SYDNEY, 20 July 2010 – Australia’s consumer eCommerce market is underdeveloped, lagging both the US and UK markets by approximately three years according to the latest eCommerce analysis issued by consulting company, Frost & Sullivan. Online retail consumer spending in Australia in 2010 is expected to account for approximately five per cent of total retail sales, however if spending on overseas sites is excluded, this drops to around three per cent. In contrast, online as a percentage of total retail spend (domestic only) is over five per cent in both the US and UK.

The report, Australian eCommerce Market 2010, analyses consumer online purchasing of tangible products. It includes the results of a survey of more than 1,000 active online consumers to provide purchasing information relating to five product categories: electronics, computers, books and CDs/DVDs, jewellery and fashion accessories, and clothing and footwear.

Total consumer eCommerce expenditure in the 2010 calendar year, excluding online services such online ticketing and events, travel, music downloads and financial services, is forecast to reach A$12 billion. This equates to per capita expenditure of approximately A$536 per year, which is slightly behind the US and UK markets. Expenditure is predicted to show moderate growth over the next four years, rising to A$17.7 billion by 2014 with a compound annual growth rate of 10.2 per cent. While the number of local e-tailers entering the Australian market has increased significantly in the last five years, there has been no corresponding increase in the volume of local transactions. The report notes that a significant proportion of new entrants fail to succeed over the long term.

A key reason for the lag in local activity is the lack of online presence by many of the large retail chains and department stores. Despite moves by stores including Big W, JB HiFi and Dick Smith, the small number of eCommerce participants and a lack of sufficient internal support from senior management continue to inhibit progress in this area. Frost & Sullivan suggests that the Australian market needs to see the online launch of several retail chains within the next 12 to 24 months to provide the catalyst for further expansion.

Other inhibitors to the development of a local eCommerce market include the strong physical store presence in capital cities and metropolitan areas, and Australian consumers’ limited acceptance of the typical online precursors – mail order and catalogue sales. Security concerns may also be affecting uptake. One in 40 of the survey respondents (2.5 per cent) indicated that their credit or debit card had been stolen in the last 12 months, suggesting that security remains a fundamental issue that needs to be addressed by the eCommerce industry.

The international retailer tactic of targeting Australian consumers by offering localized web services such as product prices and shipping in Australian dollars is paying off. It is estimated that 40 per cent of Australian online shopping expenditure is now conducted on overseas sites. eBay is the dominant online retail player, having successfully evolved from an auction site into a platform for fixed price overseas sellers. Companies such as Amazon.com which are building marketplaces and tools to power other retailers also pose a threat to some Australian vendors.

Consumer behaviour

Survey responses confirm that price is the key driver for shopping online (nominated by 39 per cent of respondents), followed by the convenience of shopping from home (29 per cent). The majority of consumers (58 per cent) showed no preference as to when they shopped, stating that they split their time evenly between weekends and weekdays.

Just over one-fifth of respondents (21 per cent) plan to spend more on online goods over the next 12 months compared to 16 per cent who indicate they intend to spend less. These results are in line with Frost & Sullivan’s forecast for moderate growth over the next four years. The strongest growth is expected in the categories of clothing and footwear, jewellery and fashion accessories, books and CDs/DVDs.

Credit and debit cards are the most popular form of payment method, used for online purchasing by 50 per cent of respondents within the last 12 months. PayPal is the second most preferred method, used by 42 per cent of shoppers.

Most shoppers (64 per cent) will visit a search engine before making a purchasing decision and more than half (57 per cent) seek out product comparison sites, indicating that consumers are increasingly reaching out to specific sites for product research rather than just conducting a general Internet search.

Phil Harpur, Senior Research Manager, Frost & Sullivan, comments, “The number of Australian shoppers using international retail sites confirms that there is a large untapped potential for Australian retailers to develop a local online customer base. However, we are unlikely to see major growth in this sector until more of the big name retailers get online.”

