eCommerce in Australia: Growth Overview for 2024
eCommerce in Australia experienced significant growth in 2023 and is projected to generate $35.92 billion in revenue in 2024. This upward trend is anticipated to persist over the next five years, with Australian eCommerce expected to grow at a compound annual growth rate (CAGR) of 8.33%, reaching a market volume of $49.47 billion by 2028.
As of 2023, over 5.6 million Australian households engaged in online shopping each month. This increase in online shopping presents substantial growth opportunities for new and emerging retail businesses.
The influence of eCommerce on traditional retail has been considerable and will likely continue to transform the retail landscape. More than 9.4 million Australian households purchased physical goods online, prompting businesses to understand how and where consumers prefer to shop.
This surge in domestic eCommerce highlights greater opportunities for both new and established brands. Below are key eCommerce statistics that can help brands and advertisers capitalize on emerging trends in Australia:
Key eCommerce Statistics for Australia in 2024
- 75% of Australian consumers seek sustainable shopping options, with 56% willing to accept slower delivery for eco-friendly choices.
- 53% of online shoppers desire a more personalized shopping experience.
- In 2022, 28% of Australians bought products from international sellers, while only 6% of international buyers purchased goods from Australian sellers online.
- 31% of online shoppers plan to buy Australian-made products.
- User penetration is projected to reach 78.5% in 2024, increasing to 98% by 2028.
- eCommerce revenues are expected to grow by 8.33% from 2024 to 2028, expanding the market to $49.47 billion.
- In 2023, the fastest-growing online holiday shopping segments included women’s fashion (37.3% YoY), online discount stores (12.2% YoY), and athleisure (9.2% YoY).
- 30.3% of consumers have made purchases online through social media platforms.
- 25% of household appliance sales occur online, according to recent statistics.
Growth Trajectory of eCommerce in Australia
Projected revenue in the eCommerce market is set to reach $35.92 billion in 2024. Here’s a snapshot of additional statistics showcasing the growth of online shopping in Australia:
- The largest eCommerce segment is fashion, with revenue expected to grow to $8.96 billion in 2024, reflecting a CAGR of 8.8%.
- User penetration is expected to hit 78% of the Australian population in 2024, rising to 98% by 2028.
- The average revenue per user (ARPU) is forecasted to be $1,749 this year.
- Revenue is projected to grow annually at an 8.33% CAGR, reaching $49.47 billion by 2028.
Trends Influencing Australia’s eCommerce Sector
- Emerging Markets and Sectors
Over 82% of Australian households made at least one online purchase in 2022-23, with 60% making more than 12 purchases per year. Online spending in goods reached $63.8 billion, constituting 18% of total retail sales, with an annual growth rate of 1.7%. New sectors, particularly online food delivery, have significantly driven eCommerce growth, with 2.7 million households spending $8.6 billion on food and beverages online. - Stable Digital Marketing Investment
Australian businesses allocated $14.2 billion to digital marketing in 2023, reflecting a 1.8% year-over-year growth. Although this growth rate has declined compared to the pandemic peak, all sectors showed positive performance. - The Buy Now, Pay Later (BNPL) Trend
BNPL options allow customers to shop online and pay in installments, gaining popularity in Australia. In 2023, over 35% of card transactions were made through mobile wallets, significantly increasing from 2020. - Competition from Physical Retail
While convenience and accessibility drive eCommerce growth, many Australians still enjoy shopping in physical stores. Advertisers must develop innovative marketing campaigns to compete effectively with traditional retailers. - Sustainable Shopping Practices
There is a growing trend toward sustainable and ethical shopping among Australian consumers. Many are willing to choose environmentally friendly options, such as recyclable or reusable packaging. - Click and Collect Services
Click and collect has gained traction across various industries, providing an alternative to express shipping and catering to consumers who want quick access to their purchases. - Social Shopping Growth
In 2023, Australians spent an average of two hours daily on social media. As a result, many retailers are focusing on enhancing their digital presence, with 62% of internet users aged 16-64 researching brands through social media.
Implications for Retailers and Advertisers
Both large and small businesses are adapting to the shift toward online shopping. Improved internet connectivity and heightened consumer trust in eCommerce have created an environment conducive to growth. Despite some declines in overall online sales in mid-2023, participation in eCommerce continues to rise, particularly among regional households.
Cost-saving measures, such as free delivery and returns, remain essential for attracting consumers. Additionally, younger shoppers are increasingly planning purchases around sales events.
Profitability and Market Entry Challenges
While eCommerce has expanded significantly, profitability for retailers has diminished. Retailers must invest in digital infrastructure to compete, which can keep profit margins low. However, advances in technology have lowered entry barriers for new businesses, with the number of online retailers in Australia expected to surpass 87,000 by 2024.
Future Outlook for eCommerce Growth
Despite challenges posed by inflation and post-COVID market adjustments, the Australian eCommerce sector is expected to maintain positive growth in the coming years. Factors such as increased internet penetration and enhanced transaction security will further drive consumer engagement.
Conclusion
The ongoing rise of eCommerce presents ample opportunities for retailers who quickly adapt to changing consumer habits. As we approach 2024 and beyond, it is crucial for advertisers and businesses to monitor online shopping trends to harness insights for expanding market share and revenue growth.