While speculation about overseas competitors entering the market is causing concern for small business owners, it has Australian shoppers pledging allegiance and renewed loyalty to small business retailers, new research by eBay.com.au has found.
The research from the platform that is home to more than 35,000 small businesses reveals consumer loyalty is alive and well, with one in five online shoppers confirming they will actively seek out smaller Australian sellers as international competition heats up.
Further, nearly a third (33 per cent) of online consumers said that their shopping habits won’t charge regardless of new players in the retail market. In fact, a mere four per cent of online shoppers said they would exclusively use Amazon when it enters, with 29 per cent suggesting that they would continue to use a variety of platforms.
Gavin Dennis, CFO and Head of Retail Insights for eBay Australia, suggests that speculation about the impact of increased international competition could be causing unnecessary angst.
“In the world of small business, many owners have concerns around where they will fit in the buyer mindset when bigger international players enter the market. However, Australian online shoppers are telling us that the concern is unfounded – with many suggesting they will be seeking out Australian small businesses as a counter to this market change.”
A disconnect between consumer loyalty and small business concern is highlighted through the online small businesses surveyed, with 60 per cent believing Amazon’s predicted entry was likely or very likely to cause market share or customer loss, compared to 30 per cent believing it is unlikely to impact their situation. Interestingly, small businesses operating on a marketplace were much less likely to believe there would be an impact (25 per cent) than those who weren’t (44 per cent).
For some online small businesses, disruption via competition is perceived as a threat to their livelihood, with 33 per cent believing SMEs could be forced to shut down if international competition significantly increases.
“A good chunk of Australian consumers are telling us that the market change expected to hit in the next 12 months is making shopping with small businesses even more important to their retail experience,” Dennis says.
“The Australian small business sector is extremely important to our country’s economic prosperity, and in the online SME space we are constantly seeing innovation and a leveraging of their ability to be nimble. SMEs are best placed to deliver unique experiences, great customer service and the broadest inventory.”
The research revealed our sunshine state is the most committed to local businesses, with one in three Queenslanders suggesting they will actively seek out smaller retailers, followed closely by New South Wales residents and Victorians – of whom one in four will be committing to shopping with small retailers.
In a boon for local industry, 42 per cent of small business owners suggested that the entry of overseas competitors will create a platform to breed more partnerships between those on the big and small sides of town, quickening the pace of innovation.
“At a time when choice and accessibility is no longer a barrier for consumers, we are seeing a change in the way Australians like to shop online. The rise in consumers seeking the unique and the colourful has created a whitespace which can be best serviced by the Australian online small business community.”
Inside Small Business
