Friday, June 27, 2008

Australia's Per Capita Excellence - #2 on Internet Spend!

I don't know why, but Australia has an amazing amount of "per-capita" excellence. Now, part of scoring high on any "per-capita" ranking is to have very few people (the Vatican always seems to do well), but with 21m people Australia is big enough that some very real factors come into play. An example of both of this is the fact that, on a per-capita basis, Australia came in 3rd in the 2004 Olympics (with 49 medals - the US was 34th with 103 medals); however, it was behind the Bahamas (with 2 medals) and Norway (with 6).

However, in another very real way Australia has shown itself to dominate the world stage, and this is on internet spend per capita. A really interesting post on Techcrunch discusses potential valuations of social networking sites (the few comments on DCF are especially entertaining). But the part that I found particularly interesting was the following bit, showing the average internet spend per person for a given country:

The U.S. (at $132 per person), by the way, is only the 4th most valuable market per Internet user, trailing The UK ($213), Australia ($148) and Denmark ($144).

So, Australia has the second highest per-capita internet spend in the world. This is interesting. The time that I've spent here has given me some insights to why this may be. First off, the power of the internet is as the great market leveler. The more inefficient a market, the more likely the impact of the internet can be. Due to Australia's size and distance from major markets, it has been my experience that price competition in Australia between retailers is, shall we say, far from fierce (the car I purchased in Australia cost almost 2x what it would have in the US, for example). Being savvy people, this turns many Australians, where they can, to purchase products off the internet in larger numbers than would be the case when retailers would be more price competitive. That's at least my current theory. There may be other factors, but it's certainly interesting to discover that this country, which is a huge adopter of other types of technologies (internet penetration, mobile phone use, etc) is #2 on per-capita Internet spend.

1 comment:

Sara Goldstein said...

I'm actually quite surprised that Australians' online spending is so high.

When we were conducting market research for our business in Australia, we heard again and again that people didn't shop online for clothing and didn't want to. That's partly why we moved our business to America.

However, my husband Merc is one person of the many people who told me that he's never bought any clothing online and never will. I had to remind him that all his T-shirt Hell purchases were made online -- in his mind, they evidently don't count. I wonder how many other people I interviewed had conveniently forgotten things they had bought online?

In general, Australians are quick to adopt new technologies (and our academics are typically ahead of the curve too) but our overly conservative business culture holds us back. In retail, the Woolworths / Coles Myer duopoly -- they jointly control 70% of all retail sales in Australia -- has been a real innovation killer.

No wonder Australians would turn to the 'net for a better shopping experience!