in this opinion piece Jess Ross (pictured below), managing director of Sydney-based digital design studio Wilson Fletcher, argues a distinct lack of competition among Australian businesses is leaving them – particularly digitally-speaking – a long way behind their overseas competitors.
It’s a common refrain: “We’re playing catch up”. “Everyone’s scrambling to get to base camp”. “They’re the only ones to have invested in modernising their platform”. Whether five, eight or 10 years are quoted, it seems Australian businesses universally consider themselves laggards when it comes to digital transformation and the ability to act on opportunities in the digital age.
This is a curious fact when you consider that Australians are a country of early adopters. We rank seventh in the world in terms of internet access and have one of the highest smartphone penetrations in the world (almost 90 per cent of adults by some measures). It’s fair to say that the vast physical distances that need to be traversed as the world’s only nation/continent gives us more impetus than most to invest in and value digital connectivity.
We also have a long history of invention that has produced (among other strokes of genius) icons of Aussie masculinity and grooming such as the two stroke lawnmower, insect repellant and bank notes you can surf with.
It’s easy to argue that the lack of digital innovation from Australian businesses is down to population density, or distance or internet bandwidth. But there is another answer that’s easy to overlook – a straight lack of competition.
Competition is the tangible evidence of addressable opportunity – new competition much more so. So it’s not a big leap to conclude that the lack of competition in Australia encourages Australian businesses to focus inward and defend existing territory instead of embracing the need to reinvent themselves and looking to the horizon for viable digital opportunities to exploit.
There are examples of the effect of this littered all over the digital economy. Online retail is now 20 years old. But even in 2014, 53 per cent of Australian retailers still had no online sales channel at all. It took UK online retailer ASOS, which was once flying four jumbos full of clothing to Australia every week, to jumpstart Australian fashion e-commerce in 2013.
Similarly, streaming services launched in Australia and the US at roughly the same time (2007-8). But it took the threat of Netflix launching here last year for serious investments to be made in the industry with the launch of Stan (jointly owned by Nine and Fairfax), major marketing pushes by Presto and Quickflix and a price slash by Foxtel.
In the US, 63 of the top 100 companies by revenue are less than 30 years old – companies like Google, Apple, Amazon, Facebook that have built their vast businesses by disrupting the previous generation. Consider the impact, for example, of Amazon, the biggest online store on the planet, on Walmart, the world’s largest retailer of any kind. In 2012, Walmart’s $469bn in revenue dwarfed Amazon’s $61bn. But less than 2 per cent of its sales were online. In 2015 Walmart will spend between $1.2 and $1.5 billion on e-commerce globally and even more on digital transformation across the business to enable it to compete with Amazon. Innovations like drone-based delivery, automated re-ordering and goodness knows what else will follow.
In Australia, 18 of our top 100 companies are less than 30 years old. And, when you exclude superannuation, mining and construction, just three remain – Sonic Healthcare (one of the world’s largest medical diagnostics companies, providing laboratory and radiology services), Origin Energy and Virgin Australia.
Without the disruptive influence of significant young challenger brands, it’s easy to see why Australia’s largest companies have not had the impetus to act on the opportunities presented by the digital age. After all, it’s much easier to defend your existing way of doing business than it is to reinvent yourself for the digital world as Walmart is attempting to do. Australia Post, I’m looking at you.
The lack of competition in Australia is well known. But it’s time Australia recognised that it’s not just consumers who are suffering as a result. Business and our national economy suffers too. In today’s world, the Australian market’s lack of competition is a ticking time bomb making it downright dangerous for a business to ignore ideas, technology and knowhow that are readily available in the free market. Doing so is not sustainable. There is bound to be a bold new challenger and an ensuing customer backlash at some point.
To survive and thrive in the digital age, Australian businesses must embrace the need to reinvent the way they do business, to take a good hard look at the pain points of their customers and to explicitly invest in the things that will drive profitability in the future over those that drive dollars today.
Leading Australian market research data brand, RDA Research, provides actionable consumer intelligence to help businesses inform decision making and growth strategies. RDA Research wanted to make its unique consumer data available for addressable digital targeting and required a data onboarding partner to help activate their data in an online environment.
Storytelling agency Enthral has appointed Channel 7 reporter and sports presenter Sean Sowerby as its new senior PR and content manager in Melbourne. Sowerby (pictured) started his award-winning career at 3AW before spending more than 15 years in television. Enthral founder and manager director, Cameron Smith, spoke of the significance of Sowerby joining the agency. […]
This week Nova’s Fitzy & Wippa are celebrating 10 years of their iconic radio show and plenty of famous faces have weighed in on the feat! For Fitzy & Wippa’s 10-year anniversary show they were joined by a bunch of special friends who shared their messages and favourite memories over the last decade. The guys […]
Ever since Google first announced it would be getting rid of third-party cookies on Chrome, digital advertising businesses have been actively sharing their plans for life after cookies. And now programmatic advertising company Blis might have come up with the most creative way to get the message across, in a new video which sees company […]
Integrated Melbourne agency Icon has taken top honours in the 2021 SABRE Awards, winning the coveted Australasian Consultancy of the Year for 2021 along with a host of category and craft awards. Icon led a large field of Australian agencies with a total of three major and seven minor awards, including gold in the cause-related […]
Former agency executives Tim O’Neill and Tim Fouhy have launched the auto technology startup Summon. Australia’s first full e-commerce service for prestige cars. O’Neill and Fouhy both founded Reactive, a digital agency, which was bought by Accenture in 2016. Following the deal, O’Neill and Fouhy ended up leading the company’s digital marketing arm, Accenture Interactive before […]