“Australian online businesses are optimistic because they’re seeing the ways that technology like eCommerce can help them move faster and seize global opportunities.”
A major study that monitors the sentiment of online SMEs reveals optimism levels are high despite concerns over the domestic economy, property costs and government bureaucracy.
SMEs make up the vast majority (up to 99%*) of Australian businesses and contribute around 40%** of the country’s GDP, but in recent studies have revealed a generally pessimistic outlook when it comes to the future.
The eBay Opportunity Economy national study of over 700 Small to Medium e-Businesses (or SMeBs) has found a more positive outlook with 64% of them feeling optimistic for the next year with two thirds (66%) forecasting overall sales increases in the next 12 months.
The rise and reach of the digital dollar
One third (32%) of Australian SMEs (approximately 660,000) are SMeBs: organisations with fewer than 200 employees which use eCommerce to receive orders for their products and/or services online.***
These Australian businesses are confident about the contribution of digital channels to their bottom-line with two thirds (66%) of SMeBs forecasting an overall sales increase in the next year. Expectations for sales growth are highest for online channels (66% anticipate growth) but are also strong for mobile with half of all respondents expecting increasing sales via this channel.
Mr Tim MacKinnon, Senior Director, Retailer Growth at eBay said, “Australian online businesses are optimistic because they’re seeing the ways that technology can help them move faster and seize global opportunities.”
The Australian powerhouse vs. the world
Optimism amongst Australian SMeBs is notably higher than their Commonwealth counterparts with research this year from a UK study revealing that less than half of UK SMeBs (49%) were optimistic about their business prospects for the year ahead.
Australia’s strong connections to the rest of the world are setting it apart as an eCommerce powerhouse. More than 70 per cent of Australian SMeBs are exporting compared to less than 5% of registered businesses in Australia. The number of SMeBs exporting increases to 88% when you just measure Australian SMeBs utilising eBay’s global footprint.
SMeBs report exporting to customers across 15 global regions with the UK and North America being the two biggest trading partners (28% of SMeBs have customers in these two countries).
Other notable trading partners include China (15% of SMeBs have customers here), India (14%) and Japan (10%). Reflecting this, a third (38%) of SMeBs agreed that the China FTA improves their export prospects.
“We’ve seen a lot of negative talk over the years about Australian businesses being slow to evolve at the same rate as the connected consumer but today we are seeing businesses embracing change at pace and in many cases we are actually further advanced than our global counterparts,” said McKinnon.
“The Internet and mobile channels have broken down barriers to trade and are helping to inject extra cash into the Australian economy. This is especially true for regionally based sellers where almost a quarter report that more than 40% of their sales are coming from customers overseas,” he added.
Mr Paul Nieuwenhuys, owner of eBay store Hooked Online said, “Over the past few years, we’ve grown from a few hobby related sales to one of the most popular fishing and tackle destinations in Australia. As we approach the end of 2016, we’re feeling more confident than ever that we can continue that growth into the new year and beyond.”
* Australian Bureau of Statistics 2016
** Australian Government Review 2016
*** 1) ABS (2016) Counts of Australian Businesses, including Entries and Exits, Jun 2011 to Jun 2015; and 2) ABS (2015) Business Use of Information Technology, 2013-14.
Inside Small Business13