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In 2024, eCommerce in Australia is undergoing significant transformation, driven by increased adoption of digital payment methods such as e-wallets. The strong recovery from the pandemic is fueling these shifts, as consumers embrace new online shopping habits. In this article, we reveal key trends shaping the market and provide insights for businesses to stay ahead.
The powerful emergence of the COVID-19 pandemic in 2020 marked a major turning point for the eCommerce industry in Australia, driving an unprecedented surge in online shopping as lockdowns and social distancing measures forced consumers to shop online. Items such as groceries, electronics, and home office equipment saw significant growth, leading many businesses to quickly adapt to meet the high demand. This period also accelerated the adoption of technologies like contactless payments and online ordering services.
However, by 2023, although the growth rate of online shopping had gradually slowed due to the unstable global economy, eCommerce in Australia still held a significant share of total retail spending. According to Statista, approximately 29% of Australian consumers make at least one online purchase each week, while 83% of online shoppers purchase at least once a month.
As Australian consumers become more aware of the advantages of online and omnichannel shopping, retailers from both within and outside the country are anticipated to vie for a bigger share of the growing eCommerce market in Australia.
In the first half of 2024, eCommerce spending in Australia reached approximately US$ 23 billion (around AUD 35 billion), marking a 12 per cent increase compared to the same period in 2023. This surge in online shopping was fueled by major promotional events and a rise in holiday shopping.
Categories like fashion, electronics, and groceries remained top spenders. Fashion and accessories led with about 30 per cent of total e-commerce spend, followed by electronics at 25 per cent and groceries at 20 per cent. Notably, online grocery delivery services experienced significant growth as consumers increasingly sought convenience.
Australian consumers spent a total of approximately US$ 63.6 billion on eCommerce, with an average order value of US$ 98.1, down 4.6% from the previous year.
E-commerce spending trends for early 2024 also highlighted regional disparities. Eastern Australia led in spending due to its high population density and advanced infrastructure, accounting for roughly 65 per cent of the nation's total eCommerce expenditure, equivalent to about US$ 15 billion. Meanwhile, Southern, Northern, and Western Australia also saw growth at lower rates. This regional variation underscores the diverse landscape of Australia’s online retail market.
According to Statista, in the first half of 2024, over 17 million Australian shoppers used online shopping sites monthly, reflecting a 45 per cent increase from 2020 (11.78 per cent). To put this into perspective, eCommerce shoppers in Australia represent approximately 63.94 per cent of the country's total population of 26.714 million.
With the number of eCommerce users steadily rising, around 23.14 million Australians are projected to be shopping online by 2029, marking a 96.43 per cent increase from 2020 to 2029.
The 2024 Global Digital Insights report on Australia's eCommerce landscape also reveals that:
52.8 per cent of internet users purchased goods or services online (up 0.1% from the previous year).
23.1 per cent of users bought groceries from online stores (up 2.2% from 2022).
13.5 per cent of users utilized buy now, pay later services for their online transactions.
The growing dependence on eCommerce in everyday life in Australia is increasingly evident across different generations, product categories, and payment methods.
In 2024, eCommerce in Australia is rapidly growing, with each generation bringing unique trends and online shopping habits. From Baby Boomers to Generation Z, the consumer behaviours of these age groups are reshaping the market.
Gen Y
Millennial shoppers continue to set records in online spending, with a total expenditure of US$ 22.1 billion, marking a 2% decrease compared to the previous year. Their average cart value stands at US$ 95, down 6% from the same period last year.
Gen X
Generation X ranks second with a total online spending of US$ 17.5 billion, reflecting a 1% increase from the same period in 2023. Despite being the second-highest spenders overall, they maintain the highest average cart value at US$ 110 this year, though this is a 5% decrease compared to the previous year.
Baby Boomers
As a generation that adapts more slowly but has substantial purchasing power, Baby Boomers rank third with a total e-commerce spend of US$ 12.5 billion. Despite trailing behind the other generations, they exhibit the highest year-over-year growth at 7%, allowing them to quickly catch up to the other age groups.
Gen Z
Generation Z, the digital-native cohort, shows unique e-commerce patterns compared to earlier generations. Their total spending stands at US$ 10.6 billion, marking an 11 per cent decline from the previous year. This decrease is likely due to their younger age and early career status.
Faced with an uncertain job market and rising debt, Gen Z tends to choose more affordable, smaller items like fast fashion, reflecting their budget-conscious approach to spending.
E-commerce spending in Australia is diversified across various product categories, reflecting the comprehensive growth of the market. Fashion, electronics, and groceries are the primary areas of expenditure, while health products, entertainment, and household goods also hold significant shares. This trend highlights the strong shift of Australian consumers towards online shopping across nearly all aspects of daily life.
Secure and streamlined online payment solutions are seen as key factors positively influencing Australian consumers' online spending behaviour. In the first half of 2024, 31% of Australians opted for e-wallets, while 41 per cent used debit and credit cards. Only 10 per cent chose bank transfers and around 3 per cent preferred cash payments. The decline in cash usage is attributed to the digital transformation trend and the inconvenience of handling cash.
As of March 2024, 80% of Australian consumers have used PayPal as their primary digital payment service. This is followed by BPay at approximately 48%, Apple Pay at 39%, AfterPay at 38%, and Google Pay at 27%.
SecurePay (3%) and Windcave (1%) are the least popular payment solutions.
In 2024, there will be a notable shift in the online shopping behaviour of Australian consumers. The strong recovery post-pandemic and the trend towards a new normal have significantly driven the adoption of digital payment methods, particularly e-wallets. Despite global economic concerns, Australians continue to maintain high levels of consumption and frequently return to e-commerce platforms.
The future of eCommerce in Australia is being shaped by innovation and the adaptability of consumers in how they approach and manage online shopping. These changes not only reflect consumer adaptation to modern technologies but also open up significant opportunities for businesses. To succeed in the increasingly competitive eCommerce market in Australia, businesses should reach out to technology experts at Rabiloo to quickly adopt and integrate the latest breakthrough technologies into the company’s operations.
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