Gerry Harvey on How Online Retail Will Never Reach More than 10% of Total Sales

Open mic here, what is your stance on online retailing? Well, online retail is over-hyped and it's unfair in terms of all the overseas retailers selling into Australia and not paying their duties and GST and all the rest and it will all stop. The pity is that it will go for 3, 4, 5 years before it stops. But the stop period is slowly coming. It might probably be in the next few months even.

So the rest of the world doesn't do what we do. So if you go to the UK and you want to bring something in from overseas, you pay your 20% taxes, you pay your duties and I think even on smaller items, they have a surcharge as well sort of thing. We have a thousand dollars, and no one takes any notice of that. The thousand dollars becomes 2, 3, 4, 5 thousand because they send it in in parts, or the don't declare it or they get a bodgy invoice and all this sort of thing.

So it's an absolute rort. And there's no point to it except that some people get some cheaper stuff and put a whole lot of other people out of work. So sooner or later governments wake up to it and that's what's happening now. So, that part of it, the overseas thing will start to drop, when that all happens.

Then in Australia, online, that will start to grow. And so you will have this combination of online and bricks and mortar shops. So at the moment in Harvey Norman that online business is growing. We were doing 60 or 70 thousand dollars a day.

In December it got up to 300,000 dollars a day but now but now it will drop back to maybe 100/150 thousand dollars a day and that will just keep on growing. So what percentage of our business will it be in 1 years, 2 years, 5 years, 10 years? Everyone's having a guess at that and they don't know. At the moment, if you took instead of a Harvey Norman, maybe took a department store, it might be a bit better an example. A department store is 1 or less than 1 per cent of turnover.

Where can it get to? If it gets to 5 per cent it will be high. But a whole heap of people will tell you that it will get to 10 or 20 percent, I don't believe that. I think it's got a ceiling on it. But I am not sure what it is.

And if you take the department stores, there's only two really, David Jones and Myers, and if it gets to 5 per cent, that'll be 1 in 20 sales done online. I am battling to see how it will get much more than that but I don't discount the fact that it could get to 10 per cent, it could, but I don't ever see it getting any more. I just can see how it could get any more than that..