Retailers in Australia unnerved by online competition?

There have been suggestions that many retailers in Australia could be getting nervous about the level of online competition from international rivals.

For many regular retailers in Australia and around the world the internet has brought with it stiff competition over recent years. More and more broadband consumers are becoming used to making purchases online, and for many online shopping gives them the chance to enjoy greater choice, better value for money, and total convenience, as they can shop from the comfort and privacy of their own homes.

According to one recent report the soaring popularity of online shopping is causing concern for retailers across Australia, with suggestions that many are nervous about the level of online international competition. In fact, nerves over this competition have kicked in to a degree where Australian retailers are calling on the government to introduce a ten percent sales tax levy on goods that are purchased by individuals from websites overseas.

It is thought that improved broadband access, the use of smart phones and other mobile internet devices, and a stronger currency could result in further increases in the level of online purchases made from abroad in Australia, which is something that Australian retailers are very concerned about.

Morgan Stanley analyst Thomas Kierath said: “The threat of internet retailing to in-store retail has been around for more than 10 years, but we think this threat is now becoming real.”

Karara Capital investment manager Akshay Chopra said: “People are not buying online because it is 10 percent cheaper. Even when you include shipping, things are much cheaper and the range is much greater. The margins in Australia for many retailers are probably too high compared with retailers globally.”

Are Australian retailers right to be worried about international online rivals? Leave your comments and let us know

Source – Asia One