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For those who think this is addressing a relatively small problem, one of the major Australian banks analysed [1] the accounts of 1 million of its customers (1
by crdb 10y ago
For those who think this is addressing a relatively small problem, one of the major Australian banks analysed [1] the accounts of 1 million of its customers (1 in 22 Australians) in 2011 and found that 74% of e-commerce by revenue was cross-border. Three quarters! In some markets, over 90% of the revenue was from abroad.
It's not just fashion and cosmetics, things like lawn mowers were also getting imported.
Part of the problem was AUD appreciation which put the MSRP of most things a good 50% above the rest of the world. Coupled with high costs in Australia (due to tight labour legislation which helps sustain an egalitarian culture), no Australian retailer could compete. The AUD has weakened substantially since then so I wonder if the picture has changed enough to make GST matter.
Charging GST might help a little bit, but the issue is FX, high local costs, and relatively cheap international shipping. For example, ASOS offers free international shipping so long as you are ready to wait 4 weeks. This is fine with most customers who prefer buying the same jeans for $60 and wait to paying twice as much and having them instantly. They employ only a handful of people in Australia to manage inbound shipments and customs, but it is (was, 3 years ago when I last looked) a significant chunk of their global profits.
That being said, protectionism didn't work out for the Australian car industry.
[1] http://globalmarketsresearch.commbank.com.au/ReportWeb/d13debf3b-701e335e5cad/Onlineretaildata-28-Jul-2011-0008-1.pdf http://globalmarketsresearch.commbank.com.au/ReportWeb/d13de...
- pirocks 10y agoworking link: http://globalmarketsresearch.commbank.com.au/ReportWeb/d13debf3b-701e335e5cad/Onlineretaildata-28-Jul-2011-0008-1.pdf http://globalmarketsresearch.commbank.com.au/ReportWeb/d13de...
- broodbucket 10y agoFYI your link got messed up by a space, might want to edit it
- crdb 10y agoThanks, done.
- manicdee 10y agoOther reasons protectionism didn't work in Australia were Free Trade Agreements where we import cars from eg: Thailand with no duty, but exports to Thailand attract around 70%. Then there was the insistence on manufacturing cheap family cars rather than luxury models, ensuring the production lines would never be profitable. The car industry in Australia looked more like a public capital extraction mechanism than a (heavily subsidised) car building business.
- stephentmcm 10y ago>This is fine with most customers who prefer buying the same jeans for $60 and wait to paying twice as much and having them instantly. This probably hits closest core of this issue. It's not 10% cheaper to buy overseas it's 15%+ cheaper to buy from overseas. I truly hope this policy is managed correctly and we don't spend more than we recover just to make Gerry Harvey happy.
- crdb 10y agoI've seen much more than 15%. The US businesses run regular discounting that can make every day, branded goods as much as 70% cheaper. It doesn't look that way online anymore because many businesses have sprouted up with overseas operations and Australian branding. For example Galaxy Perfume, a .com.au, is owned and operated by Perfume Emporium, a US business. Shipping takes about a week if the warehouse is in Asia, which is OK since Australian post is particularly slow and with the exception of high premium same day delivery services (as offered by, say, The Iconic in big cities) you will wait half a week anyway. The businesses that play by the rules and have a local warehouse can be hilariously off. For example, I recently bought a bunch of shirts from a Jermyn Street shirtmaker's UK website, because it was a good 50% cheaper, even with international shipping to Sydney, than getting them off their Australian one.
- Mao_Zedang 10y agoI am sure if Australian workers agreed to lower minimum wage to US levels then they too could sell products online for less.
- deleted 10y ago[deleted]