Snapshot of Australia’s eCommerce (Updated 2022)

Benedict Leong

Originally Published 30th July 2020

Updated 10th January 2022

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In Australia, shopping at brick and mortar outlets such as Bunnings for their regular barbecues has always been a big part of one’s routine in Australia. However, the need to move online for their shopping has still been going strong in 2021, in response to the challenges of 2020.

In We Are Social and Hootsuite’s Digital 2021 report,1 Australia in 2020 had:

  • 18.28 million online shoppers
  • USD 27.28 Market value for online consumer goods purchased
  • USD 1,492 Average Annual Revenue Per Online Consumer Goods Shopper (AARPU)

Prior to 2020, Australia Post mentioned that the share of total retail belonging to online shopping in Australia would reach 12 per cent only in 2021.2 In April 2020, about a month after COVID-19 was announced as a pandemic, online shopping reached 12 per cent.  In 2021, online shopping made up 16.3 percent of total retail according to Australia Posts’ 2021 eCommerce Industry Report.3

Australian consumer online retail spend has grown 35% year on year for Financial Year 2021 (IAB Australia). Online purchases of Consumer Goods Statistics in 2020 - 17.9 million people consuming consumer goods online in 2020, $1492 ARPU in Australia, $27.28 billion value of the market for online goods purchases in US$.

Did this shift towards online shopping continue in 2021? How else has Australian eCommerce changed these past few years, and is it possible to see what lies ahead? What are people in Australia buying online and how are they doing it? What does cross-border eCommerce have to do with it? This Australia eCommerce snapshot looks to provide an overview for all of these questions.

How do Australians make online purchases?

In a September 2021 survey by IAB Australia, 84 percent of Australian respondents reported that they either sustained or increased their online shopping in 2021, showing that online shopping habits may remain above pre-pandemic levels in time to come. This continued the trend of Australians needing to go online for their shopping needs due to the pandemic in 2020.

With brick and mortar stores being harder to access during the early parts of 2020, many Australians started turning to online shopping. April 2020 saw 200,000 more Australians shopping online for the first time, with some of them being older generations who previously saw no need to purchase through this channel.5

Australia saw its first spike in online shopping during April 2020 which was when COVID-related restrictions were beginning to kick in; a pandemic was declared on the 13th of March while the 29th of March 2020 saw outdoor groups being restricted to just 2 people. The next peak in 2020 was in December, with 17.5 million Australians shopping online.

Before the pandemic, Christmas season was when holiday-related spending would peak. Nowadays, this has been shifting earlier to late-November/ early December with the rise of shopping events like Black Friday, Cyber Monday, Click Frenzy (Australian Black Friday equivalent that occurs in May and then October or November) and even Singles Day according to JP Morgan in their eCommerce payment trends report 2019.6

This trend was validated in 2021. Australia Post in 2021 deemed November 2021 as the ‘biggest month in Australian online shopping history’ after delivering 21 million parcels across the period, a record number.7

However, as of the time of this writing, December 2021 sales figures had not been released. December 2021 sales may also have been affected by supply shortages as reported by the Financial Review.8

How COVID has influenced shopping behaviour in Australia - Australia’s online shopping remains above pre-pandemic levels and on average, 17 million Australians visited a major retailer online each month in FY 21

 

Source: IAB Australia9

What this could mean for merchants selling to Australia in 2022 is to plan for peak season in November to catch the Black Friday period all the way to Christmas in December. Below are some dates worth considering:

  • Singles Day (11th November 2022)
  • Click Frenzy (2 times a year: 17th May and then 8th November 2022)
  • Black Friday (25th November 2022)
  • Cyber Monday (28th November 2022)

Coupled with more Australians shopping online for its convenience and good deals, you may have to stock more inventory and prepare sufficient cross-border freight service capacity to serve this upcoming demand, especially if your warehouses are based in Southeast Asia and not Australia. If you’re looking for international direct to consumer shipping or international air freight services from Southeast Asia to Australia in time for this rush, reach out to us via the banner below:

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How do Australians make online purchases?

