The major problem is extreme competition.
Australian brands compete simultaneously with:
- Australian fashion brands
- International brands
- Department stores
- Shopping-centre retailers
- Online-only businesses
- Amazon and other marketplaces
- Shein, Temu and similar low-cost platforms
- Instagram/TikTok brands
- Small boutique businesses
- Second-hand/resale platforms
This makes it increasingly difficult for an ordinary clothing brand to compete simply by importing products, adding a margin and selling them through a website.
Major challenges
1. High customer acquisition costs
Digital advertising has become expensive. A new brand can spend substantial money on Meta, Google, TikTok and influencer marketing before achieving a profitable customer acquisition cost.
2. Price competition
Consumers can compare thousands of products online within minutes. Ultra-low-cost international retailers have put considerable pressure on Australian brands.
3. Import dependence
Many Australian brands manufacture or source garments overseas. Therefore, they are exposed to:
- exchange-rate fluctuations
- international freight costs
- manufacturing costs
- tariffs and trade-policy changes
- supply-chain disruptions
- minimum order quantities
- quality-control problems
- long lead times
4. Inventory risk
Fashion is particularly vulnerable to unsold inventory. If a product does not sell during its fashion cycle, the business may have to discount it heavily.
5. Discounting
Australian fashion has become highly promotional. Constant sales can train consumers to wait for discounts, reducing full-price sales and margins. Australia Post specifically reports that women’s fashion remains price-led, with about one-third of shoppers waiting for sales.
6. Consumer financial pressure
When households face higher living costs, clothing is often a discretionary purchase. Consumers become more price-conscious and reduce unnecessary purchases.
3. But there is a very important opportunity: online fashion
This is probably the most attractive area of the Australian fashion industry for a new business. Australia Post’s 2026 eCommerce report shows that Australians spent A$82.6 billion online in 2025, up 14% year-on-year, and online purchases represented 24% of total retail spending. A record 82% of Australian households—9.8 million households—shopped online during 2025. Fashion is one of the major online categories. Australia Post reported that Australian consumers spent A$9.6 billion online on fashion in 2024, representing 13.9% of online spending, with fashion growing 4.1% year-on-year.
Women’s fashion is particularly significant. In 2025:
- A$3.6 billion was spent online on women’s fashion
- Online women’s fashion spending increased 15%
- Approximately 4.6 million households purchased women’s fashion online
- 49% of women’s fashion spending was online
That is a very strong indication that online fashion is not a temporary trend—it is becoming a fundamental part of Australian fashion retail.