Mac Wong, Stripe

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Australia at a “tipping point” for marketplace businesses, new Stripe research finds

Mac Wong, Stripe

Adoption of rideshare and food delivery in Australia greater than UK and US, but well behind regional neighbour Singapore

Multi-sided marketplaces are changing how consumers shop, travel, eat and commute in Australia, with more changes to come, according to a new report released by Stripe, a technology company that builds economic infrastructure for the internet.

Using technology to facilitate online transactions between multiple third-party buyers and sellers simultaneously, these online marketplaces — such as Catch.com.au, SEEK, Deliveroo and Vinomofo — are providing consumers with greater convenience in their daily lives, becoming preferred options.

The independent research, conducted by Nielsen for Stripe across nine countries, shows that the rapid rise of marketplaces is driving the next wave of growth online, and identifies the key requirements for success in Australia.

A tipping point for marketplace adoption in Australia

Consumer preferences in Australia show a notable shift. Half of Australians (50 per cent) surveyed said that they prefer using online marketplaces for transportation, hospitality, and food delivery/subscription, versus going direct to taxis, hotels or restaurants. This is higher compared to just 34 per cent and 39 per cent in the UK and US, respectively, but much lower than Singapore, where 73 per cent reported the same.

The research found just over half (51 per cent) of Australians said that they spend more money on online marketplaces nowadays. This is only slightly behind the US (56 per cent) and UK (56 per cent), where many well-known consumer marketplace sectors have been established for longer.

Looking more closely at specific sectors, in the past year 64 per cent of Australians reported using an eCommerce marketplace to buy or sell, nearly a third (31 per cent) reported using hotel or hospitality marketplaces, and about a quarter reported using food delivery (24 per cent) and rideshare services (23 per cent). Only 12 per cent reported using marketplaces for restaurant reservations, compared to other markets like Hong Kong (36 per cent), Denmark (26 per cent) and Singapore (21 per cent), showing opportunity for this category to catch up.  

This research from Stripe makes clear what we all know from personal experience: consumer preferences have changed. Australians have been delighted by the experience offered from local and global marketplaces. We now expect to be able to transact and access most services seamlessly online and via mobile — this is a challenge and an opportunity for businesses both new and old, and those that can offer the best customer experience will win. It’s precisely what we focus on when making a decision on whether to invest in an up-and-coming marketplace business. The most sophisticated founders, that will go on to have greater impact in our economy, have razor focus on customer experience and technology.”
 John Henderson, Partner, Airtree Ventures

Fast, secure and frictionless mobile experiences a key driver

Three quarters (75 per cent) of Australians made a purchase over the internet in the last month, according to the survey. Of particular note is that 48 per cent of people identified digital wallets and regional payment methods like Apple Pay and Android Pay as their preferred payment method for online purchases, compared to 29 per cent listing credit cards, and 19 per cent listing debit cards.

This preference or desire is quite different from the reality — in the past year, only 7 per cent of Australians reported using Apple Pay or Android Pay, and 6 per cent reported using Samsung Pay. However, the economic opportunity for mobile payments in Australia looks promising: 30 per cent of Australians said they would be more likely to visit a website or app if it offered digital wallets like Apple Pay. This figure jumps to 43 per cent for millennials. This suggests a clear opportunity for businesses looking to grow and increase conversions online.

When it comes to ridesharing marketplaces, 85 per cent of reported usage was on mobile devices. This was 61 per cent for food delivery, 27 per cent for hotels and hospitality and 26 per cent for eCommerce marketplaces.

The research found that fast, secure and frictionless mobile experiences have been key in driving these changing consumer behaviours and preferences, with Australians looking for these experiences at check out. Half of those surveyed said they will leave a website or app without purchasing anything if it takes too long to enter payment information, and 70 per cent said it’s important to not have to enter their credit card details every time they make a purchase. In fact, 22 per cent stated that if a website or app doesn’t remember their credit card, they will leave without purchasing anything.

It takes many ingredients to make a successful consumer business like Deliveroo. For our consumers, the experience needs to be smooth and exciting, for riders, work needs to remain flexible, and for restaurants, our partnership needs to be seamless. This is what our tech developments are focused on. It’s critical we continue to provide the most frictionless, attractive and convenient experience for our consumers and all those we work with.”  Levi Aron, Country Manager Australia, Deliveroo

Our goal is to provide the best in-stock products and a long list of marketplace options across all categories, so creating personalised, seamless shopping experiences particularly when consumers are ready for purchase is key to our success. Working with Stripe allows us to create this for our customers, enabling them to shop on Catch through any device quickly, securely and with minimal fuss.”  Ryan Gracie, Chief Marketing Officer, Catch Group

What’s next for online marketplaces in Australia

Considering the substantial impact they are having on daily life in Australia, it’s unsurprising 71 per cent believe marketplaces are beneficial to the economy. Of those, 71 per cent believe marketplaces give consumers more options, 52 per cent believe they help small businesses reach more consumers, 58 per cent believe they increase competition between businesses, 41 per cent believe they provide more flexibility to part-time workers, and 36 per cent believe they help create more jobs.

Marketplaces aren’t just creating new ways for Australians to buy things, but they are opening up new ways to make income. In the past year 26 per cent of Australians (the highest percentage among countries surveyed) used an eCommerce marketplace to both buy and sell, while a third of those who indicated using personal chores marketplaces, used it to sell their services.

We’re starting to see the real transformative impact of the internet with the growth of these multi-sided marketplaces. These marketplaces aren’t just changing the way we travel, shop and commute, they are fundamentally changing the internet economy, creating new commercial experiences that cannot exist in the offline world and driving the next wave of growth online.

One of the key advantages these business models have is that they can achieve remarkable scale very quickly. Marketplaces are also incredibly complex, needing to manage multiple pay-ins and pay-outs simultaneously. We continue to develop tools that make it easier for these businesses to scale online to make managing these complicated fund flows simpler and more seamless for their users in Australia and around the world.”  Mac Wang, Head of Growth Australia & New Zealand, Stripe

 


About Stripe

Stripe is a technology company that builds economic infrastructure for the internet. Businesses of every size — from new startups to public companies like Salesforce and Facebook — use the company’s software to accept online payments and run technically sophisticated financial operations in more than 100 countries. Stripe helps new companies get started and grow their revenues, and established businesses accelerate into new markets and launch new business models. Over the long term, Stripe aims to increase the GDP of the internet.

 

**This article was provided through a newswire and does not express the views or opinions of 61-Bit.

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Australia at a “tipping point” for marketplace businesses, new Stripe research finds
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