The federal government’s decision to apply GST to low-value items worth under $1,000 imported to Australia from international websites may convince more Aussies to shop local, according to latest research.
According to the research released by payments solution provider Adyen, Aussie shoppers say their online shopping habits will change as a direct result of the new GST tariff (in effect as off Monday 2 July) – and their allegiance may swing back to local retailers.
Adyen’s research says two out of three Aussies will now think twice about buying fashion, electronics or furniture from international websites and instead shop local. This would be a big victory for Australian retailers, who lobbied the government to introduce GST on all international online sales to ‘level the playing field’, claiming this was impacting their ability to be competitive.
Michel van Aalten, Country Manager of Adyen, had a chat with Dynamic Business on this latest research.
What does the research mean for Aussie shoppers?
A smaller but significant number (16 per cent) of Australians say the new GST is enough to stop them from purchasing from international websites altogether. Once the tax is introduced, and consumers start to feel the pinch of an extra 10 per cent in their shopping basket, the research suggests we will see a shift in consumer spending habits, looking for more value and choice in Australia.
What does the research mean for Australian retailers- particularly small businesses – how can they capitalise on the GST change?
The research shows two out of three Aussies will now think twice about buying fashion, electronics or furniture from international websites and instead shop local. This would be a big victory for Australian retailers, who lobbied government to introduce GST on all international online sales to ‘level the playing field’, claiming this was impacting their ability to be competitive.
Could you discuss the international reaction to the GST charge – (Amazon’s global store and redirecting Australian customers)
Amazon’s response to the new GST tariff has been an interesting one. Our research suggests Aussies are far more likely to consider domestic retailers with the introduction of the new tax, a notion that has prompted International giants like Amazon to block Australia from its main store as a response. Cost and a wider variety of products were highlighted as two of the key reasons Aussies shop online, so Amazon’s local offering will likely improve or risk domestic sites seizing the opportunity.
Looking ahead – what lessons and insights can small business/ start up retailers learn from the research?
Only time will tell if this GST move will be a win for Aussie retailers. For local retailers to flourish they still need to provide value for money, the broad range of goods comparative to these international retailers, excellent customer service and low-cost or free delivery.