Discounts drive eCommerce as industry set to reach $30 billion in sales by 2016

The Australian eCommerce industry has transformed into one of discounts and bargains, a new report from research firm Telsyte has found, with the sector growing 64% in 2011 to reach $15.9 billion in turnover.

And while the fashion and grocery markets are currently the most popular areas of spending, senior research manager Sam Yip says computer-related hardware, software and mobile-related transactions will become even more important in the next few years, as turnover reaches $30 billion by 2016.

“One we’re looking at specifically is hardware and software, although it’s highly susceptible to seasonal shifts. When the iPad comes out soon, we expect to see massive spikes there.”

“We see mobile as the next biggest driver in the next few years.”

Yip points to mobile technology growing more commonplace and the introduction of mobile payments, warning businesses they should be paying attention to these trends if they hope to stay ahead.

“You look at what’s happening with mobile payments, even carrier payments, in the United States and Europe…we expect that to have an even bigger presence.”

Google has already released its own Google Wallet app which allows users with NFC-capable phones to make transactions using their mobiles and contactless readers.

The survey found that while many online stores exist where businesses are selling products for a premium, the latest trend has been for sites to emphasise their discounts and bargains.

“The common denominator is coming from online discount shopping,” says Yip. “We know group buying is a big driver, of course, but there are others too.”

“We know that in the past 12 months most online stores have adopted some sort of clearance page or a daily deals page and we’re also seeing a lot of retailers moving away from the catalogue model.”

This trend is causing the internet to become more associated with bargains and discounts in a department store-like appearance rather than being seen as a place for luxury, premium brands. Yip says this has been the trend in some sectors for a while, but the monetisation of websites that now allow transactions has solidified that movement.

“Consumers have used the internet for comparing deals for years. It’s just the monetisation that has boosted the number of the sites offering these types of discounts.”

While that should be good news for bricks and mortar retailers in that it differentiates the experience of shopping in a physical store, online sales grew 64% to $15 billion in 2011.

The research, which surveyed more than 1100 Australian consumers and 350 retailers across 18 categories, found that travel, groceries and fashion were the most popular sectors, taking up 73% of all revenue.

The grocery and travel industries in particular have jumped on to the discount craze, with Catch of the Day, Woolworths and Deals Direct all launching discount sites within the past year.

“Travel has been one of the biggest boom categories in the group buying market, and fashion has seen a whole array of online fashion stores become successful,” Yip says.

The total turnover figure of $15.9 billion is higher than the $11 billion recorded last week by NAB in its own online sales index. However, Yip says Telsyte factored in a number of different payment mechanisms, including PayPal.


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