A massive convergence is underway between retail and logistics, courtesy of the rapid rise of e-commerce. Unfortunately, today’s logistics processes aren’t fast enough to keep up with the sales momentum that e-commerce generates.
There are, however, some countries that are well positioned to capitalize on this convergence due to their technological and infrastructural capacity. Australia stands out as one such example, and the potential it holds for future innovations in global e-commerce could be truly awesome.
Built to Deliver
Australia is an island -- the world’s largest, in fact. Hence, it built a lot of ports to connect to the rest of the world. It’s also the world’s sixth-largest country in terms of area. This required a lot of roads and airports to connect its cities. The result: Australia’s logistics infrastructure ranks 18th in the world, according to the World Bank’s Logistics Performance Index.
With the addition of modern-day developments like global manufacturing shifts towards neighbors China and Southeast Asia, and widespread technological adoption, Australia finds itself perfectly situated to ride the e-commerce boom.
The payoff: Australia’s 2019 e-commerce revenues are projected to reach $20 Billion, and its e-commerce projected growth rate is the fourth-highest in the world, trailing only China, the USA and France.
Now Go Global
Australia’s estimated 13.5% annual e-commerce growth rate has drawn in global players such as eBay and Amazon, who recently increased its warehousing capacity in anticipation of growing consumer demand. However, Australia’s e-commerce growth isn’t just a “one way street” of imports. Local retailers like JB Hi Fi, The Iconic, Catch of the Day and Booktopia are growing fast on the strength of strong local omni-channel demand.
Beyond the e-commerce boom in their home country, Australian companies are also well positioned to grow their export sales to the rest of the world via e-commerce platforms. In consumer categories ranging from baby care products to cosmetics to wine, Australian companies are increasingly pursuing global opportunities.
"There are currently around 55,000 Australian businesses participating in Australian online marketplaces with many looking to expand internationally," according to Nicola Watkinson, General Manager at The Americas with the Australian Trade and Investment Commission (Austrade). "There is a strong focus on the Indo Pacific and the USA given the demand for ‘clean and green’ consumer products made in Australia."
To realize international e-commerce sales, retailers need logistics expertise to support global freight management. As a result, logistics companies like freight forwarders really stand to benefit from Australia’s e-commerce strengths.
Ms. Watkinson added, "With an annual growth of 8.4% forecast for e-commerce in Australia between 2019-2024 by IBIS World the demand for freight and other e-commerce services is going to keep growing. Innovative solutions will be received well as the market continues to evolve."
Australia’s top export partners include East Asia, South Asia, and the USA, and as e-commerce sales grow, the need increases for partners that can understand the complexities of each region or country, something that freight forwarders have successfully navigated for decades.
Daks Gunaratne, the Vice President of VIC/Tas at Supply Chain and Logistics Association of Australia (SCLAA), pointed out why choosing the right logistics partners from the start is so critical for retailers exploring e-commerce as a growth channel: “New companies look for growth outside of Australia within the first few years of establishment. Choosing the right logistics partner is of paramount importance to navigate the complex regulatory environment especially in South Asia.”
If you’re a retailer looking to expand your online business options, or a freight forwarder looking to leverage your existing infrastructure for new sales opportunities, now’s a great time to start looking at rapidly growing markets like Australia.
Contact CoLoadX today to learn more about how we’ve helped Australian merchants and Australian logistics companies access new origins and destinations to meet their e-commerce sales needs.