Australia is the eleventh largest ecommerce market in the world, and revenue is predicted to reach USD25.7 billion in 2020 and USD32.3 billion by 2024. This represents a year on year increase of 15.5 percent. In comparison, the bricks and mortar retail market grew by 3.4% over the same period to reach USD200 billion.
Online commerce represents approximately nine percent of all retail trade in the Australian market. The largest Australian eCommerce platforms/sites are eBay (AU) (69 million monthly visits), Amazon (AU) (22.5 million), Woolworths (20.4 million), JB Hi-Fi ((13.3 million), Big W (11.9 million), Coles (10.7 million), Kogan (10.2 million), Officeworks (9.45 million), Chemist Warehouse (9.1 million), and Catch (8.95 million).
Domestic eCommerce (B2C)
Analysis by research group Statista reports that by 2020 89 percent of ecommerce purchases in Australia will be domestic. This market has grown over 11% over the last year. Over 40% of all B2C transactions take place on eCommerce platforms such as eBay, Amazon, and Gumtree. The remainder of B2C eCommerce takes place at the individual company website. With over 13 million active Facebook users in Australia, social media is also a big driver in the promotion of B2C transactions. Retailers are driving sales through a mix of shop and online promotions or “multi-channel”. The finance industry is a major driver with the large four Australian banks providing a range of cutting-edge tools for accessing accounts, and paying bills and making mobile transactions. B2B sales are somewhat more fragmented with less reliance on eCommerce platforms for trading.
Only 21% of Australians purchased products in 2018 from international sellers. Australia Post reports that 40 percent of Australian shoppers most recent purchases were from China. The United States has declined in share over the past two years and now amounts for 21 percent of overseas purchases, followed by United Kingdom (14 percent), Hong Kong (6 percent), and New Zealand (3 percent. These purchases are generally made due to increased product offerings from overseas suppliers and cheaper prices. A Goods and Services Tax (GST) is charged at a rate of 10 percent of the landed value of these goods originating from overseas.
According to Australia Post research, 48.8 percent of all online payments are made via PayPal. Credit and debit cards account 39.9 percent of online payments. The fastest growing segment is the buy now pay later market which accounts for 6.7 percent of online transactions. The most well known provider in this segment is AfterPay.
Mobile eCommerce represents a significant opportunity in the local market. With mobile penetration at close to 100%, mobile payments and purchasing is a major strategy for all etailers. According to a recent report by PayPal, 26.4 percent of all ecommerce transactions occur via mobile phone, representing a 28.8 percent year-on-year increase, and dwarfing transactions made over laptop and desktop, which have been shrinking over the last couple of years.
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