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PwC report: Offshore/online sales halve retail growth

July 26, 2011: A report released last night based on a PwC survey of 1200 Australian and New Zealand consumers, all of whom had shopped online in the last 12 months, estimates offshore online sales have shaved over 2 percent from Australian retail growth this year.

Among the key findings of the survey are:
– Australians are rapidly embracing online retailing – but almost half the money spent is going offshore;
– 95 per cent of consumers search the web for product information, price comparisons and peer reviews before making a purchase online;
– 65 per cent of in-store purchases are initiated on the web;
– This calendar year, Australians will spend more than $13.6 billion online, an increase of over 13 per cent on last year’s $12 billion – or twice the previously projected growth rate;
– $6 billion of that will be spent with offshore online retailers, an increase of 25 per cent on the $4.8 billion spent last year. This equates to 44 per cent of all online retail sales going offshore in 2011, up from 40 per cent in 2010;
– If 2011’s estimated offshore online sales of $6 billion were directed to Australian retailers instead, the forecast retail sales growth in Australia for 2011 would be approximately 4.5 per cent, as opposed to the current forecast growth rate of only 2 per cent.;
– In per capita terms, each Australian will spend more than $600 online in 2011, compared to $536 in 2010;
– Online shopping (locally and offshore), is expected to grow at least twice as fast as the total retail market in Australia over the next four years;
– Online spending will reach $21.7 billion by 2015, a compound annual growth rate of 12.6 per cent.;
– Lower prices, convenience, greater product range and a growth in mobile devices are fuelling online shopping;
– Less than one per cent of consumers surveyed said they shopped overseas online to avoid GST;
– During the next 12 months, 86 per cent of online shoppers surveyed indicated they would increase or at least maintain their current level of online expenditure;
– More than one third of survey participants indicated they were using a smartphone or a tablet device to buy products online.

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