This initiative, which is being rolled out across the Asia Pacific region, allows Australia to be the first country to make the solution readily available to merchants via TNS’ payment gateway. Prior to this integration, businesses on the TNSPay gateway would have to request a custom systems integration to use PayPal.

Over the past five years, transactions through PayPal have grown fivefold and over 30,000 Australian merchants currently offer PayPal as a safe and secure payment option.  The integration within the TNS platform will enable the merchants using the TNSPay gateway to easily offer PayPal as a payment option.

In addition to providing access to PayPal’s 3 million active accounts in Australia, the solution opens the door to merchants seeking opportunities to sell products or services to overseas markets. With more than 84 million active accounts in 190 markets and 24 currencies, PayPal helps merchants drive sales both domestically and internationally.

“The integration with PayPal through TNS, can reduce associated implementation costs for merchants by removing the need for multiple integrations, whilst maintaining consolidated control for reviewing sales, reporting, refunding and Risk Management.” said John Banfield, Senior Vice President & General Manager, Asia Pacific Payments Division, TNS. “TNS prides itself on offering efficient payment solutions and we are excited to bring this additional benefit which offers a more convenient eCommerce experience for our merchants and their customers. This new gateway feature benefits online merchants seeking to expand their offerings and reach new audiences.”

By adding PayPal, TNS offers merchants a comprehensive range of payment types across a single payment gateway solution. As TNS continues to expand its payment gateway presence globally, this agreement delivers the capability for TNS merchants anywhere to accept PayPal.

“We are delighted that TNS merchants can easily integrate PayPal, providing their customers with the benefits of PayPal’s safe and secure payment service,” said Frerk-Malte Feller, Managing Director, PayPal Australia.  “As Australians do more of their shopping online it’s important that they have peace of mind when making a purchase. PayPal keeps financial information private, giving consumers the confidence that their financial information is secure when shopping online.”

The e-commerce industry in Australia has seen rapid growth over the last year and is forecast to reach $AU33.8 billion by 2012 up from $AU24 billion last year.

In the last six months alone, large Australian retailers such as BigW have extended their presence online, providing a significant boost to the industry. As Australian businesses become increasingly engaged online, the conference will also address the future of mobile.  Globally, consumers are expected to spend $119 billion by 2015 through their mobile phones, accounting for about eight percent of all e-commerce activity, making it a valuable channel for retailers.

Mark Harvey, Event Director for Online Retailer, said: “There has been huge interest in the 2010 conference and a clear desire from Australian retailers to build, expand and improve their online offerings both online and increasing on mobile. We are dedicated to helping retailers and e-commerce professionals to grow and shape the future of e-retailing in Australia.”

PayPal Australia is in full support of the conference initiatives but warns that Australian retailers need to take better advantage of the opportunities online in order to fend off increasing competition from overseas.

Frerk-Malte Feller, Managing Director, PayPal, said: “Whilst the Australian eCommerce industry is growing, it is still significantly lagging behind the rest of the world with Australia’s domestic retail spend online half of what it is in countries such as the UK and USA.  As Australian retailers struggle to build effective online presence, overseas competitors are taking advantage of the gap in the Australian market and are currently taking around 40 per cent of Australia’s online retail spend.”

Several factors have been responsible for the slower uptake of e-tail amongst Australian consumers. While the cost of shipping, long delivery times and poor selection of items available in online stores have prevented some consumers from shopping online, concerns around the security of transactions remains the number one concern to consumers shopping online today.

Feller continued: “There is a huge opportunity for retailers to capitalise on the growing online marketplace in Australia. In the last six months alone the average consumer spent $1,223 on online shopping, an increase of $130 from the second half of 2009.”

According to Feller, the future of Australian e-commerce is incredibly exciting: “We have come a long way in the last few years.  PayPal now has over 30,000 active business accounts registered to send and receive money and I expect to see this number grow rapidly over the coming year as more Australian businesses build a presence online. We believe that the future of money is mobile as consumers seek to make payments from any connected device – be it a laptop or mobile phone today or a TV or a refrigerator tomorrow.”

