These international players are anticipated to generate more than $18 billion from Australian shoppers by 2026 as they gain a stronger foothold in the online retail sector. Their rapid growth is driven by aggressive pricing, especially from Temu, which is igniting a price war that is putting significant pressure on mid-sized Australian retailers that are struggling to stay competitive.
Australia’s ecommerce landscape is undergoing rapid change due to low-cost international competitors offering heavy discounts and quicker delivery. This shift is forcing domestic businesses to reconsider their strategies. Online marketplace Kogan, for example, is placing greater emphasis on its private-label brands, particularly focusing on large electronics such as televisions and air conditioners, in an attempt to avoid direct competition with foreign platforms offering ultra-cheap goods.
The broader impact is already being felt. In 2022, Kogan’s total customer spend peaked at $1.2 billion but has since dropped below the $1 billion mark. In contrast, Amazon is forecast to reach $8.5 billion in merchandise value by 2026. This growth is supported by a $25 billion local investment since 2011, with $5 billion of that spent this year alone to improve delivery speed and expand product selection.
Traditional rivals such as eBay are also feeling the strain. Its sales in Australia are expected to decrease from $6.5 billion in 2020 to $3.5 billion by 2025. Other competitors including MyDeal and Catch have already exited the market. Long-standing retailers such as Big W and Myer are at risk of being pushed out if they do not scale quickly or establish a strong niche.
The ecommerce sector is becoming increasingly polarised, with major platforms dominating through price and delivery speed. Meanwhile, remaining players like eBay are focusing on niche products such as collectibles to stay competitive. However, with Temu offering prices up to 70% lower than its competitors, the time for local retailers to carve out a sustainable market position is rapidly narrowing.
