Online Retail Trends in Australia 2019

Ecommerce is booming worldwide and, in Australia, there’s no exception. Last year, we Australians spent a total of A$28.6 billion (US$20.3 billion) on online shopping. As of January 2019, online shopping is responsible for 9% of Australia’s total retail sale.

It is predicted that by the end of this year Australian online businesses will see a 15.1% growth in revenue. Also, the number of online shoppers will reach 20.3 million in 2019, which is 5% more than last year.

Here are some essential Australian eCommerce statistics that you should know.

How fast is eCommerce growing in Australia?

1. Australian eCommerce market value will be A$35.2 billion by 2021.

Australia is currently the 10th largest ecommerce market in the world by revenue. Ecommerce in Australia will continue to grow over the upcoming years. The market size will be about A$35.2 billion (US$ 25.2 billion) by 2021.

2. Eight out of ten Australians shop online. By 2020, every one out of ten items will be bought online.

As of February 2019, 80.8% of people in Australia are shopping online and very soon one out of every ten items will be purchased off ecommerce stores. By 2021, the ecommerce market penetration rate will reach 85.2%, and the number of people buying online will be 22.0 million.

3. Australia’s ecommerce industry is expected to have a 15.1% revenue growth in 2019.

However, statistical analysis shows that this rate will start to slow down in future and by 2021 the revenue growth rate will be down to 7.4%.

As the number of online shops grows, so does the competition. Not only will online retailers face up against huge home-grown contenders and international players like Amazon, but they’ll also be competing to meet the increasing customer demands.So although we’ll see a growth in online shoppers, the rising business operation costs will keep the revenue growth in check.

The ecommerce industry will continue to grow beyond 2019 but will also come with a more competitive landscape. Online businesses will need to start investing in improved services and brand values to retain existing customers. More prominent Australian brands should also think about expanding into international markets to sustain their growth rate.

Snapshot of eCommerce growth YoY

Online shopping reached 9% share of traditional retail spend in 2018. The number of purchases grew by 20.2% last calendar year, up from 19.2% in 2017. Is casual the new fashion trend? Activewear was the leading purchase, up an impressive 37.5% YOY. Cosmetic purchases came in a close second at 36.4%. Overall the Health & Beauty category recorded the strongest YOY growth of 29.4%. Variety Store purchases grew by 21.5%, with Department Stores and Marketplaces the staple of this sector

4. Third-party mobile and online payments are gaining popularity.

Currently, 47% of online shoppers in Australia use credit cards to buy products online. 29% of Australians use services like PayPal. While these are the current standings, third-party payment systems or E-wallets like PayPal, Alipay, or Amazon Payments are seeing a rise in the future. By 2023 about 37% of online payments will be processed via e-wallets.

The buy now, pay later (BNPL) model is also becoming very popular among Australian consumers. Last year, 6.7% of online goods were purchased through buy now pay later channels. 

5. Australians are fast adopting international shopping traditions.

Last year’s Black Friday and Cyber Monday sales saw a 28% growth in online shopping. It’s now become the biggest online shopping week of the year. End of financial year sales also grew by 30% in 2018. These numbers show that Australians use these sales to save and enjoy online bargain hunting.

People have even started to purchase seasonal items online, rather than in stores. Last December saw a 41% increase in the online purchase of food and liquor compared to 2017.

Discounts and promotional offers are becoming the keystones in driving sales. Employing an effective discount strategy and loyalty system will increase customer satisfaction. Reports also show that customers start shopping earlier for Christmas, so moving your Christmas sales period ahead will increase profit.

6. 25% of online sales in Australia were made through mobile devices.

According to the latest PayPal m-Commerce Index, one in four shoppers in Australia will purchase items from their mobile phones. Though 63% of Australians still prefer desktops or laptops, online shopping using mobiles is gaining more and more popularity. 48% of people shop via mobile at least once a week.

7. 65.5% online orders placed by Australians come with free shipping.

Shipping costs seem to be the deal breaker for most Australians. 65.5% of total orders delivered last year had free shipping. In fact, 60% Australians will abandon a shopping cart if the shipping cost is higher than expected.

Despite having a smaller population than many growing markets, Australia continues to be an ecommerce powerhouse within the global stage. Local online retailers have been holding their own against international marketplaces, and any online businesses who can promise excellent customer service are going to come out on top in this A$28.6 billion industry. All in all, the future looks bright for Australian ecommerce

Resources: Statistica, Australia Post, NAB, PayPal, emarketer.com