  • Australians primarily shop using smartphones and laptops, with 76 per cent of shoppers buying at least once a month
  • Television, word of mouth, and search – How Australians discover brands
  • Cards are still the top payment method but Buy Now Pay Later is gaining traction
  • What they are buying online?

Australians primarily shop using smartphones and laptops, with 76 percent of shoppers buying at least once a month

From IAB Australia’s survey cited earlier, they found that 64 percent of their respondents primarily shopped with their smartphones, which shows the importance of having a mobile-optimised experience if you are targeting Australian shoppers in 2022. IAB’s full list of devices shows the following:

  • Smartphone – 64%
  • Laptop computers – 48%
  • Desktop computers – 28%
  • Tablets – 21%

This wasn’t the case in 2020, as Australians who were facing lockdowns at home that time were bought more via their desktops and laptops. In 2020, smartphones still made up 25.7% of all purchases online by Australians according to Australia Post so a smooth mobile experience was still important back then.

76 percent of Australian shoppers bought online at least once a month, with 70 percent of shoppers purchasing non-grocery products online every month.10 Below is the breakdown of their buying frequency:

  • Weekly or more – 27%
  • Every 2 – 3 weeks – 25%
  • Once a month – 24%
  • Once every 2 – 3 months – 15%
  • Once every 6 months – 6%
  • Less than every 6 months – 3%

Australians shop online because it’s convenient, with the biggest shoppers staying in Victoria and New South Wales

Bar chart showing Australians’ top reasons for buying online from IAB Australia’s eCommerce Report September 2021. Convenience, free delivery and low prices are the top 3 reasons for Australians to buy online

 

IAB’s survey also touched on Australians’ reasons for buying online: breaking it down to the following:

  • Convenience – 76%
  • Free delivery – 50%
  • Lower prices – 45%
  • Discounts – 37%
  • More product options 33%
  • Fast shipping – 26%
  • Finding certain products/ brands – 25%
  • Products only sold online – 25%
  • Safety (avoid public places) – 20%
  • Free returns – 13%
  • Find new brands – 11%
  • Reviews from other customs – 10%

What this means for eCommerce players is that offering pleasant and easy omni-channel experiences is key, especially when we consider that convenience was prioritised way over just keeping safe.

If you’re selling to Australia, chances are some of your customers were either in Victoria or New South Wales. 6 of the top 10 online shopping locations in 2020 were in Victoria according to Australia post, with the other 3 in New South Wales with the last location being in Queensland. In each of Australia’s top 5 postcodes, Australians spent more than twice what they did in 2019 with at least 90 percent of households having shopped online.11

If you’re running a targeted advertising campaign in Australia, you may want to focus more of your budget on New South Wales and Victoria, while emphasising your deliveries. Free deliveries are high on the list, so showing that you offer free deliveries after a certain amount of sales could be a decent way of attracting more Australian customers.

If you’re looking for Australia-wide eCommerce deliveries and freight services from Southeast Asia, Janio’s international shipping and freight could make for a good starting point for your business. Contact us below to get a quotation:

 

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Television, word of mouth, and search – How Australians discover brands

Bar chart from We Are Social and Hootsuite’s Digital 2021 Australia showing the top methods of people finding brands online. The top 3 methods are Ads on television, Search engines and word-of-mouth recommendations

We Are Social and Hootsuite’s research uncovered the top ways that Australians discover brands in 2020:12

  • Ads on television – 39.8%
  • Search engines – 39%
  • Word-of-mouth recommendations – 36.5%
  • Brand or product websites – 27.7%
  • Ads in social media – 27.4%
  • In-store displays or promotions – 25.8%
  • Product brochures or catalogues – 24.7%
  • Ads on websites – 23.0%
  • TV shows or films – 21.6%
  • Retail websites – 19.4%

This shows a mixture of both inbound and outbound marketing techniques, with customers finding you naturally via search engines or word of mouth or receiving push marketing via ads on television, social media or on websites.

For merchants in Southeast Asia, ads on television could be quite costly and risky, so inbound techniques are likely a better bet. Working on your website’s search engine optimisation ranking on sites like Google or gaining a strong following on social media can complement your paid digital campaigns.

