Part of the appeal of ecommerce has always been how it internationalises the options for buying and selling. Whilst it’s not always entirely frictionless to trade across borders, a whole lot of choice and exciting products are available to shoppers. And, from a seller perspective, you get access to a greatly increased pool of buyers.
And that’s certainly part of the appeal of Amazon, in particular, specifically from a merchant perspective. It’s relatively easy to start selling to multiple countries and build an international customer base by plugging into their various networks and marketplaces. But that’s not necessarily part of the Amazon Australia appeal and that appears to be proving good news for eBay down under.
Amazon successfully launched its Australian marketplace in December 2017 in the last few weeks before Christmas, and they made Prime available to merchants subsequently. But the launch of GST in Australia forced a change of strategy and affects Aussie shoppers who wanted to buy overseas.
The GST (Goods and Services Tax) of 10% came into force on the 1st of July and is levied on any and all goods being imported into Australia that are bought from overseas. We wrote about the development before here.
Amazon’s response to GST was surprising: rather than have shoppers pay extra or make sellers onerously administer the tax for the Australian government, Amazon just stopped shoppers from buying from their overseas websites. Australians choice was greatly diminished but the problem of the tax was resolved, from Amazon’s perspective.
eBay took a different approach and have built a system that calculates and collects the GST from buyers on a seller’s behalf and pays it to the Australian government. And, according to reports, the new initiative has been a success.
It was a big change and it was a global change that needed to be done. A lot of people worked on it, a lot of different teams. We’re really proud that we hit the July 1 deadline. All of our sites have accelerated.
– Tim MacKinnon, Managing Director, eBay Australia
eBay Australia has also revealed that the developments were led by the team at HQ in San Jose California and weren’t hurt by also offering Australian shoppers a 10% discount when buying from the British and American marketplace during the first week of July. The initiative helped encourage more Australians to shop internationally using eBay. The article above is well worth a read and just goes to show that there remains great thirst for international shopping in some locales.