Australia’s retail sector is a pillar of the national economy. Valued at over AUD $430 billion, it employs approximately 1.4 million people, making it the country’s largest private-sector employer.
Yet scale has not insulated the industry from disruption. Over the past three years, Australian retail has faced accelerating closures, margin compression, and a sharp shift in consumer behaviour driven by ultra-low-cost global e-commerce platforms.
The issue is no longer whether Australians will shop online—they already do. The issue is whether local retail can compete fairly and sustainably when global players operate under different economic and regulatory conditions.
Ultra-Low-Cost E-commerce and Market Concentration
Foreign-owned ecommerce platforms such as Temu and Shein have expanded rapidly into Australia. Temu is estimated to generate AUD $2.6 billion annually, capturing roughly 5% of Australia’s e-commerce market. In comparison, Shein has reached approximately AUD $1.3 billion in sales, growing at nearly 20% year-on-year over the past two years.
This concentration matters. While consumers benefit from low prices in the short term, market dominance reduces diversity, weakens local supply chains, and places enormous strain on domestic retailers already operating under GST, employment, and consumer-law obligations.
The Hidden Cost of Cheap E-commerce in Australia
Ultra-low prices often mask downstream costs. Australian retailers must comply with the Australian Consumer Law, GST collection, product standards, labour regulations, and environmental requirements. Many offshore sellers face limited enforcement across these areas.
The consequences are visible. Several well-known Australian brands—including Millers, Rivers, and Wittner have collapsed in recent years. These closures are not isolated failures; they reflect a structural shift where price competition is decoupled from compliance and accountability.
Environmental impact is another under-reported cost. The federal government has repeatedly highlighted the growing waste burden from fast-fashion imports, much of which ends up in landfills due to poor durability and complex return pathways.
Why Australian Retail Still Has an Advantage; If It Acts
Despite these pressures, Australian retailers retain structural advantages that global marketplaces struggle to replicate.
Local retailers operate closer to customers. They are subject to greater transparency in legal accountability. They can resolve disputes faster, offer transparent warranties, and provide service continuity that offshore-first platforms often lack.
Crucially, Australian consumers still value trust. Roy Morgan research shows that Australian consumers rank trust and service reliability above price when resolving post-purchase issues, particularly for higher-value goods.
The challenge is not intent; it is execution. These advantages matter only if retailers can deliver across channels, time zones, and peak periods.
The CX Reset Australian Retail Needs
The next phase of Australian retail competition will not be decided at checkout. It will be decided after that.
Returns, refunds, delivery exceptions, and warranty claims now account for a disproportionate share of customer dissatisfaction. As online sales grow, post-purchase contact volumes rise faster than sales themselves—a dynamic many retailers underestimated.
A CX reset requires reframing customer support as national retail infrastructure rather than a discretionary cost. This means:
- Designing CX for volatility, not averages
- Prioritising resolution over handle time
- Ensuring continuity across voice, digital, and self-service channels
- Maintaining service quality during promotions and disruptions
Technology enables this reset—but only when it supports human judgment rather than replacing it. Automation can accelerate validation and routing; trust is still built by people.
How ServeRetail Frames the CX Reset
ServeRetail approaches retail CX through the lens of exception management. Most CX failures occur when something goes wrong—late deliveries, disputed refunds, misunderstood warranty terms.
To address this, ServeRetail combines:
- Retail-trained CX teams
- Deep CRM, ERP, and order-system integration
- AI-assisted workflows for validation and routing
- A rightshoring model aligning onshore, nearshore, and offshore teams by interaction complexity
High-emotion and trust-sensitive interactions are handled close to the customer. High-volume transactional interactions are scaled efficiently. Multilingual capability is embedded across the model, supported by AI-assisted accent translation, ensuring clarity without fragmenting the experience.
This is not outsourcing for cost reduction. It is outsourcing to protect experience at scale.
Buying Local Doesn’t End at Checkout
Multiple surveys show Australians want to buy local—but intent erodes quickly when service fails.
News Corp’s Back Australia campaign highlighted a striking economic insight: if every Australian household redirected just $100 per week from foreign-made to Australian-made products, it could inject $16 billion into the economy and create 40,000 jobs.
But “buy local” only survives when post-purchase experience reinforces trust. Customers may tolerate higher prices—but not confusion, silence, or unresolved issues.
Policy and Regulation: What Needs to Change
Australian business leaders are not calling for protectionism. They are calling for parity.
Explicit policy considerations gaining traction include:
- GST enforcement parity for all cross-border e-commerce transactions
- Consumer-law compliance standards applied consistently across domestic and offshore sellers
- Environmental accountability for fast-fashion imports
- CX transparency standards, including response times, refund timelines, and dispute resolution visibility
Westfarmers CEO Rob Scott has publicly questioned why Australian retailers shoulder compliance burdens that global competitors often avoid while serving the same customers.
Fair competition does not mean limiting choice. It means ensuring the cost of doing business responsibly is not a competitive disadvantage.
The Question Australian Retail Leaders Must Answer
The real question facing Australian retail is not whether global competition will continue—it will.
The question is whether Australian retailers can scale trust, accountability, and post-purchase experience fast enough to remain relevant in a globalized marketplace.
Those who treat CX as infrastructure will adapt.
Those who treat it as an afterthought will continue to exit quietly.
Final Thought
Australia’s $430 billion retail industry is under pressure—but it is not powerless.
Price competition is temporary. Experience compounds.
The retailers that endure will not be the cheapest. They will be the most reliable—especially when something goes wrong.
And that, increasingly, is where the real competition lies.
