The internet is the great equaliser. Most industries’ competition is no longer down the street, but rather, halfway across the world in a garage. Digital business models are disrupting traditional ways of doing business – and where they’re located.

Just as the growth of the internet has enabled Australian businesses to expand beyond the physical, globalisation has enabled international counterparts to enter and target Australia – which more often than not has yielded massive growth.

Online businesses such as ASOS, Etsy and eBay have either targeted Australian shoppers directly or have opened up local buyers to a wide array of sellers located offshore, selling their own product. This has provided incredible variety for the local shopper, resulting in a growing

Offshore businesses targeting Australian shoppers carry several advantages. The ability to scale at such high rates allows for huge marketing campaigns, in particular targeted ads which can attract Australian shoppers through social networks and other popular platforms.

Access to cheaper pricing models, the effective erasure of rental costs and the ability to access sophisticated inventory channels means offshore businesses are providing incredibly advanced retail models all over the world. In comparison, local retailers are hard-pressed to compete.

The local retail industry’s push to have GST applied to offshore retailers has also fallen flat over the past few years – for now and the foreseeable future, offshore retail remains in a strong position.

There has been no bigger disruption to the retail industry than the growth of the internet, and this disruption has been felt strongly in Australia. Companies like ASOS have been shipping freightloads of goods in planes to keep up with demand. These stores often have no retail presence when they first begin.

But those businesses without sophisticated marketing channels and their own design teams are capturing local commerce – plenty of businesses have made an effort of pointing out to local consumers when Australian shipping is available. The cheap cost of targeted marketing means capturing consumers is easier than ever.

But the concept of businesses starting online has been true since the mid 1990s. The real change is being found in digital toolsets – resources allowing anyone, anywhere to compete in the digital economy.

Coursera, Codeacademy

Education is changing. Driven by a need for greater flexibility, customisation and a desire among knowledge workers to upgrade skills, the Massive Open Online Courses (MOOC) trend has gathered tremendous pace in the last few years.

Coursera has benefited from this huge demand for online, free education having started with courses mostly in the IT space but quickly expanding into science, business, law, and many other fields.

Within just two years the Coursera has amassed 7 million users and as of December 2013 raised $US85 million in venture capital. Locally, University of Melbourne vice-chancellor Glyn Davishas stated that “We took 160 years to build up a student body of 47,000 on our campus and in 10 months we recruited 300,000 people online. That’s the speed of change.”

But this also speaks to the growing ability of individuals to learn these skills on their own. Given the huge amount of growth in developing countries, with companies such as Google striving to bring internet connectivity there, the possibility of these websites and courses to empower the next group of creators is high.

Airbnb

‘Collaborative consumption’ and the ‘sharing economy’ has transformed the way consumers source and procure services. Taking advantage of this growing trend, Airbnb is disrupting the accommodation industry by connecting people across the world to rent rooms and homes from each other at a fraction of the cost of a hotel.

Airbnb’s platform is providing access to a growing global audience and enabling users to become their own entrepreneurs.

Launched in August 2008, recent valuations estimate its worth at approximately US$10 billion, meaning it would be worth more than some large global hotel companies such as Wyndham Worldwide and Hyatt Hotels (Mashable – http://mashable.com/2014/03/20/airbnb-10-billion/).

In Australia, Airbnb is gaining significant popularity with over 13,000 listings in 2013 and over 100,000 Australians having used the service locally and abroad. Globally, this disruptive force shows no signs of slowing with a total user base in excess of 11 million across 192 countries.

A business located halfway across the world is now able to disrupt accommodation industries in other countries. Not only are competitors coming from overseas – but they’re being formed in areas which businesses don’t’ expect – the individual entrepreneur.


To find out more about the increasing value of data and other digital trends, please visit our Digital Innovation research site and download your free report.

 

Contributor

John Riccio

John is PwC’s Global Design & Deploy, Experience Consulting partner.

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