Analysis of Australian e-commerce consumer behavior and market in 2019

The Australian e-commerce market is booming, with Australians spending a total of A$28.6 billion (US$20.3 billion) on online shopping last year. As of January 2019, online shopping accounted for 9% of total retail sales in Australia. Statista (a German statistical resource website) predicts that by the end of this year, the revenue of Australian online businesses will increase by 15.1%. In addition, the number of online shoppers in 2019 will increase by 5% from last year to 20.3 million.

If you want to enter the Australian e-commerce market, sellers must understand the following statistics.

1. By 2021, the Australian e-commerce market will reach $25.2 billion

Australia is currently the world’s tenth largest e-commerce market by revenue, and the market is expected to continue to grow in the coming years. According to Statista, by 2021, the Australian e-commerce market will reach A$35.2 billion (approximately US$25.2 billion).

(Figure: Expected growth scale of Australia's e-commerce market)

2. 8 out of 10 Australians shop online

As of February 2019, 80.8% of Australians shop online, and by 2020, one in ten goods will be purchased online. By 2021, the penetration rate of Australia's e-commerce market will reach 85.2%, and the number of online shoppers will reach 22 million.

3. Australia’s e-commerce industry revenue is expected to grow by 15.1% in 2019

Data from Statista shows that although Australia's e-commerce industry revenue is expected to grow by 15.1% this year, this growth rate will slow in the future, falling to 7.4% by 2021.

(Figure: Australia's e-commerce market revenue growth rate from 2018 to 2021)

As the number of online retailers grows, market competition is also intensifying. Online retailers not only face pressure from local e-commerce and global e-commerce giants like Amazon, but also need to meet growing customer demand. Therefore, although the number of online shoppers is growing, rising operating costs will suppress the revenue growth of online retailers.

Online shopping trends in Australia

4. Online general stores and vertical stores are the fastest growing e-commerce sectors in Australia

In 2018, the sales growth rate of online general stores and vertical stores was 29.6%, and this growth trend is likely to continue in 2019.

(Figure: Sales growth rate of various e-commerce companies, source: National Australia Bank)

The fashion industry has become one of Australia's strongest e-commerce segments, but it appears to be slowing down according to recent online shopping data. As competition in the online fashion industry becomes increasingly fierce, more than 30% of beauty and fashion consumers will only buy when there is a promotion or special offer.

5. Third-party mobile payment and online payment are becoming more and more popular

Currently, 47% of Australian consumers use credit cards for online shopping, and 29% use payment services such as PayPal. Although this is the current trend, the use of e-wallets such as PayPal, Alipay, and Amazon Pay will be the payment trend in the future. By 2023, about 37% of online payments will be made through e-wallets.

(Figure: Payment methods Australians prefer when shopping online)

In addition, the "buy now, pay later" (BNPL) model is becoming more and more popular among Australian consumers. Last year, 7.7% of goods were purchased online through the "buy now, pay later" method.

E-commerce sellers should support both credit cards and third-party payment methods such as PayPal and AfterPay. As shown in the above figure, in addition to cash on delivery, a considerable number of Australians will continue to choose bank transfer as an online payment method.

6. In 2018, Australian online shoppers received an average of 2.3 parcels per person

As Australians spend more time shopping online, they are also shopping more frequently. In 2017, the average Australian consumer (over 18 years old) received 1.9 parcels per person. In 2018, the average number of parcels received increased by 21% to 2.3 per person. This number is likely to increase again by the end of 2019.

7. Australians are also beginning to be enthusiastic about the "Black Friday" and "Cyber ​​Monday" sales

Last year, Australian e-commerce sales grew by 28% during Black Friday and Cyber ​​Monday, which have become Australia's largest online shopping weeks each year. This data shows that Australians are also keen to "spend money" on products that are cheaper than usual during big sales. People are even starting to choose to buy seasonal goods online. Compared with 2017, the number of consumers who bought food and alcohol online in Australia increased by 41% in December last year.

Discounts and promotional offers are becoming the key to boosting sales for e-commerce sellers. Adopting effective discount strategies and customer loyalty programs will lead to a better shopping experience and improve customer satisfaction. It is reported that Australian consumers will start shopping before Christmas, so sellers can launch promotional activities in advance to increase profits.

8. 25% of online sales in Australia come from mobile devices

According to the PayPal Mobile Commerce Index released by PayPal, one-quarter of Australian consumers shop via mobile phones. Although 63% of Australians still prefer to use desktop or laptop computers for shopping, mobile shopping is becoming more and more popular. It is reported that 48% of Australians shop via mobile phones at least once a week.

9. 65.5% of online orders in Australia in 2018 were free shipping orders

Shipping costs appear to be a major deterrent for most Australians, with 65.5% of all online orders in Australia last year free shipping. In fact, 60% of Australians will abandon their shopping carts if shipping costs are higher than expected.

Global e-commerce trends

10. By 2021, the global e-commerce market will reach A$3.5 trillion (US$2.5 trillion).

It is estimated that the global e-commerce market will be worth AUD 2.8 trillion (USD 2.0 trillion) in 2019, an increase of 11.3% from 2018. By 2021, the global e-commerce market will grow by 25%.

Here are the top 10 e-commerce markets in the world in 2019:

•China

•USA

•U.K

•Japan

•Germany

•South Korea

•France

•India

•Canada

•Australia

(Figure: Global Top 10 E-commerce Market Sizes)

11. 57% of online shoppers shop across borders

This is a huge opportunity for e-commerce companies that plan to expand their overseas business. Expanding overseas does not necessarily mean setting up warehouses overseas. Launching social media activities or online advertising are good ways for sellers to test the waters in new markets.

Compiled by: Hugo.com