Critical.
Authoritative.
Strategic.
Subscribe to CIO Magazine »

Offshore websites can't dent Harvey sales

But Gerry Harvey is still blaming the media for "deliberately distorting" his GST campaign

Offshore websites have failed to dent sales at Harvey Norman but it hasn't stopped retailer Gerry Harvey lambasting the media for "deliberately distorting" his imported goods tax campaign.

Eight months after sparking a furore over his plan to impose GST and duties on foreign goods bought online under $1,000, Harvey Norman's chief executive says local businesses are now falling over due to cheaper offshore websites.

"When I first brought that up, that online thing back at Christmas time, what I said at the time is now happening," Harvey told AAP.

"You've got shop after shop in trouble.

"Not Harvey Norman-type shops. Clothes shops, shoe shops, all those shops that are being affected by online purchases that are not paying all their duties and taxes."

He said sales were "all over the place" and businesses were putting off staff and closing doors.

Late last year, Harvey and the heads of other major retail chains said the Commonwealth should apply the goods and services tax (GST) and import duties on all goods bought overseas online by Australian consumers.

Currently, no GST is imposed on goods that are bought from international websites for under $1,000.

Last week, Harvey Norman said it would start an online shopping presence in October after reporting an increase in net profit of nine per cent in fiscal 2011 and giving a "cautious" outlook for fiscal 2012.

The move comes seven years after Harvey Norman made its last attempt to drive online sales.

Harvey doesn't expect it to be a cash cow as competition from overseas websites poses a tiny threat.

"It's less than 0.1 of one per cent of what we sell, so why did the media take up about me saying that I'm protecting Harvey Norman," he said.

"It's like bull**** coming out all the time. Why did they deliberately bloody distort it?

"People are not importing fridges and TVs and lounges."

Deutsche Bank retail analyst, Paul van Meurs, said Harvey Norman wasn't an obvious online business choice due to its range of goods.

But he said it was difficult to verify whether offshore offers threatened about 0.1 of one per cent of total sales.

"It does sound small but I guess it depends on your definition of that," van Meurs said.

"The problem is ... are you really going to order a TV out of Korea or China and risk that you'll have a different spec, or a different system or no warranty, or it arrives and it's broke."

He said platforms for established online retailers were around the size of one physical store.

"So it's not insignificant but not hugely significant either."

It appeared Harvey Norman would find a way to pass on the benefits of online sales to its franchisees, he said.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

More about: AAP, Deutsche Bank, Deutsche Bank, Harvey Norman, Norman, Norman

Comments

Post new comment

The content of this field is kept private and will not be shown publicly.
Users posting comments agree to the CIO comments policy.
Login or register to link comments to your user profile, or you may also post a comment without being logged in.
Related Coverage
Related Whitepapers
Latest Stories
Community Comments
Tags: business, Gerry harvey, Harvey Norman, online sales, retail
Latest Blog Posts
Whitepapers
  • Case Study: Svenska Kraftnät safeguards web and ensures communication security with Clearswift
    Energy producers from surrounding countries load power onto the Swedish National Grid’s network, with energy suppliers then paying the Swedish National Grid to load onto their grids for them to sell-on to customers. Using Clearswift’s Email Appliance, and MIMEsweeper for SMTP means that the organisation has safe and resilient email helping them to meet their goal of providing a safe, robust, cost-effective and environmentally sound energy transmission system.
    Learn more »
  • Top Reasons to Implement an SOA Governance Strategy: A List for IT Executives
    Service-oriented architecture (SOA) has moved beyond hype to widespread acceptance as an IT strategy for delivering business value. SOA promotes the notion of modularity, providing overwhelming flexibility and superior economics for addressing business demands. However, undertaking the transformation to SOA is not without its challenges. If left unchecked, your inventory of SOA assets will become unmanageable; the reuse of services will diminish in favor of custom development; or even worse, modifications will be made to your existing services that break other business processes. The purpose of SOA governance is to help you ensure that this does not happen. This paper outlines the most compelling reasons for you to establish SOA governance within your organization.
    Learn more »
  • Business Intelligence Best Practices for Dashboard Design
    Even if a dashboard’s appearance looks professional and is aesthetically pleasing, appearances can be deceiving. Although visual design is important, it is also important to ask yourself: Is the data reliable? Is it timely? Is any data missing? Is it consistent across all dashboards?. This paper offers an overview of best practice business intelligence (BI) dashboard design principles and discusses data integration options for getting data into a dashboard.
    Learn more »
All whitepapers
rhs_login_lockGet exclusive access to Invitation only events CIO, reports & analysis.
Recent comments