Have you ever wondered how Australian e-commerce is doing? If not, today is that time, and you’re about to learn more about online sales, sellers, and buyers right here in Australia. Thanks to Australia Post, we will show you how Australian e-commerce is doing.
This seventh edition of the Inside Australian Online Shopping Industry Report presents a detailed analysis of consumer online shopping behavior and trends. Buckle up because we’re off!
State of e-commerce
More than 80% of Australian households purchased something online in 2018, driving growth to 12.3%.
In addition, Australians turned to online shopping in record numbers in 2021. They spent $62.3 billion online for the year, accounting for 19.3% of all retail spending.
Spending on online physical goods grew 23.4% YOY. As a result of the pandemic, new habits have formed that have contributed to this growth.
In addition, 73.1% more purchases were made online in 2021 than in 2019, reflecting the dramatic change in shopper behavior.
Moreover, in 2021, shoppers purchased from a broader range of retailers. The increasing confidence of consumers to shop around will make customer retention a priority for retailers in 2022.
Source: Inside Australian Online Shopping Industry Report
When it comes to the number of consumers who shop online at least once a month, Australia tops the list but lags in terms of high-frequency shoppers.
Source: Inside Australian Online Shopping Industry Report
According to the survey, 84% of Australian respondents shop online at least once a month. However, in terms of high-frequency shoppers, Australia still has some catching up to do.
Shopper habits
Australian retailers firmly established online shopping as a permanent fixture through rolling restrictions in 2021. As a result, today, more households shop online and, more often, use more channels.
Source: Inside Australian Online Shopping Industry Report
The number of households making online purchases at least fortnightly increased by 112% from 2019 to 2021, from 1.6m to 3.4m. However, fewer households shopped less than monthly. Compared to 2019, this ‘low frequency’ cohort decreased by 21% (972K households).
Source: Inside Australian Online Shopping Industry Report
As new shoppers have transitioned to active online shoppers, the number of new shoppers entering the eCommerce market has declined since the most significant influx was recorded in April 2020.
Source: Inside Australian Online Shopping Industry Report
Australia’s Online Shoppers
To understand how shopper behaviors have changed, Australia Post has created four shopper profiles describing how active they were online in 2021.
Source: Inside Australian Online Shopping Industry Report
Despite the 1.7 million new shoppers in 2020, 1.4 million households continued to shop online in 2021. The Very Active Shopper and Super Shopper made about two out of three purchases (62%)
The future of e-commerce
Purchase growth during nonlockdown months slowed compared to 2020.
In 2020, growth was 83% over two years, almost double that of 2019. However, this slowed to 73% in 2021. Despite this, shoppers intend to buy more local products online. 31% of Australian shoppers plan to buy more local products in the future, while 27% of shoppers from 40 countries plan to buy more from domestic retailers.
However, people plan to keep shopping online. In a recent survey, 93% of respondents said they would maintain or increase online shopping in 2022.
Furthermore, click & collect services now account for 13.6% of online shopping. According to survey data, most respondents prefer click & collect because it is immediate and does not require shipping charges. Additionally, shopper habits are influencing performance across retailer sectors.
Source: Inside Australian Online Shopping Industry Report
Market perspectives on retailers and shoppers
2021 was an up-and-down year for retailers. Online goods spending continues to outpace retail spending, increasing 23.4% YOY (compared to 4.3% growth overall).
In addition, over the next three months, 88% of businesses plan to improve their eCommerce capabilities. And over 25% of medium companies estimate that they will invest in eCommerce over the next three years.
Source: Inside Australian Online Shopping Industry Report
Shoppers, on the other hand, are clear on what they want. They have different priorities online, in-store, and with click & collect.
Source: Inside Australian Online Shopping Industry Report
Shoppers also want retailers to up their game in key areas. For example, a recent survey found that shoppers think retailers could improve product availability, delivery options, and the eco-friendliness of packaging.
Source: Inside Australian Online Shopping Industry Report
Retailers insights
Almost 7.6 mln households purchased from Variety Stores in 2021, and nearly 83% of all households shop online. Other the most popular sectors are Home & Garden and Fashion & Apparel.
Source: Inside Australian Online Shopping Industry Report
Across all states and territories, Variety Store purchases slowed in 2021 after a dramatic increase in 2020. In the last two years, New South Wales has led the growth.
Source: Inside Australian Online Shopping Industry Report
What’s more, 6.2 million households purchased from Fashion & Apparel retailers, and 6.6 million purchased from Home & Garden. As for the rest sectors, 4.7 million households bought Health & Beauty products, 4.5 million bought Hobbies & Recreational Goods, and 2.9 million bought Specialty Food & Liquor.
To sum up
Although Australia has grown significantly over the years and has moved closer to global eCommerce leaders, it still faces many challenges. So what lies ahead for Australia, and what will its future look like? Will the predicted trends come true? We’ll see!