Exposing the financial harm that online identity (ID) fraud can cause average Australians, the VeriSign Online Fraud Barometer released today shows that one in 10 Australians that use the Internet (13,710,000 people) have lost an average of $1,000 to criminals and fraudster in the past twelve months.

The VeriSign Online Fraud Barometer, compiled by Galaxy Research, shows that the financial loss over the past twelve months totals a massive $1.286 billion and that $200 million is yet to be recovered by individuals who have fallen victim to online ID fraud. Fraudulent emails and websites are the most likely source of this identity theft with 60 percent of Australians coming across one of these in the past twelve months.

“The cost of online ID fraud in Australia really hits home when we consider that these are everyday Australians whose hard earned cash disappears into thin air when online criminals steal important personal and account details,” said Jim Drake, General Manager for Asia Pacific, VeriSign.

The VeriSign Online Fraud Barometer is an assessment of the online fraud landscape, measuring Australians’ vulnerability to and experience of online ID fraud. Similar research has been carried out overseas with results in the United Kingdom showing a comparable number of online ID fraud victims.

The results also revealed that complacency plays a major part in online ID fraud with 69 percent of 18-24 year old Australians admitting to not checking for enhanced security every time they provide sensitive information such as banking and credit card details.

Most alarming was the figure in the VeriSign Online Fraud Barometer that revealed only half of online ID fraud victims check for enhanced security, despite already being stung by these scams. Failure to identify enhanced security measures such as a padlock icon, green bar or the VeriSign tick can lead to a higher incidence of online ID fraud.

Those most affected by online ID fraud include 18-24 year olds and South Australian residents with these groups averaging losses of $1,619 and $1,511 respectively in the past twelve months. Australians who responded to a fraudulent email or website also paid dearly with an average financial loss of $1,185 per person.

In the most serious cases of online ID fraud during the past twelve months, one in 10 Australian victims expect to never recover their lost money with this sentiment strongest amongst 18-24 year olds and low income earners (earn less than $40,000 per annum).

“There are many factors at play when criminals strike online and Australians may not realise they have been duped until months later when their credit card statement arrives,” added Drake. “The best way for Australians to stay safe online is to make sure they’re always checking for enhanced security when submitting personal information.”

The following groups lead the nation as the most ‘cyber savvy’ Internet users;

• 50+ Australians with 45 percent of this group always checking for enhanced security before inputting any personal details
• Internet users in Queensland represent the most cautious state with 43 percent keeping an eye out for online safeguards
• Higher income earners (those that earn between $70,000 and $90,000 per annum) are also vigilant online with 39 percent always checking for enhanced security

The results of the VeriSign Online Fraud Barometer highlight an increased need for education and awareness of the potential financial damage of online ID fraud. Additionally, industry experts have called for a greater onus to be placed on financial institutions and other major online organisations to provide greater visibility of enhanced security measures so Australians can perform all their online activities with confidence.

“The results of the VeriSign Online Fraud Barometer show that Australians are more vulnerable than they think and that too many Internet users have fallen victim to criminals online,” says Alastair MacGibbon, founder of the Internet Safety Institute. “It’s a fact that Internet users respond well when websites tell them about enhanced security measures they’re employing but we have a lot of educating still to do.”

“It’s in the best interest of organisations that have a major online presence to give Australians the confidence that they have implemented enhanced security methods. We are seeing ever increasing levels of sophisticated online scams and fraudsters so online organisations need to be continually vigilant to safeguard their users’ important personal and financial information” added Drake.

To find out more about how to avoid online ID fraud, visit https://www.trustthetick.com.

They’ve also released a new clip featuring Mortimer:

Date: Weds,  30 June  2010
From: Matt Rutledge (CEO – Woot.com)
To: All Woot Employees
Subject: Woot and Amazon

I know I say this every time I find a picture of an adorable kitten, but please set aside 20 minutes to carefully read this entire email. Today is a big day in Woot history. This morning, I woke up to find Jeff Bezos the Mighty had seized our magic sword. Using the Arthurian model as a corporate structure was something our CFO had warned against from the very beginning, but now that’s water under the bridge. What is important is that our company is on the verge of becoming a part of the Amazon.com dynasty. And our plans for Grail.Woot are on indefinite hold.

