eCommerce on the rise but SMEs not plugged in, ACMA report finds

Consumers are more readily accepting eCommerce as a regular shopping tool, with 62% of adults purchasing goods and services in the six months to April, but SMEs are still behind when it comes to fostering new business, with just 18% of SMEs using some form of social media.

The new statistics, which come as part of a new report from the Australian Communications and Media Authority, also find that while Australians still predominantly purchase from Australian websites, the proportion of those that mainly do so has fallen from 68% to 53%.

The new eCommerce Marketplace in Australia: Online Shopping report shows that a growing number of Australians are using the internet for everyday activities, including paying bills and socialising.

But while ACMA chairman Chris Chapman said in a statement the research suggests consumer confidence about spending online is growing, there are still figures showing SMEs are taking too long to get on the bandwagon.

It identifies social media as having “yet to develop as a mainstream business tool”, with just 18% of internet connected SMEs using social media as of April, compared to the 8.6 million consumers who do so.

But the opportunity is there – 169,000 consumers purchased a product or service after reading information on social networking sites, the data shows.

The study shows 42% of retirees surveyed paid bills online, up from 18% last year, while 45% used banking services and 14% even purchased goods and services. 55% of white collar workers paid bills online and 19% purchased goods or services, while 45% of students paid bills online, up from 32% last year.

The most tech-savvy group were managers and professionals, 68% of whom paid bills online, 71% used banking services and 24% purchased goods and services – the highest out of any demographic.

Those aged between 35 and 44 are most likely to buy online, with 73% doing so, while 70% of those living in remote or very remote areas purchased online.

Sixty-seven percent of consumers said they purchased online due to convenience, but 43% said because of price – and that’s up from 38% in 2009.

The most popular categories included travel goods, clothing, shoes and personal items, (the fastest growing item), along with concert and movie tickets. The least popular products included food, groceries and alcohol, and communications technology.

Telsyte senior research manager Sam Yip says it’s clear eCommerce is a growing force that still needs to be taken up by Australian companies.

“eCommerce is continuing to grow, whether it’s through new business models like group buying, or new online payment methods. eCommerce is becoming more accessible to everyone.”

The lack of an online presence is also causing more consumers to head online. The figures show that while 59% of consumers shop on overseas sites because it’s cheaper, 15% do so because there is a higher variety of products – up from 13% in 2009.

“It makes sense the overseas pie is growing,” Yip says. “It’s not just about availability and range, however, it’s just that the whole cost of buying overseas is just getting cheaper.”

In fact, the report found that 48% of Australians purchased online and did so equally from overseas sites and local sites, compared to 31% in the six months to November 2009. 19% mostly purchased from overseas sites, up from 12%.

“This research suggests that consumer confidence about making online transactions is growing and Australian businesses have a real opportunity to develop their businesses and engage with consumers in the online space,” Chapman said in the report.

But as Yip says, it’s up to Australian businesses to think about the reasons why consumers are shopping from overseas sites, and then address those concerns.

“It’s not just availability, it’s about a wider range. It’s the availability, and range, and the overall cost,” he says.

“What’s also interesting is if you look at the top online shops, and it’s interesting if you consider Woolworths is the third most popular. It’s not the first company you think of as an eCommerce destination.”