Shopping online for overseas goods

Online shopping goes viral as Australians look for a better deal offshore.
 
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02.Local retailers

Australian retail is not taking this lying down. Some shops have started charging up to a $50 “try-on” fee to discourage customers from trying on items for fit and ordering them from overseas at a lower price. (The fee is dropped if the customer buys the product.)

Both the NRA's Gary Black and PayPal spokesperson Adrian Christie cite overseas competition as a major reason Australian online retail has upped its game over the past year. Christie says local mainstays such as Bing Lee, Big W, JB Hi-Fi and Country Road have significantly upgraded their websites.

 

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Online-shopping-overseas-websites-number-crunch_250wx250hSpoiled for choice

That doesn’t mean products sold in Australia have gotten any cheaper, but some say price is not the whole story.

Christie told CHOICE the overriding motive is better selection, not savings, and that a core group has been behind the offshore buying spree. “There are some very savvy online shoppers who have been driving overseas sales, the same types who rush out to the stores for Boxing Day sales. They’re out there, but that’s just a small part of the total volume, and the buying spree driven by the favourable exchange rate has already peaked. ”

Christie says overseas sales made through PayPal grew by a full percentage point with each one cent gain as the Aussie dollar went from 85c to 92c against the greenback, but the pattern didn’t hold as the dollar climbed from 92c to $1.10 in early May. A recent Australian Communications and Media Authority (ACMA) report says 56% of consumers surveyed said they shopped overseas websites for products that weren’t available here, while 41% said cheaper prices was the motive. The report also says Australians would rather shop at Australian stores.

But consumer feedback received by CHOICE tells a different story. In a May survey of about 3000 CHOICE members asking about online shopping habits, almost 50% more chose price than selection as a reason they shop overseas; and in a May poll asking about price, respondents cited dramatic differences between Aussie retailers and offshore websites for a range of their favourite online purchases. In addition, the Australia Institute conducted a survey of nearly 1500 Australians in March that concluded that the online retail boom “is overwhelmingly being driven by people wanting to save money”.

Third parties open doors to overseas shopping

Prior to the current online boom, it had been difficult – and sometimes impossible – to shop in the US from the other side of the planet unless you had a US credit card and shipping address. Other shopping destinations posed similar challenges.

Australians have been using third party transaction and delivery services such as PayPal’s HopShopGo, US-based Shipito and MyUS.com or Australian-based Price USA to get around this, but their services are becoming less necessary. So far there do not seem to be any equivalent UK services, but many UK online retailers ship to Australia. A growing number of overseas stores have adjusted their policies to allow Australians to shop with them directly. 

A recent case in point is the introduction of ShopStyle to Australia in May. The site offers shopping at the likes of Saks Fifth Avenue, Barneys New York and other high-end retailers from around the world and lets you customise your search for retailers that ship to Australia. And one of Australia’s favourite overseas online destinations, UK fashion retailer asos.com, offers free shipping standard to Australia with a 6-12 day arrival window.

But be warned: overseas retailers are well aware of the exchange-rate advantage and are not above a little price gouging of their own. For example, a Canon G12 camera available here for $649 (at a suburban electronics store) was available at US retailer Ritz Camera for AUD$600 in late May if priced as an Australian buyer. Meanwhile, the price for US-based consumers was US$500 (AUD$469). Then again, we found the same camera at another US retailer, 42nd St Photo, for US$477 regardless of where you’re shopping from. (The Aussie dollar was worth $US1.06 when we made the comparison, bringing the price down to $449, excluding shipping costs.)

CHOICE verdict

With Australians expected to spend $34 billion online in 2012, about $14.6 billion of this could be spent overseas if the trend continues. The future of Aussie retail may be at a crossroads as well. Better-functioning Australian websites with greater selection may bring in more business for local online retailers in the coming months, but price may be the deciding factor in the end. As Peter Prysten puts it, “this disparity is very difficult to explain”.

Online buying fraud - how to avoid getting scammed

Fear of getting ripped off is one of top reasons Australians avoid shopping online. To avoid getting fleeced:

  • Never give your personal password to anyone, including the business that helped you set it up. Legitimate businesses don’t ask for security details via email or phone.
  • Have up-to-date anti-virus, anti-malware, anti-spyware software on your computer.
  • Do not use the same password for different sites, and create strong passwords with a combination of letters and digits.
  • Only buy from websites that encrypt your payment details. You can tell by the https:// in the address bar (instead of http://) and a small padlock symbol on the bottom right of the browser. If something doesn’t look right, click on the padlock to view the SSL certificate and check that the owner matches the online shop and that the certificate has not expired.
  • If a website is unfamiliar, research the company, read buyer reviews, call the contact number, and check the refund, returns, privacy, delivery and guarantee policies.
  • Always re-check that the domain name matches the website. For example www.cols.com.au might be a fraudulent copy of www.coles.com.au
 
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