It seems online shopping among Australians is on the up. No surprise there then. What may be more surprising is much of that shopping is being done at Australian retailers – not overseas, as the hand-wringers would have you believe.
According to National Australia Bank’s online retail sales index, total online retail spending for the 12 months to November was $14.6 billion, up 10% year-on-year.
While the figures for the year to December are yet to be released, chief economist Alan Oster said they were likely to be between $14.5 and $15 billion.
And how much of that online retail spending went to Australian retailers? Oster says about 70%. Much more than would be expected considering the repeated complaints from local retailers about competition from overseas.
Oster also said online sales were likely to grow more quickly over the next few years as the Australian online retail industry grows and matures.
“In the last few years, it has grown at around 20%,” he said. “That’s slowed a lot in the past 12 months, but I think its starting to go back up again.”
With online sales accounting for 6.4% of Australia’s total retail spending, Oster believes Australia’s online retail industry is yet to mature to its full capacity. When compared to the US and UK, where the online retail industry has a 9% or 10% share, Australia still has some way to go.
Domestic online purchases surprisingly high
Part of the World Internet Project (WIP), a study of online retail in Australia from 2007-13 shows not just the growth of the industry, but the large share of online purchases being made at Australian retailers.
Swinburne University of Technology’s Dr Scott Ewing, one of the report’s authors said, “The good news for Australian businesses is that local retailers are maintaining their share of this growth, as Australian consumers maintain their strong preference for shopping with domestically-based websites.”
The study showed a pattern of large increases in the number of online purchases made by Aussie consumers, with an average annual spend of $2616. Around half of Australian consumers who shop online mostly use local websites, and 79% prefer to shop locally rather than overseas.
“We ask about preferences, whether Australians would prefer to shop with Australian websites, and overwhelmingly the answer to that is yes they would,” Ewing said.
“When we ask them about what they actually do, around 50% told us that all of their shopping online or most of their shopping online was conducted with Australian websites.”
What are Aussies buying online?
The study shows that online shopping is becoming an increasing part of Australians’ everyday lives.
“Australians are more likely to shop weekly or more often than other jurisdictions, so in 2013 it was something like three in ten Australians shopped online at least weekly,” Ewing said.
“That compared to two in ten roughly in New Zealand, and it was just 10% in Switzerland.”
The survey also showed that men spend more online than women, with men spending an average of $229 online each month, compared to $204 for women.
But what are they buying? Research showed that people booking travel online grew from 49% in 2007 to 73% in 2013, people buying event tickets increased from 36% to 65%, and people paying bills online grew from 43% to 72%. Overall, the actual number of internet purchases grew 46.2%.
And what are they not buying? One online activity which remains sluggish is the buying and selling of stocks and shares, with only 8% doing this regularly. The survey also showed that 61% of participants were opposed to online newspapers.
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