Is it really worth repeating? Social media is transforming our use of the web.

It has definitely taken a prominent place in a few years, becoming a way of communication in our business. Social media has changed the customer relationship through a multitude of possibilities that no other communication medium not made previously possible. This way of communication allows companies to collect information about customers’ needs and information. Businesses can communicate directly with customers and maintain a good image.

But the results differ in each country. Australian surfers are catching up in terms of use of social networks. According a study from a company specialised in audience measurement online, about 75% of Australians used a social media last June. According to yellow social media report, social media growth was used to be driven by younger demographics, but now the growth is being driven by older demographic groups. Social media expert Joanne Jacobs delivered a keynote during one of our lectures on Sept 23rd, and her conclusion were that Australians are really late in social networks.

Let’s take a look to some figures to understand better the impact of Internet in Australia:

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Due to low access quality on the connectivity, Australians do not use social media as they would like. Wireless Internet is better suited to the more rural areas of Australia due to the larger distances and lower population density, which make traditional lines costly. For instance, there is one hour flying for Sydney to Melbourne, which are two cities in the South of Australia. Just to have an idea of the cost of Australasian average monthly broadband access: in France, we pay monthly about $20, in Australia; it is $50, that’s amazing. Furthermore, the engagement of the community is really small compared to other countries as UK. Communities in Melbourne, Sydney or Adelaïde are not communicating with each other because of the distance. That’s why the geographical barrier in Australia is a problem and explains why Australians are lagging behind in terms of social media usage.

Is it possible for foreign companies to do business in Australia?

As we saw previously, the quality of the connectivity is a real issue in Australia both for customers and businesses. Despite this trouble, companies really want to invest in social media in order to increase their sales. It is true that it is easier to buy via Internet instead of the shopping centre. Moreover, customer reviews are very important for Australians. They trust more each other rather than the advertisements. Social media is a real opportunity for customers to share their opinion (for a product, a service, a brand…). For that reason, this is a good channel for companies to advertise and be well known.

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However, one of the barriers of entry would be taxation on online sales in Australia. Indeed, the federal government has decided to tax overseas online service in order to privilege domestic online retailers. There is a strong lobbying in Australia to tax online sales. Have a look to this short video, which will explain to you how the tax in Australia is working. For your information, GST is the equivalent of the “TVA” in European Union.

http://www.news.com.au/video/id-I0aDVtcjoazEx1lslhSr5yrqzVmIRXgW/Online-shopping-could-cost-more

Australian businesses have understood that the presence on social media is really necessary in order to be known by consumers. Indeed, globally, about 54% of companies confirm their presence on social media (36% of the small companies, 48% of medium companies and 77% of the large companies). This is a real opportunity for foreign companies to invest in Australia; firstly, for the location of the country and secondly, as a matter of competitive challenge as investors increasingly want to invest in that territory.

To conclude, we can say that there is a link between social media and businesses in Australia.

A revolution for brands but also for consumers, strong of a new power: the power to make direct contact with them. This wake-up call for Australians and businesses is really essential in order to increase purchases online. However, the Australians government does not facilitate foreign players because it imposes a tax on them online shopping. Regulatory constraints are a real issue for foreign businesses wishing to invest and sale in Australia. In order to be faced to the competition and to have a long term strategy, it is a fine opportunity for foreign companies to invest in this part of the world. However, the long distances and low access to internet must be an important difficulty to success in Australia.

Sources:

Social Media, an Australian routine

Sensis Social Media Report May 2015