July 25, 2013, 12:34 PM

Web sales will approach 10% of retail sales in Australia and New Zealand by 2017

Online shopping currently commands about 7% of retail sales in each country.

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E-commerce will gain a stronger foothold in Australia and New Zealand, according to research and consulting firm Frost & Sullivan. Online sales in each country will grow at a compound annual rate of approximately 13% through 2017, with the web then accounting for nearly 10% all of retail sales.

Frost & Sullivan based its projections on an analysis of 1,200 online shoppers in both countries. It estimates the web will account for approximately A$18.3 billion ($16.76 billion) in sales in Australia this year, rising to A$30.0 billion ($27.48 billion) by 2017. Nearly half of current online spending, 45%, goes to e-retailers located outside Australia, Frost & Sullivan says, and 79% of online shoppers say they shop with foreign retailers to some extent. That’s partly because purchases of A$1000 ($916) or less made with foreign retailers are exempt from the nation’s 10% goods and services tax.  Online sales in Australia currently account for 7% of all retail sales; that will increase to 9.8% in 2017, according to Frost & Sullivan.

Sales in New Zealand are smaller, but growth rates are similar. The web will account for NZ$3.65 billion ($2.90 billion) in retail sales this year, and rise to NZ$5.98 billion ($4.74 billion) by 2017, Frost & Sullivan says. Online sales in New Zealand currently account for 7% of retail sales; that will rise to 9.4% in 2017. More than half, 54%, of online shoppers in New Zealand make purchases with overseas retailers.

“Overseas retailers have been actively targeting the New Zealand market over the last couple of years,” says Phil Harpur, senior research manager, Australia and New Zealand, at Frost & Sullivan. “The strength of the New Zealand dollar increases purchasing power of local consumers on overseas sites, and this has been a strong driver of growth.”

U.S.-based retailer Macy’s Inc. and U.K.-based Asos plc Holdings are among the foreign retailers making an effort to sell to Australians and New Zealanders. Macy’s is No. 11 in Internet Retailer’s Top 500 Guide, and Asos is No. 32 in the Europe 500.

In the Asia-Pacific region, 21 of the 500 largest e-retailers by sales are based in Australia, according to the Asia 500. Three of the 500 are based in New Zealand. 


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