A new white paper from global delivery and logistics powerhouse FedEx has taken an in-depth look at the state of e-commerce in Australia and the Asia Pacific region, finding that growth opportunities for SMEs in e-commerce are high but Australia’s e-commerce market is nonetheless predicted to grow at a yearly rate less than that of the global average.
E-commerce in Australia is already the eleventh largest market in the world, netting a reported yearly revenue for 2021 greater than US$31 billion, but is nonetheless slower in its growth when compared to comparable markets according to FedEx research. While e-commerce is expected to grow at an average rate of five percent globally, the predicted rate of growth for the industry in Australia is predicted as a full percent lower, cooling dramatically from the COVID-impacted growth rate of 15 percent reported in 2021.
The Asia Pacific region as a whole is nonetheless predicted to continue serving as key drivers of global e-commerce growth – tipped to account for as much as 45 percent of the global absolute value growth for e-commerce in the period 2020-2025.
The COVID pandemic, the research asserts, has dramatically accelerated this predicted growth and adoption of e-commerce in the region. 76 percent of SMEs surveyed by FedEx reported their belief that consumer buyer behaviour had fundamentally changed as a result of the pandemic, with an equal amount flagging that e-commerce had become a more important element of their businesses in the span of the last three years.
These figures are matched almost exactly by the responses of consumers, 67 percent of whom agree that their buying behaviour has changed as a result of the pandemic and 75 percent of whom report e-commerce have developed to make up a greater share of their overall purchasing within the last three years.
This overall sentiment landscape has resulted in considerable excitement about the growth potential predicted for e-commerce overall in the near future for a majority of SMEs, as 77 percent of these respondents state their belief that e-commerce will grow its importance in the lead up to 2025 and 91 percent of SMEs reporting excitement about this predicted growth.
Consumers, however, may not be sharing in this excitement. The proportion of SMEs in Australia reporting their belief that e-commerce will grow in importance in the near future sits at 22 percent higher than the proportion of consumers who share this belief, as Australian consumers continue to maintain stubbornness in their purchasing habits.
Issues with delivery emerges as a key driver of consumers’ reticence towards the embrace of e-commerce in Australia, as 49 percent report deliveries taking too long being a pain point when considering purchasing products online.
Stubborn consumers are far from the only barrier to growth for the e-commerce market, however, as the FedEx research further finds confirmation of issues for SMEs operating in e-commerce with regards to sourcing talent and labour to fill vacancies. 58 percent of SMEs report difficulties with the employment market and finding talent to fill job vacancies, an industry pain backed up by the 15 percent increase in job vacancies for retail in August of this year when compared to May.
Overall, the picture painted of the e-commerce market is one offering opportunities for all retailers including SMEs, but with the caveat that seeking to better understand the needs, interests and habits of consumers is of vital importance to any growth aspirations for the years ahead.
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