Over the next few days, you will probably read headlines that say “Matt Rutledge revealed to be monstrous pseudo-human creation of Jeff Bezos.” You might even see this photo making the rounds. Rest assured that these rumors have nothing to do with our final decision. We think now is the right time to join with Amazon because, quite simply, every company that becomes a subsidiary gets two free downloads until the end of July, and we very much need that new thing with Trent Reznor’s wife on our iPods.

Other than that, we plan to continue to run Woot the way we have always run Woot – with a wall of ideas and a dartboard. From a practical point of view, it will be as if we are simply adding one person to the organizational hierarchy, except that one person will just happen to be a billion-dollar company that could buy and sell each and every one of you like you were office furniture. Nevertheless, don’t worry that our culture will suddenly take a leap forward and become cutting-edge. We’re still going to be the same old bottom-feeders our customers and readers have come to know and love, and each and every one of their pre-written insult macros will still be just as valid in a week, two weeks, or even next year. For Woot, our vision remains the same: somehow earning a living on snarky commentary and junk.

We are excited about doing this for all sorts of reasons. One, our business model is so vague that there’s no way Amazon can possibly change what it is we’re truly doing: preparing the way for the rise of the Lava Men in 2012. Also, our deal means that Jason Toon will finally be released from that Mexican jail owned by Zappos honcho Tony Hsieh. No, don’t lie, Tony, we’ve seen the paperwork. And we need a powerful ally in case Steve Jobs finally breaks down and comes after us for all our Apple jokes over the years. Don’t think of it as a buyout; think of it as NATO!

I will go through each of the above points in more detail later, but first, let me get to the top 5 burning questions that I’m guessing many of you will have.

TOP 5 BURNING QUESTIONS:

Q: F1RST!!!!
A: Okay, that’s not a question, but it is a good place to mention that our forums will still be policed by a team of moderators, as before. And also, Woot’s previous and always-in-effect privacy policy will still be just as always-in-effect, so don’t worry, there are no plans to suddenly give up or merge your forum data.

Q: Is Snapster leaving?
A: Are you kidding? He’s out the door about ten seconds after that check clea- that is to say, Snapster will continue as Woot.com CEO, just like before, and the rest of our staff’s not going anywhere either. Woot and all our various sites will continue to be an independently operated company full of horrible, useless products and an untalented jerkface writing staff, same as it ever was.

Q: Will the Woot culture change?
A: Amazon is interested in us because they recognize the value of our people, our brand, and our unique style of deep-tissue, toxin-releasing massage. And they don’t want to start changing things now. Amazon’s hoping our nutty Woot steez continues to grow and develop (and perhaps even rubs off on them a little). They’re not looking to have their folks come in and run Woot unless we ask them to, which incidentally you can do by turning off the bathroom lights and saying the word “Kindle” three times; a helpful Amazon employee will appear in the mirror. That said, Amazon clearly knows what they’re doing in a lot of areas, so we’re geeked about the opportunities to tap into that knowledge and those resources, especially on the technology side. This is about making the Woot brand, culture, and business even stronger than it is today, and we expect that any changes will be for the better or we wouldn’t bother with this endless paperwork.

Q: Where can I get one of those vuvuzelas?
A: Are you even paying attention?

Several months ago, when we were all sitting on Jeff Bezos’s bumper drinking orange Mad Dog and trying not to be noticed, we heard a voice in the distance yelling “You kids better not scratch my Mercedes or I’m calling the cops!” We ran. It was later that night when Amazon came by the house and said they liked our style and also wanted to get that money we owed them for messing up the chrome. We like to think that our relationship with Amazon will continue at this level for many, many, many years to come.

But we here at Woot are still a thoughtful company, so, at the end of the day, I watched the sunset, and its golden-hued glory made me think about two questions:

1) Is there really a universal deity?