Even if your brand isn’t that well known in Australia, you could appeal to Australian consumers by positioning yourself as ethical and sustainable. Australian direct brand shoppers have more positive attitudes towards companies they feel have behaved well during the COVID crisis, and are ethical and sustainable.13 The Baptist World Aid ethical consumer report14 corroborates IAB’s survey results, but found that Australians tend to be more practical shoppers, but at the very least positioning yourself as ethical and sustainable can help get your foot in the door.

Another thing to add is that with Australians likely to be staying home more, they’re likely to spend more time on social media and online, so online channels are worth investing more in during this period. We also have an earlier article with resources to help you expand your eCommerce store overseas to help you out.

Cards are the top payment method but Buy Now Pay Later is gaining traction

34 percent of Australia Posts’ respondents mentioned they pay for online purchases using credit cards in 2020. This means that card payments were still the most popular method of payment according to JP Morgan, who mentioned that cards (debit, credit, etc) were used in 52% of all online purchases in 2019.15

However, there is also increasing concern among Australian shoppers about credit card fraud. For online businesses, getting positive user reviews could help out in building trust for your online store and helping to allay these concerns potential Australian customers may have.

Buy Now Pay Later (BNPL) has been gaining traction as a payment method in Australia. JP Morgan defines this as customers purchasing an item immediately then repaying the cost in installments.16 This is facilitated by a credit-providing intermediary between the shopper and the merchant, with schemes accepting payment via the customer’s bank account or card. The BNPL has the BNPL intermediary assume more of the risk in the transaction.

According to Australia Post, fashion and apparel is a big beneficiary of this method with nearly half of 2019’s BNPL transactions used to buy fashion items. Other product categories such as health and beauty, home and garden and the like also see purchases conducted using this payment method. In 2020, BNPL market leader Afterpay recorded a 15 percent increase in active customers that year.17

What are Australians buying online?

Back in 2020, initial purchases were concentrated around essential items like groceries with demand for other items suffering initially. However, as time went on, demand for other product categories began recovering. Australians began purchasing more fashion and apparel, notably casual and leisurewear and also started spending on other entertainment items like books.18

IAB’s survey which was published in September 2021 found that Australians were buying the following items in the 12 months ending September 2021:19

Bar chart from IAB Australia’s eCommerce Report September 2021 showing the top products bought by Australians in the last 12 months. The most popular items were fashion, groceries, meals, personal care and beauty and electronics and tech.

 

  • Clothing, shoes, fashion – 72%
  • Groceries – 54%
  • Meals and takeaways – 54%
  • Personal care and beauty – 45%
  • Electronics and tech – 43%
  • Books, toys, games – 40%
  • Home and garden – 34%
  • Furniture, household goods and appliances – 33%
  • Alcoholic drinks – 30%
  • Pet food and supplies – 26%
  • Jewellery, handbags, accessories – 25%
  • Fitness classes, sporting goods – 15%

Australia Post on the other hand, had a different set of categories and their respective market share for 2020 in their 2021 report. These cover sites specialised to different product categories, which also includes variety stores.

Variety stores include department stores and discount stores, with examples including the Reject Shop and Miniso. Variety stores sell fashion, health & beauty, home & garden products and other items as well):20

  • Variety Stores – 33%
    • Fashion Apparel – 7.3%
    • Hobbies and Recreational goods – 6.4%
    • Home & Garden – 10.3%
    • Other – 9%
  • Fashion and Apparel – 25.9%
    • 25.9% on Fashion apparel sites
    • 7.7% on Variety Stores
  • Home & Garden (includes consumer electronics, garden and other household products) – 22.9%
    • 12.6% on Home & Garden retailers
    • 10.3% on Variety Stores
  • Health & Beauty – 9.4%
  • Hobbies & Recreational Goods – 13.9%
    • Hobbies & Recreational Goods retailers – 7.5%
    • Variety Stores – 6.4%

To gain a fuller picture of how Australian eCommerce is evolving, we’ll be using the findings from both Australia Posts’ 2021 eCommerce Industry Report and IAB Australia’s eCommerce report 2021.

