Published on 06/01/2016 by Punchmedia

Did Online Electronics Demand Aid Dick Smith Demise?

Greater reliance on the internet has driven demand to purchase consumer electronics such as desktop computers, laptops, tablets and smartphones online with industry revenue forecast to expand by an annualised 21.7% in the five years through 2014-15 to reach $1.5 billion. Consumers' ability to search for and compare electronics products in the digital space has enabled the industry to withstand turbulent economic conditions, as consumers sought to find bargains online and not in retail stores.

Internet Connectivity

A surge in internet usage has been a driving force behind the rise of online shopping, which has supported the expansion of industry revenue over the past five years. The number of internet subscribers has soared over the period, led by the popularity of mobile wireless connections as the most dominant type of internet connection. Growth in internet connections is attributable to faster download speeds, reduced subscription fees and falling computer prices. The rapid increase in the number of internet subscribers reinforces the rising technological literacy of the Australian population, which has resulted in greater acceptance of purchasing items online.

Technological Developments

The industry has been affected by considerable technological change over the past five years, including the increasing sophistication of consumer electronics such as tablets, smartphones, notebooks and high-definition TVs. Demand for mobile gadgets such as tablets and smartphones has been supported by an improvement in mobile phone coverage as wireless telecommunication providers invest in infrastructure to better service rural and regional customers. The greater affordability of mobile connections has aided demand for mobile consumer electronic gadgets.

Price Competition

Enhanced online connectivity has fostered greater price competition, as it enables consumers to more easily compare prices and read reviews. At the beginning of the five-year period, instability in financial markets caused volatility in consumer sentiment and households attempted to cut back costs. Industry revenue grew as cost-conscious consumers gravitated online to search for affordable deals and cost savings. Online retailers benefit from not spending on as much on rental fees as traditional bricks-and-mortar retailers, which enables them to save on overhead costs and keep prices down.

Industry Structure

Enterprise numbers have increased over the past five years, driven by the strong revenue growth in the young industry. There is a trend of increasing revenue per enterprise, which is indicative of the larger players building economies of scale. The average wage has increased over the past five years, partly due to initiatives to increase operational efficiency.

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Curtis is a leading expert in the business-for-sale industry, serving as a senior content creator at anybusiness.com.au.

With a career spanning over fifteen years, Curtis has accumulated extensive knowledge in the domain of business sales, acquisitions, and valuations. His deep understanding of market dynamics and his ability to translate complex industry jargon into accessible insights make him a trusted resource for entrepreneurs and business owners looking to buy or sell businesses.

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