Australia is one of the most tantalising markets to analyse from an ecommerce standpoint. With its close cultural and linguistic ties to the US and UK, it’s not surprising that even before its formal entry to the market, Amazon was a dominant player in Australian ecommerce. This, coupled with the physical proximity and ties with China, make it logical for Australia to be the first Western market that Alibaba pursues. 2018 is like manna, because both of those things are happening this year.
Although Australia is smaller than its regional neighbours – ranking 5th in APAC – it presents huge potential. Already, Australian ecommerce accounts to $1.95m per month, according to figures from NAB.
The high technical sophistication of Australians drives this – they have nine connected devices per household on average, according to Telsyte. Although Amazon has formally had an Australian presence only since December 2017, it already ranks number one among Australians for quality products and assortment, as well as product exclusives.
While it’s popular to pontificate that Amazon spells the end of Australian business, this is a lazy point of view. Amazon has the effect of changing consumer perceptions and making them more comfortable shopping online. In fact, right after Amazon launched, LatestBuy.com.au saw a surge in sales.
To understand what the impending arrival of Amazon down under meant, Wavemaker used its proprietary Purchase Journey thinking to understand how Australians perceived Amazon and ecommerce in general. In this study of 1500 Australians, we identified that their key consumer needs were price, convenience, and trust. Australians are well-predisposed to ecommerce, because 33% want to browse and compare products – and an equal number want to compare prices online.
Interestingly, 25% want to buy products directly from the brands – which may be an unexpected barrier to the marketplaces. However, Amazon benefits here from its positive perception – 36% are influenced by Amazon reviews and it is considered the most helpful place to get product reviews. Amazon has said it will be rolling out Prime in Australia in mid-2018, and it stands to benefit from the 20% of Australians who are interested in subscription commerce to get fast delivery. We are using the results of this study to help our clients define what their go-to-market strategy is in an Amazon-enabled world.
While Amazon is a behemoth in ecommerce, the trifecta of BAT (Baidu-Alibaba-Tencent) have nailed the integration of social media and ecommerce. The Chinese platforms have created a seamless ecosystem in which social commerce is simply the way of retailing. We are starting to see Facebook look to them for inspiration, rolling out Instagram Shopping to a wider set of markets, including Australia. With all these changes, it’s easy for brands to get overwhelmed by ecommerce – but there are two must–haves to a successful ecommerce strategy.
The first, is to identify what consumer needs are relative to ecommerce across the full purchase journey. Is your category shopped on Amazon or ASOS, and how do these channels build brands? How much does free shipping matter? Do consumers want lots of payment options?
The businesses that win on ecommerce are the ones that are truly consumer-centric, and looking from the outside in is critical.
The other element is making sure your brand is easy to find in ecommerce environments. Ecommerce offers consumers a literally infinite shelf, and few consumers navigate to the 19th page of search results. In fact, 42% of Amazon shoppers don’t go beyond page 1. Listing your product online – whether direct to consumer or via a marketplace – is just where it starts. Brands must tie together their go-to-market strategy with their performance marketing, otherwise – to use retail parlance – you are leasing a store on the floor of the mall nobody goes to.
Candidly, I’m a little jealous of Australian consumers. Not often in the history of ecommerce have we witnessed a developed market see a full-scale entry of the behemoths. Australian consumers are going to benefit from the choices that this offers up – and the brands that win are the ones that can unlock Aussie purchase journeys.
Wavemaker head of global ecommerce Mudit Jaju