Online retail offers customers GST-free shopping to highlight competitiveness of local e-tailers

An Australian online retailer is ditching the GST this weekend in order to convince local shoppers they should be searching online for bargains rather than in bricks and mortar stores.

But Lorenzo Coppa, chief executive of eStore.com.au, also says it’s important that Australians look online for local deals before heading overseas, so more money can be pumped into the Australian economy.

“I think the customer should try and find the best deals possible… but I think customers need to know they don’t have to go overseas. There are very good deals available here online,” he says.

eStore announced this morning that it will offer GST-free goods this weekend, January 15 and 16. Coppa says the campaign is designed to get more people shopping online and become more comfortable purchasing digitally than through a bricks-and-mortar store.

The move comes after Australia’s major retailers have taken issue with the GST exemption for goods purchased from overseas for under $1,000.

Large retailers including Harvey Norman and Myer have formed a Retail Coalition, designed to lobby the government into either ditching the GST entirely or at least imposing a tax on imports below $1,000.

Harvey Norman chairman Gerry Harvey says if the current trend continues, thousands of jobs will be lost in the local retail sector.

But Coppa says retailers need to do their part here in operating online, and says the GST-campaign is a method to get people comfortable with buying via the internet.

“Our purpose here is to get more customers comfortable buying online. I think there is a growing percentage of people buying online now, and we want to give people that opportunity to save more time and money.”

“This is primarily an issue of convenience. Whether it’s the savings of GST or being able to buy at home, it’s really about customers learning that it’s easy to shop online.”

Coppa argues operating online allows him to offer discounted goods due to lower overheads, which is why he believes the short-term GST discount campaign won’t hurt the site’s popularity in the long-run when full prices inevitably return.

“I think the better price points will be the more sustainable strategy. We’ve been online since 1998, and trading since 1991 since we were a mail order company that had people use their credit cards over the phone.”

“It’s the same business model, but just in a more content-rich way. So it’s the price and convenience strategy that will ensure keeping us online. When people are online, look at reviews online, talk online, then they will purchase online.”

But Coppa’s defence of the online marketplace doesn’t necessarily extend to sending money overseas. While he argues that customers need to find the best deals available, he also says Australian online stores are growing.

“I think customers should be wary of buying overseas from some areas, because you do get compliance issues. With a book, that might be less risky, but when it comes to technology, a camera may not work properly, or so on. That can be a problem.”

“A lot of the focus now is on the better deal, but you can get a better deal here. You don’t have to always search overseas.”