2) Does such a thing preclude free will or are we humans in control of our own destiny?

After spending a lot of time falling asleep at the library while facing the philosophy books, I determined that the concept of destiny is a construct that allows man a gentle release from facing the terror of his existence, and that a Hyundai full of twenties would pretty much offer the same benefits. And so, I ultimately said YES!

This is definitely an emotional day for me. The feelings I’m experiencing are similar to what I felt in college on graduation day: excitement about getting a check from my folks combined with nausea from a hellacious bender the night before. I remember fondly that time when an RA turned on the lights and yelled “WHO OWNS THESE PANTS?” Except this time, the pants are a company, and the RA is you, and the sixty five hours of community service is a deal that will ensure the Woot.com experience can continue to grow for years and years and years, like a black mold behind the Gold Box. Join us, because together, we can rule the galaxy as father and son. Also, there will be six muffins waiting in the company break room, courtesy of the nice folks at Amazon.com. Welcome to the family!

Matt Rutledge
CEO, Woot

A payclick account – which can be funded from any Visa, MasterCard or bank account – enables consumers to pay online without sharing personal details or financial information with sellers.

Part of Visa’s global innovation strategy, payclick has been developed to respond to the needs of consumers and sellers of lower priced downloadable content. Analysis undertaken by Investment Trends indicates that there will be some $646 million of online micropayments (online transactions under $20) in Australia during 2010 across the online gaming, music and micro retail sectors1

Today, Big Pond Games, Big Pond Music, Flexischools, Habbo, iTunes and Kids Help Line were announced as the first sellers to accept payclick.

Chris Clark, General Manager Visa, Australia, New Zealand and South Pacific, said: “Visa has been making ecommerce payments as safe, reliable and convenient as possible since the advent of online shopping. With global ecommerce continuing to grow at more than 10 percent2 annually, payclick continues this process. We know consumers seek convenience, security and value when shopping online – and payclick offers a secure way to pay.”

Greg Storey, General Manager, payclick, said: “payclick is designed to meet growing consumer demand for digital content, such as music, games and movies. payclick accounts are suitable for the different needs of family members, including those under 18 years old..

“We are providing a solution for sellers to monetise their content and services. We see payclick’s potential to expand their market reach and unlock new revenue streams. We are confident payclick’s benefits will inspire many more online sellers to explore how our system can help them connect with new customers.”

For consumers, payclick offers:

• payclick provides consumers with a single, commonly accepted account – one password to authorise purchases from a range of sellers
• The ‘Sponsored Account’ feature enables parents to set up accounts for their teens, allowing them to buy online safely and securely while parents control the amount spent and monitor purchases
• The choice of how to fund their payclick account, using a Visa, MasterCard or bank account
• Once an account is set up, the customer clicks the payclick button on participating merchant sites and enters a password to authorise their purchase
• An automated top-up function to transfer funds to the account on a regular basis
• A detailed transaction history that helps users track their online purchases
• Express purchasing options that help further streamline the buying experience

For sellers, key features include:

• payclick is a new, easy way to pay, with accounts suitable for the different needs of family members including under 18 years
• payclick has been developed specifically to make selling lower priced digital content easier and more profitable
• payclick provides increased security and efficiency by managing all sensitive card or bank account information
• payclick has automated dispute handling to resolve issues quickly and cost-effectively.

The transaction, if completed, would deliver to Telstra a post-tax net present value of approximately $11 billion. This includes payment for the decommissioning of Telstra’s copper network and cable broadband service, use of Telstra’s infrastructure, and the value to Telstra of avoiding costs, including certain Universal Service Obligation (USO) costs. Payments would be made progressively to Telstra.

The transaction would see Telstra progressively migrate its voice and broadband traffic from its copper and cable networks to NBN Co’s network as it is rolled out. Telstra will continue to use its cable network to meet its pay TV contract with FOXTEL.

Telstra Chairman Catherine Livingstone said the milestone was encouraging after a year of complex negotiations.

