March 29, 2012
The Age
THE growth of e-commerce in Australia is being stunted by the expensive and sometimes slow parcel delivery options local companies face, a new report shows.
The share of online retailers complaining about postage costs in eBay’s 2012 online business index rose to 55 per cent from 50 per cent last year, even as concerns about other areas such as staff costs and rent declined.
The results, released in conjunction with the Committee for Economic Development of Australia’s conference on the future of retail in Sydney today, underscored the structural barriers restricting the local industry.
“One of the highest barriers to e-commerce in Australia is fulfilment,” said the opposition minister for communications and broadband, Malcolm Turnbull, in the report.
More than two-thirds of respondents in the eBay report, 68 per cent, wanted better postage rates while 54 per cent wanted improvements in tracking.
Although there are multiple channels for shipping in Australia, Australia Post, for example, is considered to charge as much as 30 per cent more than alternate shippers, industry experts say. An 8-kilogram box shipped from central Melbourne to central Darwin, for example, cost $35.75 through Australia Post but can be sent for as little as $28.98 through other services.
“The reality is, there is not a single provider that can offer best pricing across the board,” Carl Hartmann, the director of online logistics company Temando, said. “UPS might be the best on one lane, whilst DHL is best on another.”
That maze of shipping decisions regarding time, method and convenience adds to the difficulty in reorientating large retail businesses like David Jones, Harvey Norman and Myer to “omni-channel” distribution models. David Jones, while detailing its “omni-channel” plan last week, forecast its profit would drop up to 40 per cent this year, as it grapples with the change.
The share of businesses blaming high rents as the biggest obstacle for growth fell to 26 per cent from 29 per cent last year, while those worried about business lending rates fell to 19 per cent from 29 per cent.
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