This annual publication offers a wealth of information on the trends and developments taking place in the m-commerce and c-commerce sectors. The publication provides analyses of the issues surrounding the growth of e-commerce, including e-banking, e-payments and online advertising. Information on mobile commerce developments are also provided, including m-payments and m-banking, included statistics and forecasts for both the e-commerce and m-commerce sectors.
The world in general - and its institutions and businesses in particular - is facing a significant number of challenges ......
There will soon be 9 billion people in the world, and increasingly more of them will participate in the global economy, most likely at less cost. Furthermore, the environment is having difficulty coping with us - whole business sectors are facing digital disruption; healthcare in western economies has an efficiency factor of minus 40% (which, if it goes unchecked, could consume 40% of Australia's GDP by 2040); people are more empowered - they are moving away from traditional behaviour patterns; and new jobs are in the new economy, not the old one.
Governments and traditionally organised businesses and organisations have great problems with these developments. They are unprepared to embark on the essential economic and social transformations that are needed to face up to the challenges.
In essence, in order to transform they will need to operate much more horizontally and be far more truly customer/people-focussed. And ICT can greatly assist in this. To be able to compete with those organisations that have been successful in creating digital productivity it is often necessary to look at ways to remove 50%, or even more, from current business costs. Cannibalisation of traditional services and revenues is also required, with no certainty of new income from new services to compensate for this.
As a result many businesses are fighting rearguard battles rather than leading the charge, and whole sectors are resisting the transformation process (retail, healthcare, education, energy, government).
Would an internet failure result in what economists call a ‘too big to fail' disaster? In other words, will such a collapse be catastrophic for our society and the economy? If the internet fails we cannot go back to the systems that helped us run our lives in the 1950s, when we had only one-third of the population we currently have. We need the right systems to manage our new rapidly changing society and economy.
Very few people fully realise the impact of this population growth in such an incredibly short period. And it is here that the internet plays its most important role - yet technically it was never designed to take on such enormous responsibilities. Resolving the issues surrounding control and governance of the internet is also of fundamental importance to its success in the future. Issues surrounding security and governance are already of concern for emerging sectors like e-health; e-commerce; e-education and e-government.
Among the hottest topics are the issues in relation to the security of the various aspects of the digital economy. Analysts predict that spending on e-security and mobile security will rise sharply and continue to be a key priority.
E-commerce has become a very important area of focus for internet media players, financial institutions and payment-processing firms alike. Given the speed that new services, features and companies appear (and disappear) the e-commerce and m-commerce sectors must be among the most innovative and rapidly evolving sectors worldwide - quite a spectacle to observe.
Person-to-Person email payment has become a hot topic with Google and Square launching services. Banks are also realising the world is changing and social banking is becoming a key trend; and the internet media companies continue to battle for supremacy in this vibrant market.
Mobile commerce is one of the hottest sectors right now and it is gaining importance for a wide range of industries, including telecommunications, IT, finance, retail and the media, as well as for end-users. It works best in those areas where it can emphasise the core virtue of mobile networks - convenience. The enormous success of smart phones is linked to the apps that are available, and increasingly commercial models will be linked to these apps - which will result in further spectacular growth in m-commerce. BuddeComm sees the development of m-wallets as a major breakthrough for the m-payment sector and beyond - that could indeed be a game changer.
Australians are among the world's biggest users of online banking. EFT (electronic funds transfer) is very popular in Australia and the BPAY consortium owned by Australia's Big Four banks is widely used to pay bills. However the more consumer-driven developments, such as m-banking, took longer to emerge. After decades of procrastination, and ultimately pushed by developments from companies such as Apple and Google, the era of m-payments has now taken off in a major way, with all four banks now facing breakneck growth in m-payments. By 2015 it is expected that m-banking will overtake online banking in the number of transactions carried out electronically.
Spending on advertising using digital media channels is continuing to grow in market share, despite economic conditions slowing down the growth of overall advertising spending. In 2014 the advertising sector is focused on the future opportunities offered by multi-screen developments. In other words, a cross-marketing approach involving multiple devices including TV, touchscreen tablets, computers, laptops, mobile phones etc. In addition, advertisers and content developers/providers are eyeing off the potential opportunities offered by the Over-the-Top (OTT) content distributed by smart TVs. Digital marketing as a whole remains a growth area, as marketers shift towards these types of advertising methods at the expense of traditional formats.
The increase in online advertising comes as Australian businesses expand their presence online and aim to see local sales win over from sales made offshore.
The increased use of video advertising and video viewing is - at an increasingly more rapid pace - also continuing in 2014, and will grow consistently for the next five years or so, according to industry trends.
The digital economy affects everybody, including existing players such as telcos, banks, media wholesalers, services and retail. All businesses will eventually need to adapt to the new environment as new players enter these markets from different angles.
This report highlights information from surveys that indicate how well businesses are prepared for the digital economy; where they participate; their strengths and weaknesses; and the first interesting commercial starting points. It provides statistics in text, tabular and easy-to-read chart formats. It also contains detailed statistics from e-business activity usage surveys taken over the last few years.
This indicates a strong acknowledgement of business benefit, including productivity gains and positive growth. It highlights a near unanimous view that active digital economy participation is important to future business success, in spite of a diversity in adoption, planning and sophistication across the business community.
Across Australia more and more users are now shopping online - they are shopping from the comfort of home, while at work and even using mobile devices to impulse-buy. In fact many online retailers are finding mobile is their fastest-growing sales channel, including eBay and Gumtree.
While online sales have been growing at around 20%-30% annually the overall market share is still below 10% of the overall market in 2014. But spending will only increase further in the online markets over the years to 2020 as users take advantage of the higher speeds that the NBN will provide as it is rolled out.
There are many choices from offshore e-tailers offering low-cost deliveries, with onshore businesses that operate a retail web presence providing service and communication at a local level. Low start-up costs and minimal barriers to entry have seen many enterprises, both bricks and mortar stores and online-only stores, operating successfully in the direct sales to consumers market.
In 2013 there were a number of acquisitions - AussieCommerce's purchase of group buying Cudo, and Graysonline's purchase of online department store Oo.com.au are two examples - and consolidation in the Australian online retail sector will continue in 2014.
Data in this report is the latest available at the time of preparation and may not be for the current year.