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Australian eCommerce: Key Trends and Considerations for Retailers

Boaz Gam

Boaz Gam


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Article content
  1. Which Factors Have Accelerated eCommerce Growth in Australia?
  2. What Are the Local Consumer eCommerce Preferences?
  3. Top 3 Australian eCommerce Trends
  4. What Should Local Retailers Keep in Mind to Stay Competitive?

A Retailer’s Guide to Australian eCommerce in 2023 & Beyond

The Australian eCommerce sector has been actively growing over the past few years, transforming the country’s retail landscape. In fact, the share of online sales in the local market is estimated to reach an impressive year-on-year growth rate of 16.8% in 2023. While this shift is advantageous in many ways, it also comes with some challenges for domestic brands.

In this article, we review the latest Australian eCommerce trends, explain how they are shaping local consumer behavior, and provide some valuable insights into the strategies retailers can employ to thrive in such a rapidly changing environment.

Which Factors Have Accelerated eCommerce Growth in Australia?

A Retailer’s Guide to Australian eCommerce in 2023 & Beyond

It comes as no surprise that one of the main catalysts of eCommerce growth in Australia is the COVID-19 pandemic. With lockdowns and social distancing measures in place for extended periods, consumers turned to online shopping as a safer alternative.

As a result, nearly 9 million Australian households, which accounts for over 4 out of 5 families on the continent, made online purchases at some point in 2020. These figures represented a whopping 57% increase in online purchases compared to 2019, with Australian shoppers collectively spending a staggering $50.46 billion online.

Notably, this consumer behavior change has also led to a significant uptick in the popularity of online payment methods. Shoppers began to favor contactless options, such as mobile payment apps and e-wallets.

Australian businesses were quick to respond to this trend by investing in the development of their eCommerce platforms and online payment solutions. In turn, the ease and speed of online transactions, their enhanced security, and the availability of installment payment options have further fueled the growth of the Australian eCommerce market.

What Are the Local Consumer eCommerce Preferences?

A Retailer’s Guide to Australian eCommerce in 2023 & Beyond

Among the various product categories sold online in Australia, the following categories are the most popular ones:

  • Clothing
  • Shoes
  • Bags and accessories
  • Consumer electronics
  • Cosmetics and body care

The products that Australians buy online less often, on the other hand, include such items as:

  • Toys and goods for babies
  • Furniture and household products
  • Sports and outdoor equipment

What’s more, many of the prominent players in the online retail landscape are local brands including:

  • Woolworths
  • Coles
  • Officeworks
  • JB Hi-Fi

In fact, Woolworths, a major figure in the Australian B2C eCommerce arena, earned $3,874 million in 2021 alone, followed by Coles at $2,211 million. What’s more, the global tech industry giant Apple also holds a significant position in the Australian eCommerce market, reporting a revenue of $1,211 million in 2021.

Collectively, these three companies contributed 30.2% of the total revenue generated by the top 100 online stores in Australia in 2021.

Top 3 Australian eCommerce Trends

A Retailer’s Guide to Australian eCommerce in 2023 & Beyond

Here are the three main trends that are currently playing a pivotal role in the evolution of the Australian eCommerce landscape:

1. Cross-Border Shopping

In 2021, nearly 20% of Australians engaged in international shopping that year, with 40% of these purchases originating from China. At the same time, the share of products bought from the US has decreased to 21%, while UK orders dropped to 14% of overseas purchases. This decline is primarily due to international freight disruptions caused by the pandemic.

However, as Australia is gradually recovering from COVID-19, both small and medium-sized businesses, along with larger corporations, are recognizing the potential for cross-border expansion. As a result, this trend goes hand-in-hand with This trend is closely aligned with the acceleration of eCommerce growth in Australia.

2. Innovative Payment Methods

The array of payment methods accessible to Australians is also actively expanding. Nowadays, Australians can choose from such options as:

  • Credit and debit cards
  • Buy Now, Pay Later (BNPL) services
  • E-wallets
  • Account-to-account (A2A) transfers
  • Cash
  • Checks

When it comes to selecting the preferred payment methods, local consumers across demographics are mainly looking for convenience and simplicity in online shopping.

Due to this, digital wallets have seen an incredible surge in popularity. In the period between March 2020 to March 2021 alone, the volume of monthly digital wallet transactions surged from 36 million to 68 million, with the total value of these transactions skyrocketing from AUD 1 billion to AUD 2.1 billion.

BNPL is yet another payment method that has gained substantial traction in Australia in recent years, particularly among millennials. According to a 2022 survey, Afterpay, Zip, and Klarna are the leading providers of this payment method in the country.

3. Delivery Convenience

According to Australia Post, the national postal service, with Australians spending more time at home in recent years, there has been a substantial rise in home deliveries - their share grew from 82% in 2019 to 87.7% in 2020.

Besides, local consumers are also exploring alternative delivery options. For instance, collection points and parcel lockers have become especially popular.

What Should Local Retailers Keep in Mind to Stay Competitive?

A Retailer’s Guide to Australian eCommerce in 2023 & Beyond

According to recent surveys, the three primary areas where retailers could enhance their services linked to online sales are:

  • Product availability
  • Delivery choice variety
  • Eco-friendly packaging

Moreover, it is also crucial for retailers to comply with the refund and return policies developed by the Australian Competition & Consumer Commission.

Yet, aside from catering to local demand, it is also essential for Australian eCommerce businesses to comply with global industry standards. This includes such elements as:

  • Ensuring that their online platforms are scalable and optimized for mobile shopping
  • Focusing on providing top-notch cybersecurity
  • Continuously improving the overall user experience by conducting testing, gathering feedback from customers, and making necessary improvements
  • Providing prompt customer support
  • Leveraging data analytics and AI-driven technologies to offer customized experiences and personalized recommendations

By keeping these crucial aspects in mind and staying up-to-date with the current eCommerce trends, Australian online retailers can ensure sustainable business growth both locally and internationally.

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