“The Heads of Agreement is consistent with the Government’s high-speed broadband vision and desired industry structure. This agreement reflects a commitment by all parties to reaching a mutually beneficial outcome for Telstra investors, customers, employees and the industry,” Ms Livingstone said.

Telstra Chief Executive Officer David Thodey said: “We will continue to work with the Government and NBN Co on the detail required to implement the principles agreed today. While today’s agreement is an important step, a very significant amount of work must still be done on many complex issues.”

These issues are as diverse as migration processes, taxation, the future of legacy regulations applying to Telstra and the consequences of any major changes to the NBN rollout schedule.

While the Government is not a party to the Heads of Agreement, Telstra has received written confirmation from the Prime Minister that Telstra would be able to bid for Long Term Evolution (LTE) wireless spectrum should the transaction be completed and that sufficient regulatory certainty will be provided on a range of matters for NBN Co and Telstra to enable the transaction to proceed.

In addition to requiring shareholder approval, the Heads of Agreement has a range of conditions, including the passage of necessary enabling legislation and ACCC approval. Accordingly, there can be no guarantee at this time that the transaction will progress to completion.

The Heads of Agreement provides the framework for definitive agreements to be negotiated over the coming months. Should those agreements be finalised Telstra expects they would be put to shareholders in the first half of calendar 2011. Shareholders and investors would receive comprehensive detail in relation to the definitive agreements and an independent expert’s report on the transaction well before the shareholder vote.

Since 2005, PayPal’s merchant services division has grown ten-fold, with more than half of the top 100 Australian online retailers currently offering PayPal as a payment option.  Australian merchants currently offering PayPal include JB Hi-Fi, Big W, Roses Only, Dick Smith Electronics, Hoyts, Borders, Flight Centre, DealsDirect, Optus and Telstra.

Commenting on her new role, Elena said: “I am delighted to be joining PayPal at this exciting period of merchant acquisition and product innovation.  Aside from managing our growth, the main priority of my role will be to continue to provide PayPal’s 30,000 current Australian merchant partners, both big and small, with a secure and innovative online payments solution and to help grow their eCommerce offerings.”

“As more Australian businesses develop their online offerings to drive business growth both locally and internationally, PayPal enables merchants of all sizes to transact online in a safe and secure way.  I look forward to working with the team to bring the PayPal solution to new Australian merchants,” said Elena.

Elena brings with her a wealth of experience, having joined PayPal Australia from American Express, where she was Vice President, B2B, Asia Pacific and Japan.  In this role, which she held from 2005, Elena led the expansion of American Express into Business to Business payments in the Asia Pacific region.

Between 2000 and 2004, Elena was Head of Interactive Services at American Express, also in Asia Pacific and Japan, where she was the strategic lead on all interactive functions for the merchant business in the Japan Asia Pacific region.

Frerk-Malte Feller, Managing Director, PayPal Australia said: “We are delighted to have Elena on board.   We are committed to representing the interests of our 3 million active customer accounts in Australia, by improving and growing the number of Australian merchants using PayPal.”

“Elena will help us to continue to offer our merchants the ability to easily provide customers the benefits of a safe and secure payment service.  As more Australian businesses build their presence online, we are confident of the future growth of our merchant services division.”

It is understood the online mall will be led by fashion, which the company sees as its strongest attraction, and split into categories including electronics and books.

Content on the web is blossoming. It’s growing not just in size and numbers but with the advent of video, images, news and real-time updates, the average webpage is richer and more complex. In addition, people’s expectations for search are higher than they used to be. Searchers want to find the latest relevant content and publishers expect to be found the instant they publish.

Mikal Belicove asked Googler, Matt Cutts  how this will impact businesses:

“The main difference is that businesses will see searchers arriving faster on their websites because Caffeine can index pages much more quickly than our previous system. The nice thing is that Google users will see fresher results without users (or business owners) needing to do anything special.

Business owners can find ways to put this additional freshness to work for them. For example, owners might want to consider putting limited-time promotions on their website, since people will be able to find those promotions more quickly while they still apply.”