[justincormack]

The local market is very small, and still spread out. The population is half that of Spain, or the same as southern England, so if you are selling to a domestic market you need to cover the whole country. If you are selling to the rest of the world, the timezone is not great, and getting to see clients is slow and expensive. Internet access is not good and expensive.

Despite that there are success stories.

[crdb]

The small local market is a common misconception. Australia does have 22 million inhabitants, but Australian GDP is around 1.56 trillion USD (2013, World Bank) vs 2.1 trillion for the whole of South East Asia. Which has over 600 million inhabitants. Not to mention that Australia being considerably more egalitarian than any member of ASEAN (thanks to minimum wage, non-concentration of wealth in the ruling elite, etc.), you have many more actual potential customers.

I obviously cannot give precise numbers but average basket for the e-commerce companies I worked for roughly did scale according to GDP per capita.

At the peak of the boom, RRP was 50% higher in Australia than anywhere else in the world (causing massive cross-border e-commerce, of course) and margins were and are still very good, in part due to lack of competition.

The other points brought up on the thread (such as lack of funding) are valid but globally true.