By Aimee Chanthadavong

It is intuitive to assume that the strong Australian dollar is driving sales on overseas online shopping; however research from PayPal suggests otherwise.

Commenting on the results of PayPal’s ‘eCommerce: Secure Insight’ report, Frerk-Malte Feller, PayPal managing director, said overseas retailers are winning over domestic retailers because of greater product offering.

“People are shopping from New York or LA or in London because of the strong Aussie dollar but that’s not the primary reason why Australians are shopping overseas. It’s because range offering of products overseas cannot be bought online in Australia and that’s the primary driver,” he said.

“And that behaviour is supercharged by the strong Aussie dollar. We’ve seen about 74 per cent more money spent overseas with PayPal in the last year alone.”

The study, which was carried out in conjunction with Forrester Research and The Leading Edge, also showed that while there’s a surge in overseas online shopping, domestically eCommerce is also growing rapidly.

“Online retailing in Australia is booming,” Steven Noble, Forrester Consulting senior analyst, said.

According to Forrester’s study, which surveyed 114 Australian online retail professionals, has predicted that the overall Australian online retail will reach $36.81 billion by 2013.

“If we look at the stage of the market today it growing quite rapidly and that the growth of eCommerce is being driven by a healthy domestic eCommerce,” Feller said.

“This growth has accelerated in the last three years where in the GFC growth rates were single digits and now growth rates have accelerated to double digits and we expect that trend to continue.”

With travel and groceries combined making up almost half of all Australian online retail, the study reveals that as Australians see the benefits of online retail, more retailers are beginning to respond to consumer demand by offering broader ranges online along with transparent transaction, shipping and return policies.

Despite this boom, Australian online retailers continue to face challenges including trying to recruit and retain skilled staff, managing logistics and controlling the relative cost.

Nobles said the reason for this is because multichannel retailers are still traditional retailers first.

“Despite the boom retailers will face many challenges as many will still make most of their sales through stores. Of the 40 multichannel retailers that felt able to estimate their sales were split across channels, 31 said that online channels accounted for 30 per cent or less of their total sales,” he said.

“What’s more, 24 said they expected online channels to still account for 30 per cent of less of their total sales in the year ahead.”