An overwhelming 64 per cent of SMEs believe that the Australian Government should intervene to protect local retailers from overseas online marketplaces such as Temu and Shein.
This was revealed in Sendle’s latest ‘Small Business Survey’, which surveyed small-business leaders across Australia, highlighting the impact overseas marketplaces have on SMEs who are finding it difficult to compete on price amid high interest rates and underlying inflation.
In particular, 48 per cent of SMEs said that these overseas marketplaces are exerting price pressures on their businesses, while 43 per cent said these marketplaces have increased expectations of free shipping among consumers.
“Australian small businesses are concerned about competition from overseas retailers who can sell a broad range of products at very low prices,” said Laura Hill, Managing Director of Sendle. “To attract and keep customers, we have seen a lot of small businesses hunt around for better shipping rates and options, in order to offer free or discounted shipping to customers.”
Shipping as key strategy
Shipping has been identified as a critical strategy to win customers over, with 24 per cent of SMEs saying that online sites have an unfair advantage with cheaper rates. A lack of affordable and efficient shipping options in regional and rural Australia has also impacted their ability to reach potential customers and compete with larger businesses, with 71 per cent of small businesses wanting to see more shipping in regional and rural areas.
Already, 51 per cent plan to offer free shipping to attract customers this peak sales period from November to December, a 13 per cent increase from the same period in 2023, as well as offering sales discounts and promo offers (45 per cent) and discounted shipping (25 per cent).
But small businesses also seek government action as well. 37 per cent shared that the government should intervene to curb rising shipping costs in Australia, while 33 per cent want to see more competition among carriers. One in two small businesses also want to see more affordable delivery options for overseas shipping.
“Australia Post has a monopoly in regional and rural areas, which has led to less competition and higher shipping rates for small businesses who have no other options,” said Hill. “Limited shipping options make it difficult for small businesses to compete online as customers expect faster and affordable shipping, and eat into their profit margins, making it harder for them to stay ahead in a highly competitive retail industry.”
Cautious optimism
Despite the competition and continued economic uncertainty, SMEs are cautiously optimistic about sales growth this November and December sales period. 30 per cent of SMEs forecast up to 25 per cent revenue growth this peak season in comparison to the same period last year. Only 18 per cent of SMEs are predicting no revenue growth.
Looking ahead to 2025, 35 per cent plan to expand to new markets to grow their businesses. While just over two in five (42 per cent) of small businesses only operate in Australia, 42 per cent expect up to one-quarter of their total sales growth to come from markets outside of Australia in the next 12 months.
“Small businesses are resourceful and resilient, and are looking at how they can market their brands, reach their target audience, and drive sales, even with limited budgets,” explained Hill. “Tapping into new markets can help small businesses to find new customers and boost their bottom line, which is why it’s crucial they can get competitive shipping rates to do this.”
