Wednesday, November 10th, 2010

Australia, 10 November 2010 – Australian online retail growth is flourishing and will largely be driven by domestic retailers over the next three years, according to a report issued today by PayPal. Despite a recent surge in overseas spending, driven predominantly by the strength of the Australian dollar, most online retail purchases are local, a trend that is expected to continue as Australian businesses capture more consumer online spend.

PayPal today reveals its research report, ‘eCommerce: Secure Insight’, developed in conjunction with Forrester Research and The Leading Edge. The report provides unprecedented insight into the current state of the ever growing Australian eCommerce market, set to reach AU$36.8 billion by 2013, up from a forecasted figure of AU$26.86 billion for calendar year 2010[1].

Despite concerns about overseas competition, the research shows the time is right for Australian businesses to invest in their online offerings. Australians show a preference to ‘buy Aussie’ with nearly a quarter of Australian adults only shopping online with domestic websites[2]. Indeed, the main driver to overseas shopping is wider choice and selection of goods[3], rather than price, proving Australian retailers really can compete with their international counterparts if they get their strategy right.

Australians are now seeing the true benefits of online retail. Over the last year a number of major Australian retailers have entered the online space, and retailers are beginning to respond to consumer demand by offering broader ranges online along with transparent transaction, shipping and return policies. Another key driver is consumer adoption of new channels and PayPal predicts that web-based mobile devices will be the main driver of growth over the next three years.

PayPal figures demonstrate a 12 fold increase in mobile payments in the last year alone, up from $2.7 million in 2009 to $35 million in 2010[4]. Whilst category growth is forecast to be relatively steady over the next three years at around 10 per cent[5], advances in payment innovations such as micropayments and mobile payments will help to further propel growth in certain sectors such as online video games and news, as publishers learn how to effectively monetise their content.

Frerk-Malte Feller, Managing Director, PayPal, said: “Our research paints a positive picture for domestic retailers and there is a strong call to action for Australian ‘bricks’ to implement comprehensive online strategies. Consumers are no longer looking for an ‘in-store’ or an ‘online’ retail experience, they require retailers to provide an integrated multi-channel experience that is not based on the location of the sale but on the customer experience, be it online, in-store or on a mobile device.”

The research also examines the challenges facing businesses when building their online presence and found they vary significantly amongst large, small and online only retailers. Skills shortages, logistics and challenges with marketing all ranked highly, yet one overriding challenge for all Australian online retailers is delivery and the ability to provide a sophisticated end-to-end solution to consumers. The price, the reliability, the geographic reach and maximum package sizes were all cited as a major headache for online retailers[6].

Feller, continued: “Retailers are embracing the perpetual challenge of delivery and we will see significant investment in this area over the next three years. While costly, making delivery part of the overall experience from branded packaging to easy to understand returns policies are important ways in which online retailers can compete.”

Daniel Roberts, Head of Online, Woolworths, commented: “With proactive management and appropriate carrier relationships, Woolworths online businesses are able to deliver to pretty much the entire population of Australia, across all sizes of item. The lead time for the majority of the population is within 1-2 days, though naturally there are areas of the country that are slower to reach, especially for larger items. One area of opportunity is improving the choice and quality of these services to regional and rural Australia.”

According to Feller, Australian retailers have upped the ante and are capitalising on this growing sector: "Our merchants have come a long way in the past few years, not only in terms of extending their presence online but also in the sophistication of the solutions that are being offered. PayPal is focused on investing in new, fast, innovative, safe and convenient ways to pay online, from 1 – 2 click mobile device transactions to new and innovative micropayment solutions that allow in-context payments for media and entertainment providers. We are dedicated to easing the check-out experience for our 3.5 million active consumers and driving conversion for our 34,000 merchants as they further embrace online retail in the coming years.”


[1] The Business of Australian Online Retail, Forrester Consulting, November 2010

[2] The Leading Edge Research, November 2010

[3] The Leading Edge Research, November 2010

[4] PayPal Australia Research, November 2010

[5] The Business of Australian Online Retail, Forrester Consulting, November 2010

[6] The Business of Australian Online Retail, Forrester Consulting, November 2010

Contact Profile


PayPal is the safer, easier way to pay and get paid online. The service allows anyone to pay without sharing financial information and gives consumers the flexibility to pay in any way they prefer, including through credit cards, bank accounts or account balances. With more than 90 million active accounts in 190 markets and 24 currencies around the world, PayPal enables global e-commerce. The company's open payment platform, PayPal X, allows developers to build innovative payment applications on multiple platforms and devices. PayPal is an eBay company.

The PayPal online payment service is provided to Australian customers by PayPal Australia Pty. Limited ABN 93 111 195 389 ("PayPal") which holds Australian financial services licence number 304962. Before deciding to sign-up or use the PayPal service you should consider the Product Disclosure Statement, available at This media release is provided for information purposes only and is not intended as financial product advice.

For more information on PayPal in Australia, please visit or contact:

Jenny Sumner
P: 02 9291 3337
M: 0434 180 072


PayPal, e-Commernce, retail, online retail, ecommerce



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