Business Advice

Aussie businesses turn to e-commerce with local sales dominating online

- September 13, 2016 2 MIN READ

More than half of Australia’s small and medium businesses are using e-commerce, with 95 percent making most of their online sales to customers in Australia, according to the 2016 Sensis eBusiness Report.

Sensis Commercial Director, Rob Tolliday said, “For those using ecommerce, online sales have grown from 32 percent to 43 percent of their total sales over the past four years. And while a quarter are selling to overseas customers, only 2 percent are making most of their sales to this group.”

“Selling online has become increasingly important as fewer shops have a physical store front and those that do have to battle with major overseas retailers who have landed in the key shopping strips,” he said.

The study, from digital expert Sensis, surveyed 1,000 Australian small and medium businesses and 800 Australian consumers about their online experiences and found that more than seven in 10 Australians made purchases online this year, up 10 percentage points from last year.

Overall, the most popular items bought online are airline tickets (up from 47 percent to 53 percent), clothing, accessories or shoes (up from 51 percent to 57 percent) and hotel reservations (up from 47 percent to 53 percent), with the average consumer spending $3,300 for the year down from $4,400.

“While sites such as Amazon offer consumers more choice, the falling Aussie dollar has seen overseas purchases remain steady, with less than a quarter of online purchases being made on overseas sites,” said Tolliday.

More transactions are occurring online, but businesses and consumers remain concerned about hacking. Sixty-nine percent of businesses and 85% of consumers worry someone might interfere with their online transactions.

“We’ve all had a Nigerian Bank offer us a large sum of money in exchange for personal details and the issues with the recent Census no doubt increased people’s concern about the safety of their information online. Businesses using e-commerce need to ensure their online sales environment is trustworthy and legitimate,” said Tolliday.

Other key findings from the 2016 Sensis eBusiness Report are:

̵ More than six in ten (61 percent) small and medium businesses now have a website (up from 56 percent), and 43 percent of those are optimised for mobile devices (up from 35 percent)

̵ Almost six in ten (59 percent) believe it is important to be on page one of a Google search (up from 46 percent)

̵ Only 19 percent of businesses have a digital business strategy (up from 17 percent)

̵ Expenditure on software and hardware was down from $9,830 to $9,111 last year, with expectations it will fall further to $8,342 this year.

Proportion of SMBs using online marketing services
2015 2016
Website 56% 61%
Social media advertising 31% 34%
Digital display advertising 35% 32%
Search Engine Optimisation (SEO) 28% 32%
Search Engine Marketing (SEM) 18% 16%
App 6% 7%

“Of those businesses that don’t have a mobile friendly website almost two thirds have no plans to upgrade. This is a risky strategy, given Google’s search algorithm preferences mobile friendly sites and customers now expect a seamless digital experience on any device.”

“Businesses not already online often feel overwhelmed and aren’t sure where to start. The best thing to do is to create a simple digital business strategy. This will help them choose the right products and services to target their customers, while only spending what they can afford,” said Tolliday.

“While your website can be a crucial destination for your customers, not all businesses have one. Of those businesses without a web presence, almost one in five are listed in a directory, some are featured on third party websites and others are on social media. So your strategy can be tailored to your budget and marketing priorities.”

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