Daily Archives: May 13, 2016

Competing Against International Businesses On Our Turf


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Webmotors recent acquisition of BuscaCarros shows an interesting dynamic change to what carsales faces in Australia where in 19 years it has completed just the two acquisitions of automotive classifieds sites.

In 2005 carsales acquired/merged with Carpoint (and Boatpoint, Bikepoint, etc) and in 2007 Discount New Cars was acquired. In 2012 the ACCC (Australian Competition and Consumer Commission) blocked the carsales acquisition of Trading Post.
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Trading Post was an iconic brand from a print perspective but that did not move online so the interesting part of the failed Trading Post transaction is that Trading Post really offered no material gain for carsales.com.au (as opposed to carsales.com Ltd) because from an online automotive classifieds perspective, Trading Post was terminal; yet the basis for the ACCC blocking the transaction was centred around the impact it would have on competition in online automotive classifieds.
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The value for carsales was in a general classifieds platform where it was looking to compete against the emergence of Gumtree, owned by US online giant eBay.

The ironic part of this is that all the ACCC (along with all the submissions) succeeded in doing was stop carsales.com Limited, an Australian founded and run company (who pays its fair share of Australian tax), compete effectively against an international company such as Gumtree (who may or may not pay its fair share of Australian tax).
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I get the competition focus of the ACCC and agree with it in principle. The problem in this case was that the whole picture wasn’t considered and generally in Australia we like to cut down the “tall-poppys”; the issue with online is that Australia is not big enough to be viable market with 2-3 competitive players in each market vertical.

This opens the door for the international giants such as eBay, Amazon, Google, Facebook, etc to use their global reach to compete against Australian businesses with unfair advantages.

And make no mistake, the likes of Google, Facebook and Amazon are potential competitors for practically all online Australian businesses.