Clothes and Apparel

Like most other categories, clothes and apparel demand dipped in the early days of the pandemic in 2020. In April however, demand for fashion started picking up again. With most people spending more time at home, casual wear and leisurewear were starting to see higher demand.21

Clothes were bought by 72 percent of IAB Australia’s respondents. According to Australia Post’s 2021 report, fashion and apparel items made up over a third (33.6%) of online purchases in 2020. 25.9 percent of all fashion sales took place on fashion specific retailers while the remaining 7.7 percent were from variety store channels. In 2019, 44% of households in Australia purchased from an online fashion retailer.

Clothes and apparel demand is driven by Australia’s social media savvy millennial and Generation Z population, according to JP Morgan. Australia’s 18 to 36 age demographic has increased by around 500,000 people based on the latest Australia census, which means this group makes up 26% of the population.22

In addition to that, Australians are highly connected with an average of 3.1 devices per person.23 IAB adds that 50 percent of millennials in Australia agree that social media is an important part of how they find products that they buy.24

While convenience is the key reason for Australians shopping online, good deals are still fairly high on the list. ESW’s white paper states that 38 percent of Australians said the cost of including taxes and shipping for their products are cheaper than buying items domestically, while 29 percent said that international retailers offer more choice.25

Despite recent tensions causing demand for products from China in Australia to drop,26 China is still a key source of cross-border eCommerce purchases for Australians as found in International Post Corporation’s Cross-border eCommerce Shopper Survey 2020.27 While Australians still need to pay 10 per cent GST on shipments even below AUD 1,000 these orders are still not charged customs duties. China makes up 31 percent of Australians’ most recent country of cross-border eCommerce purchases in 2020.

Health and Beauty

In 2020, Health and beauty made up 9.4 percent of online purchases according to Australia Post.28 In a report by Kiri Masters in Forbes, Swisse’s marketing director for Australia and New Zealand Stuart Diamond noted customer behaviour changes during the period.29 Customers are spending longer on Swisse’s product pages on their eCommerce site, which shows that Australian customers are seeking out important information to make the most informed decision.

Stuart Diamond also noted that some Australians still want to connect with a principle of trust, so two-way communication with older and more experienced members of the community like health care practitioners is increasing. Australians are also increasingly shifting to proactive health management rather than being reactive, which can provide an opportunity for businesses to share genuine, helpful content.

In 2020, there was a strong self care trend during the lockdown period. People were buying products to help them relax at home like scented candles, face masks and hair masks. Another big seller was detergent. At least in 2020, customers were becoming more patient seeing that COVID caused supply chain disruptions and skyrocketing demand.30

Tying in with the earlier findings that Australians support ethical and sustainable brands, Lush released soaps shaped like koalas to raise money for animals affected by Australia’s bushfires back in January 2020. These were reportedly sold out.31

In short, Australians are looking to take better care of themselves, and support brands that support ethical causes.

Home and Garden (inclusive of Consumer Electronics)

IAB Australia’s survey found that the above categories were bought by the following percentage of respondents:

  • Electronics and tech – 43%
  • Home and garden – 34%
  • Furniture, household goods and appliances – 33%
  • Pet food and supplies – 26%

One thing to note for eCommerce merchants is that Australians may have a preference for buying home and garden products from local enterprises like Bunnings and Kogan. IAB’s September report stated that 46 percent of Australians prefer buying from local retailers.

Homewares and household appliances grew the fastest in April and August 2020, with the first round being in response to the lockdowns in March. Pet food recorded its strongest growth in November of 2020.

Euromonitor reports that electronics and specialist retailers “will continue to hold the largest percentage of consumer electronics sales in 2021. This is likely because consumers want to touch, test and try products they want to purchase, which is a priority for categories like home video and speakers.32

Statista also mentions that the top online stores by net sales for consumer electronics in Australia are Apple, Dell, Kogan (an Australian department store), JB Hi-Fi (home entertainment retailer), and Amazon.com.

Summing it up for Southeast Asian merchants

2020 and 2021 has brought many challenges which have changed consumer behaviour globally. With Australians maintaining their online shopping momentum for the foreseeable future, cross-border eCommerce merchants in Southeast Asia may be able to make use of a much larger Australian eCommerce market.

