%. Industry profitability has remained stable, despite a strong increase in total revenue. The start-up and maintenance costs for major online websites have kept profit margins low, as have the high levels of competition within the industry. “However, the cost of setting up a website can be minimal for small operators,” says Magner. As a result, there has been a significant influx of new entrants into the industry over the past five years, with enterprise numbers growing by an annualised 12.2%. The industry exhibits a low level of market share concentration. Major players include Wesfarmers Limited and Woolworths Ltd.
As online retail is increasingly normalised, revenue growth is expected to slow over the next five years. Regional areas will be able to access faster and more-secure internet connections with the rollout of the National Broadband Network, which 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 launch online stores to complement their traditional offerings. Industry revenue will also be boosted as older Australians become increasingly computer literate.
For more information, visit IBISWorld’s Online Shopping industry in Australia report page.
Retailers in this industry operate websites that enable consumers to purchase a broad range 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, who do not take ownership of the goods and services, or the sale of goods by individuals.
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IBISWorld industry Report Key Topics
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 3886.