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General information about Australia
Population: 24,772,247
GDP based on purchasing power parity (PPP): 1,246,475
Nominal GDP: 1,379,578
GDP growth rate: 2.20%
Number of Internet users: 20,679,490
Internet penetration: 85.10%
Smartphone users: 16,671,000
Smartphone penetration: 67.70%
The status of e-commerce in Australia
E-commerce is booming worldwide and, there’s no exception in Australia. Last year, 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.
Fast e-commerce growth in Australia
Australian e-commerce market value will be A$35.2 billion by 2021.
Australia is currently the 10th largest e-commerce market in the world by revenue. E-commerce 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.
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 e-commerce stores. By 2021, the e-commerce market penetration rate will reach 85.2%, and the number of people buying online will be 22.0 million.
Australia’s e-commerce industry is expected to have a 15.1% revenue growth in 2019.
However, 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.
Online shopping trends in Australia
Department and variety stores are the fastest growing e-commerce segment in Australia.Online department and variety stores saw a 29.6% growth in 2018, and this trend is likely to continue in 2019. The graph below shows year on year growth rate for different market segments based on e-commerce statistics from the last two years.
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, 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.
Australian online shoppers receive 2.3 parcels per year.
People are spending more on time shopping online, and are also buying more frequently. Australian shoppers who were over 18 received an average of 1.9 parcels in 2017. In 2018, the average number of parcel received increased by 21% and reached 2.3. This number is most likely to grow even more by the end of 2019.
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.
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.
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.
The top 5 products categories for Australian online buyers include travel, entertainment & leisure, clothes/shoes, electronics and food & beverages.
The top 3 payment methods for digital purchases include digital banking via bank’s website, payment by tapping credit/debit card and digital banking via bank’s app.
Top 10 e-commerce websites in Australia
Top 1. eBay Australia
Founded in 1995, as a pioneer of e-commerce, eBay is an American online marketplace that allows people and businesses to sell directly through its online auction platform. It has expanded to more than 20 countries including Australia, organizing the sale of products ranging from cars and vehicles to electronics and fashion, home and garden to sports and toys, and even business and industrial products.
Top 2. Amazon Australia
Founded in the US in 1994, Amazon started as an online bookstore and later diversified to products including media, electronics, apparel, furniture, food, toys, and jewelry. Having expanded to many countries, Amazon has become the uncontested global leader of e-commerce, except in Australia where it is No. 2. Amazon has developed further into brick-and-mortar retail with the acquisition of Whole Foods Market, as well as publishing, electronics, cloud computing, video streaming, and production.
Top 3. Woolworths
Woolworths is a retail company operating supermarkets among other brands (including Big W) owned by the Woolworths Group, one of the largest companies of Australia. Through its website, Woolworths sells groceries across Australia, as well as various other household, health and beauty, and baby products.
Top 4. JB HI-FI
Founded in 1974, JB HI-FI is a physical retailer of electronics and entertainment consumer goods, including video games, movies, music and software, hardware electronics and electrical home appliances, mobile phones and more that are also sold on its e-commerce platform. Since 2006, JB HI-FI has also expanded in New Zealand.
Top 5. Coles
Coles is a chain of supermarkets, retail and consumer services stores. Founded in 1914, Coles operates more than 800 supermarkets throughout Australia. After having developed an online shop, Coles also sells groceries, consumer and home products to Australian digital customers.
Top 6. Kogan.com
Kogan.com is a specialized e-commerce company offering electronics and consumer appliances, fitness and fashion, tools and more. Founded in 2006, Kogan.com started by selling televisions online before expanding to other successful categories of products sold through e-commerce. In 2016, Kogan.com acquired the online businesses of former retail chain Dick Smith.
Top 7. Big W
Big W is an Australian chain of discount department stores, a division of Woolworths. Operating more than 180 stores across Australia, Big W also sells online its garments and products for women, men, kids and babies as well as toys, home, and electronics.
Top 8. Officeworks
Officeworks is a chain office supplies stores, providing a range of products of office supplies, including print and copy, computers and technology, furniture and stationery. Owned by the Westfarmers conglomerate, Officeworks also proposes its products online through its e-commerce website.
Prospects of e-commerce in Australia
Despite having a smaller population than many growing markets, Australia continues to be an e-commerce powerhouse within the global stage. Local online retailers have been holding their own against international marketplaces, and any online businesses that 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 e-commerce.
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