Australians love convenience, supporting ethical and sustainable brands, and getting great deals and savings. Being able to cater to their needs can go a long way to building your market share in the land down under. Speaking of bargains, you’ll also want to get enough of a following to update them of your upcoming Q4 promotions, especially for their major November and December shopping dates.

The 18 – 34 year old demographic makes up around 42.4 per cent of Australia’s population who shop online and drive the purchases of product categories like fashion and apparel.33 With the average number of devices per user standing at 3.1, social media is a key channel to reach this audience.

According to We Are Social and Hootsuite’s 2021 report, the most used social media platforms based on percentage of internet users aged 16 to 64 are:34

  • Youtube – 78.2%
  • Facebook – 77.7%
  • Instagram – 55.3%
  • Twitter – 30.2%
  • Snapchat – 29.3%
  • Pinterest – 26.4%
  • Tiktok – 23.6%
  • Reddit 18.5%

Tiktok has been showing strong growth as a channel, growing from an 8 percent share in Australia in 2019 to 2020’s 23.6%.

Depending on your product vertical, human interaction can also play a big role. As discussed by Swisse above, many want to check in with experienced members of society when it comes to vital purchases like health and beauty. If you are able to open channels to trusted experts via your store or brand, it may go a long way to helping out your business.

Last but not least, if you’re shipping out of Southeast Asia, logistics is definitely a key part of the eCommerce equation. With all the challenges that 2020 has brought, supply chain disruptions are common. Our flexible, end-to-end eCommerce logistics services from Southeast Asia to Australia can help get your parcels to your Australian shoppers on time and on target.

Also, team up with our team of supply chain experts to find out how to further optimise your supply chain and adapt to today’s challenges. To find out more, reach out to us via the banner below!

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References:

  1. Digital 2021 Australia – We Are Social Australia
  2. Australia Post 2020 eCommerce Industry Report
  3. Australia Post – Inside Australian Online Shopping – eCommerce Industry Report 2021
  4. IAB Australia – Research confirms online shopping uptick but with increased consumer expectations of brands
  5. IAB Australia – Australian Ecommerce 2021
  6. Australia Post 2020 eCommerce Industry Report
  7. E-commerce Payments Trends: Australia
  8. Inside Retail – November was Australia’s biggest online sales month ever: AusPost
  9. Asian Financial Review – Boxing Day retail sales face a ‘definite downturn’
  10. IAB Australia – Australian Ecommerce 2021
  11. IAB Australia – Australian Ecommerce 2021
  12. Digital 2021 Australia – We Are Social Australia
  13. IAB Australia – Australian Ecommerce 2021
  14. Inside Retail – Australian consumers are less ethical than they want to be
  15. JP Morgan – E-commerce Payments Trends: Australia
  16. JP Morgan – E-commerce Payments Trends: Australia
  17. Australia Post – Inside Australian Online Shopping – eCommerce Industry Report 2021
  18. Australia Post 2020 eCommerce Industry Report
  19. IAB Australia – Australian Ecommerce 2021
  20. Australia Post – Inside Australian Online Shopping – eCommerce Industry Report 2021
  21. Australia Post 2020 eCommerce Industry Report
  22. Practical eCommerce – Ecommerce in Australia: Cross-border Shopping Common
  23. JP Morgan – E-commerce Payments Trends: Australia
  24. IAB Australia – Australian Ecommerce 2021
  25. Australian Ecommerce Revenue to Reach US$32 Billion by 2023
  26. Preference for Chinese-made clothes, electrical goods, mobile phones, footwear and sporting goods drops in 2020 – Roy Morgan Research
  27. International Post Corporation – Cross-border e-commerce Shopper Survey 2020
  28. Australia Post – Inside Australian Online Shopping – eCommerce Industry Report 2021
  29. Forbes – Will Coronavirus Finally Drive Australian Shoppers Online?
  30. Australia Post – Inside Australian Online Shopping – eCommerce Industry Report 2021
  31. Insider – Koala-Shaped Soap From Lush Has Sold Out Around the World
  32. Euromonitor – Consumer Electronics in Australia | Market Research Report
  33. eCommerce – Australia | Statista Market Forecast
  34. Digital 2021 Australia – We Are Social Australia
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