The Growth of Online Shopping in Australia - Case Study Example

The Growth of Online Shopping in Australia Student’s Name Institution Date Outline a. Introduction b. Advances in Internet Technologies c. Online Payment Systems d. Reduced Expenses e. Conclusion The Growth of Online Shopping in Australia Introduction Online shopping has experienced a lot of growth in Australia and other parts of the world. This has been attributed to the increase in the number of people who carry out electronic commerce transactions through various computerized devices. It is estimated that the total amount of sales which are done online in Australia range between 3 and 7 percent. This figure is lower than that of North America, Western Europe and some parts of Asia where online sales account for close to 25 per cent of all sales made by business firms. It is projected that online shopping in Australia will grow by about 15 percent in the next three years (McLean 2013). This paper will discuss factors that have contributed to the increase in online shopping in Australia in the last decade. Advances in Internet Technologies The development of the internet and electronic technologies has encouraged firms to adopt innovative marketing practices that allow them to reach out to many consumers beyond their traditional markets. This has made it possible for business firms to market products through their websites and other online channels to attract new consumers. As a result, business firms have been able to appeal to new consumer segments in different areas by selling them high quality products which satisfy their needs. Online shopping in Australia has been highly adopted in the service sector where different firms use web based tools to sell different services to their consumers (PWC 2012). For instance, many airlines in Australia and beyond book and sell electronic tickets to their customers through the internet. Many consumers are attracted to the convenience and superior service they get through ordering and purchasing products through the internet. Therefore, they find it easier to purchase a product through an online medium than taking time to go to the specific point of sale where a product is stocked. As a result, this makes more consumers interested in purchasing products from online shopping stores to serve different needs. Fast food outlets have experienced an increase in the number of consumers who purchase their products through online platforms. Many consumers are attracted to the additional value features which accompany online shopping services (PWC 2012). For instance, many fast food outlets allow their clients to make reservations through online platforms. They also make deliveries to their clients’ homes and places of work after they have received payments for products ordered. Online Payment Systems The integration of online payment systems with other banking services has encouraged more consumers to purchase different types of products online. Customers are now able to use their Visa and Master cards to purchase different products from a variety of sellers through the internet. Advances made in the financial services sector have enabled consumers to carry out different business deals through the internet. As a result, business firms have developed their internal systems to ensure they take care of their consumers’ needs. The rapid growth in telecommunications has meant that the world is more networked than ever before, which has increased volumes of goods and services sold through the internet (PWC 2012). Consumers in Australia are now able to purchase different products from Asia, Europe and other parts of the world which are shipped after they have paid for them. Many online shoppers in Australia consist of individuals aged 15 to 45. This category of shoppers use different types of technologies and are highly attracted to new ideas that offer them opportunities to advance themselves. More people in the country follow latest trends in fashion, music, sports and entertainment keenly, which increases their demand for different types of consumer goods (Chen & Wellman 2004). Therefore, they find online shopping more suitable for their needs because they are able to purchase different songs, movies and other programs through the internet without a hassle. Music and movie downloads from different online distributors make up a significant chunk of products which are sold online. Consumers find online shopping more appealing because they are able to purchase and experience different forms of entertainment at the touch of a button without going to specific shops where these items are stocked. Reduced Expenses Some business firms have opted to sell their products through online platforms to reduce their overheads and other recurring expenses. This allows them to save on rental, human resource and license expenses they are likely to incur if they sell their products from physical premises. Therefore, they have opted for online selling to enable them sells more volumes of products to their clients (O’Cass & Fenech 2003). These firms have managed to improve their customer service systems because they are able to interact with their consumers constantly and they understand how to serve their needs. As a result, there has been an increase in the number of consumers who purchase products through the internet. Some of these firms have developed strong bonds with their consumers which have allowed them to improve their operations in different industries they are operating in. Australian online shoppers prefer purchasing consumer goods more than other items such as food and medicine. People are more confident in using the internet for conducting different business transactions that affect their daily lives. They find it easier to compare prices of similar items offered by different sellers in the market through the internet. This allows them to place orders for products they find suit their needs in terms of pricing, quality and delivery methods used. More Australians are spending more time on the internet and it is estimated that between 1998 and 2008, the number of households that have internet connections increased from 16% to more than 70%. The internet penetration rate is projected to increase by more than 80% by the year 2015 (Commonwealth of Australia 2011). This shows that more people will continue to purchase products through the internet, a factor that will make e-commerce in the country grow. Conclusion In conclusion, the increase in the rate of internet penetration has encouraged more people to shop online. This has improved the usage of e-commerce in Australia because more people are able to perform different transactions through the internet. References Chen, W & Wellman, B 2004, ‘The global digital divide: within and between countries’, IT & Society, vol.1, no. 7, pp. 39-45. Commonwealth of Australia 2011, Communications report 2010–11 series report 1-e-commerce marketplace in Australia: online shopping, Australian Communications and Media Authority, Sydney. McLean, IW 2013, Why Australia prospered: the shifting sources of economic growth, Princeton University Press, Princeton. O’Cass, A & Fenech, T 2003, ‘Web retailing adoption: exploring the nature of internet users web retailing behavior’, Journal of Retailing and Consumer Services, vol. 10, pp. 81-94 PWC 2012, ‘The rapid growth of online shopping is driving structural changes in the retail model’, Australian online shopping market and digital insights: an executive overview, Pricewaterhouse Coopers, Sydney. Read More